During the first quarter, occupancy rates increased to 65.3% from 63.0% in the prior year and average daily rates increased to $64.91 from $64.49.  This resulted in an increase in revenue per available room (�RevPAR�) of 4.4%.

Revenues for the three months ended March 31, 2000 were $50.0 million compared to $50.3 million in 1999.  The slight decrease is primarily due to the decrease in the number of rooms from 12,125 at March 31, 1999 to 11,365 at March 31, 2000 as a result of the Company�s program to sell mature properties to reduce debt and reallocate capital to newly developed, extended-stay hotels.  Offsetting this decrease is an increase in extended-stay revenue to $7.8 million for the three months ended March 31, 2000 from $4.5 million for the same period in the prior year.  At March 31, 2000, extended-stay revenue represented approximately 15.7% of total revenue compared to 8.9% in the prior year.  

�I am pleased with our financial performance during the quarter, especially considering the impact the Y2K fears had on the first two weeks in January,� commented Don Landry, Vice Chairman and CEO of Sunburst.   �In addition, we are particularly excited about the strong performance of our extended-stay hotels whose gross operating profit increased to $3.9 million from $2.1 million in the prior year.  We opened in Secaucus, New Jersey our 21st extended-stay hotel during March and are particularly pleased with that hotel�s strong results in less than its first full month of operations,� Landry added.

During the first quarter of 2000, the Company continued with its plan to dispose of assets that do not meet the Company�s criteria for long-term retention and sold one hotel resulting in proceeds of $2.1 million.  During the last twelve months, the Company has sold 11 hotels for approximately $37.0 million and currently has an additional seven being marketed for sale.  At March 31, 2000, the Company had 21 extended-stay hotels open and operating.

Don Landry, the Company�s CEO, further commented, �We are very excited about our 21 extended-stay hotels and we continue to receive high marks from guests for customer satisfaction.  We are also pleased with the progress we have made in selling certain properties which allows us to focus on the reduction of debt to fuel the development of our extended-stay product.�

Sunburst Hospitality Corporation owns and operates 11,365 hotel rooms in 83 hotels in 27 States, compared to 12,125 rooms in 88 hotels a year ago. 

The references to future development, asset sales and debt reduction are forward - looking statements.