In 1999 Hudson began to place more focus on its third party management initiative and building its management and information systems infrastructure to provide high quality service and financial information to middle market hotel owners. �It is our expertise in the middle market that gives us our competitive advantage,� commented Michael T. George, the Company�s President and Chief Operating Officer. �With the addition of these two (2) properties the Company will be managing forty-nine (49) properties with more than 5,300 rooms. Many of these are middle market rooms thus showing our strength in this segment,�

Mr. George continued. Hudson�s portfolio of managed hotels also includes full service, resort and independent boutique-style properties.  �The Best Western and Clarion was developed and owned by the Legacy Development Group (�Legacy�), based in Irving, TX. The Clarion opened in February, 1999 and the Best Western in June, 1999. We anticipate a long-term relationship with Legacy,� commented Mr. George, �and intend to joint venture new developments with them in the future.�

Founded in 1984, Hudson began as a locally based hotel Management Company with two properties, the Comfort Inn and Quality Inn, Rochester, NY. In 1985, Hudson purchased an equity position to secure management contracts in three hotels, the Econo Lodge, Rochester, NY, Econo Lodge, Canandaigua, NY, and Holiday Inn, Geneseo, NY. With its investment, Hudson grew into a regional hotel management  company with a portfolio of five properties.  From 1985 to 1997, Hudson built several "new-construction" Comfort Inn hotels primarily in the northeast, and provided professional hotel management services for several hotel limited-partnership investor groups.
 

In 1987, the Company launched Microtel Franchise and Development Corporation ("MFDC") through an initial public offering. Originally, MFDC was formed to develop and franchise a national chain of economy limited service lodging facilities using the service mark "MICROTEL". This revolutionary hotel franchise concept proved to be extremely successful and is presently the fastest growing limited service hotel chain today. From 1987 to 1995 the company grew the Microtel brand and provided development, construction, operations, marketing, and accounting services for its own operations, and for third-party hotel investment groups.

In 1992, MFDC completed the acquisition of Hudson Hotels Corporation in exchange for shares of Microtel common stock. At this point, Hudson became a wholly owned subsidiary of MFDC. In 1995, the Company entered into an agreement with US Franchise Systems, Inc. (NASDAQ: "USFS") pursuant to which USFS purchased worldwide franchising and administration for the Microtel hotel chain. Following this transaction, the Company ceased its franchising activities. As a result of the sale of its franchising system, the Company then focused its efforts on developing, building and managing various hotel products, including Microtel Inns. Assisting Hudson's future growth is the rapidly expanding Microtel Inn franchise system from which we receive a continuous royalty stream, pursuant to our sale agreement with USFS.

The aggressive expansion program that ensued in 1996 included the acquisition of existing hotel properties, the development of new Microtel Inn hotels, and the servicing of management contracts for individual hotel owners, institutions and corporations. In 1996, Hudson purchased 12 hotels, including 8 Fairfield Inns by Marriott.  Continuing this growth strategy, Hudson acquired 9 Hampton Inn hotels in 1997, and in 1998, Hudson added a Hampton Inn, Comfort Suites, and Holiday Inn to its portfolio. 

Presently, Hudson Hotels Corporation manages 49 hotels totaling 5,359 rooms. Of the forty-nine (49) hotel properties under management, twenty-five (25) are owned directly by the company. The remaining properties are combinations of minority-interest limited partnerships,
and third party managed hotels. Franchised hotel properties include Fairfield Inn, Hampton Inn, Quality Inn, Comfort Inn, Comfort Suites, Clarion Suites, Best Western Suites,Sleep Inn, Microtel Inn, Hawthorn Suites, Red Roof Inn, Econo Lodge, Holiday Inn, and Holiday Inn
Express.  Independent resort hotels include the Inn on the Lake, Canandaigua, NY, and Seagate Hotel & Beach Club, Delray Beach, Florida.  In addition, Hudson manages several independent properties, many of which are named Brookwood Inn. 

Except for the historical information presented in this press release, the press release includes forward looking statements that involve risks and uncertainties including, but not limited to, quarterly fluctuations and results, the management of growth, competition and other risks detailed in the company�s Securities and Exchange Commission filing. Actual results may differ materially from such information as set forth herein.