Prime currently has 46 HomeGate Studios Suites hotels in operation or under construction. These mid-priced extended-stay hotels feature a combination of studios for value-conscious travelers, and more spacious suites which command higher room rates. By contrast, HomeGate Suites will solely feature spacious suites, including both one- and two-bedroom accommodations.

The introduction of HomeGate Suites allows Prime to take advantage of strong demand and limited competition in the $60-80 daily price range in the extended-stay market. "The HomeGate Suites concept is positioned perfectly between Residence Inns, the upscale market leader, and various new lower to mid-market upstart chains," said David Simon, chairman and CEO of Prime. "We are moving the HomeGate brand into an attractive market segment at a time when our key competitors are positioned significantly above or below us."

The majority of guest suites in the new HomeGate Suites hotels total 450 square feet, and offer a fully-equipped kitchen, an over-sized desk and a living room area with sleeper sofa and recliner chair. The balance of accommodations will be one-bedroom suites totaling 575 square feet, and two- bedroom/two bathroom suites totaling 900 square feet. 

All HomeGate Suites will also feature large, welcoming lobbies, boardroom style meeting rooms, exercise facilities, indoor or outdoor heated pool and a guest pantry. In addition, weekly housekeeping and twice weekly linen service is provided. The first HomeGate Suites is scheduled to open in April, 1999 in Columbia, South Carolina. Simon said that the new HomeGate Suites will effectively complement the existing HomeGate Studios Suites chain. "HomeGate Suites will be priced on average $10-15 above comparable HomeGate Studios Suites," said Simon. "However, most of our new suites will be identical in size, amenities and pricing to the larger suites in our existing hotels. The only difference to our guests will be the absence of the studio room."

Divestiture of Non-Prototypes:

In an effort to ensure product consistency and guest satisfaction, Prime simultaneously announced plans to re-brand and sell seven non-prototype HomeGate Studios  Suites which it acquired in its 1997 merger with HomeGate Hospitality, Inc.  All located in Texas, the hotels consist of 908 rooms, and most feature exterior corridors.

"With the divestiture of non-prototype hotels, our HomeGate guests will be assured of the highest level of product consistency," said Simon. "Our objective is for each of Prime's brands to offer a highly dependable guest experience consistent with pricing levels."

Prime is rapidly growing the HomeGate extended-stay line of hotels. During the next twelve months, the company plans to invest an additional $250 million in capital towards HomeGate development. By year-end 1999, Prime plans to have 40 HomeGate Studios Suites and at least 20 HomeGate Suites in operation. In August, the company plans to begin franchising HomeGate, together with its AmeriSuites and Wellesley Inn brands. Prime Hospitality Corp. currently owns, manages and/or franchises 160 hotels throughout the United States and the U.S. Virgin Islands under its proprietary trade names AmeriSuites(R), Wellesley Inns(R) and HomeGate(R), and under franchise agreements with national hotel chains.