Hotel Online  Special Report


Morgans Hotel Group Provides Update on Growth
Plans with its Brands Delano and Mondrian
Pending Acquisitions and Developments Expected
to Nearly Double Company's Hotel Room Count 

NEW YORK - Feb. 17, 2006 -- Morgans Hotel Group Co. (NASDAQ: MHGC), a fully integrated hospitality company that operates boutique hotels in gateway cities under well-known brands such as Delano and Mondrian, announced that it is moving forward on several growth initiatives that will increase its number of properties by one-third and is expected to nearly double the number of hotel rooms under management.

The initiatives include the development of two hotels in Las Vegas, the expansion of the Company's popular Delano in South Miami Beach and the planned acquisition of a boutique hotel in Scottsdale, Arizona.

Delano Hotel
1685 Collins Avenue
Miami Beach, Florida

James Hotel Scottsdale (to be renamed Mondrian Scottsdale)
7353 East Indian School Road
Scottsdale, Arizona

W. Edward Scheetz, President & Chief Executive Officer of Morgans Hotel Group, said, "This is an exciting time for our Company. Our successful public offering has provided us with the financial flexibility to take advantage of growth opportunities to expand into other major markets where our customers travel. We will continue to seek additional opportunities to expand our brands into other major business and leisure travel markets and to continue to offer customers a unique, glamorous experience."

In Las Vegas, Morgans Hotel Group has entered into a 50/50 joint venture with Boyd Gaming Corporation (NYSE: BYD) to develop two signature hotels bearing the Company's Delano and Mondrian brands. According to the terms of the joint venture, Boyd Gaming will contribute approximately 6.5 acres within its Echelon Place development, and Morgans Hotel Group will contribute approximately $97.5 million in cash. The project is expected to be completed in 2010 and the Company expects its contribution to be made by the end of 2007. The Morgans Hotel Group will manage both hotels.

Delano Las Vegas is expected to include 600 guest rooms, suites and bungalows, a destination night club, a lobby bar and Asia de Cuba restaurant. It will also feature a spa and fitness center, private pool and recreation area. The planned hotel's prototype, Delano in South Miami Beach, has been an international destination for glamour, entertainment and sophisticated nightlife for over a decade, serving as one of the principal catalysts in the revival of the famed South Beach area.

Mondrian Las Vegas will be the twin to the highly successful Mondrian in West Hollywood. Accommodating leisure and business guests, the 1,000-room property will include a distinctive bar and restaurant, meeting and conference space, private pool and recreation area with Skybar.

In South Miami Beach, the Company recently completed its $14.3 million acquisition of a property located at 1690 Collins Avenue, across from Delano. The site will be redeveloped as an expansion of Delano - providing an additional 70 guest rooms, restaurant, bar and other amenities. Opened in 1995, Delano instantly created a new industry standard for the next generation of Urban Resort. Conceived as a new kind of world-class, self-contained destination, Delano offers a cool haven of relaxation and rest in a throbbing international gateway city teeming with 24-hour nightlife, energy and exuberance.

In Scottsdale, Morgans Hotel Group has agreed to acquire the 194-room James Hotel Scottsdale, which it will renovate and re-brand as Mondrian Scottsdale. The $47.5-million acquisition is expected to close in April 2006. The hotel will remain open during renovations, which are expected to be completed by the end of the year.

Marc Gordon, the Company's Chief Investment Officer and Executive Vice President of Capital Markets, commented, "Just as our current destination properties provide a distinctive combined lodging, dining and nightlife experience, we expect our newest properties to offer exciting and superior alternatives to the existing hotels in the markets we enter. We established the boutique sector of the hotel industry and we continue to define it."

About Morgans Hotel Group
Based in New York City, Morgans Hotel Group Co. (Nasdaq: MHGC - News) owns and operates Hudson, Morgans and Royalton in New York, Delano in Miami, Mondrian in Los Angeles, Clift in San Francisco, and Sanderson and St Martins Lane in London, and operates The Shore Club in Miami. From its founding in 1984, Morgans Hotel Group has defined the boutique hotel sector and continues to be an innovator and leader in the sector.


Morgans Hotel Group Co.

Also See: Boyd Gaming Corp. Plans to Tear Down the Stardust Hotel and Casino to Make Way for a $4 billion Mega Complex; Will Include Four Hotels with 5,300 rooms, Convention Space Will Exceed One million Square Feet / January 2006
Morgans Hotel Group Exploring Sale of St. Martins Lane and Sanderson Hotel in London / August 2004


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