Marriott Hotel Services manages the Marriott Rancho Las Palmas Resort, based in Rancho Mirage, Calif. The real estate investment trust said it will end the contract with Marriott by Dec. 29, which will give it more options for the resort, including a potential sale.

Strategic Hotels will pay Marriott Hotel Services an initial $5 million termination fee, and possibly an additional $5 million fee in 2009. The company would be exempt from the additional fee if it agrees to a hotel management contract with Marriott Hotel Services by year-end 2008.

The company also will reimburse Marriott Hotel Services for severance costs at the resort. Strategic Hotels said it expects to record a one-time charge in the first quarter, which was not included in its earlier guidance.

In February, the company said it expected to report funds from operations of 32 cents to 36 cents per share for the quarter. Analysts expect FFO of 35 cents per share, according to a Thomson Financial poll.

Shares of Strategic Hotels rose 35 cents to $22.85 in afternoon trading on the New York Stock Exchange.

About the Company
Strategic Hotels & Resorts, Inc. is a real estate investment trust (REIT), which owns and asset manages high-end hotels and resorts. The company has ownership interests in 18 properties with an aggregate of 8,480 rooms. For further information, please visit the company's website at http://www.strategichotels.com/ .

This press release contains forward-looking statements about Strategic Hotels & Resorts, Inc. (the "Company"). 

Strategic Hotels & Resorts, Inc.
http://www.strategichotels.com/