The combined purchase price of approximately $21.8 million was funded through borrowings from General Electric Capital Corporation and existing credit lines.  

�All of the properties we purchased were attractively priced and in line with our investment criteria,� said Paul J. Shulte, Supertel�s chairman, president and chief executive officer.  �These acquisitions increase our presence in Kentucky to 10 hotels, and we expect to achieve some economies of scale there.  The South Dakota hotels are two Sioux Falls Days Inns with great locations, and the Green Bay, Wis. Super 8 recently was named one of the top eight hotels in the 2,000-plus Super 8 system.  We look forward to adding these properties and their staffs to our portfolio.  

�In the past year our primary management company, Royco Hotels, has spent a significant amount of effort in building an appropriate infrastructure to maximize returns on our existing portfolio and to better absorb our acquisitions,� he noted.  �They have added key senior level staff, put new operating and training systems in place and are expected to be fully up to speed with these changes by the end of this quarter.�  

The franchise brands, location and size of the 10 hotels are:
 

Hotel Location	Rooms
Comfort Inn Brooks, Ky.	66
Comfort Inn Glasgow, Ky.	61
Comfort Suites Louisville, Ky.	69
Days Inn Ashland, Ky.	63
Days Inn Glasgow, Ky.	59
Quality Inn Cave City, Ky.	105
Sleep Inn Louisville, Ky.	63
Days Inn Sioux Falls, South Dakota	80
Days Inn Sioux Falls, South Dakota	85
Super 8 Green Bay, Wisconsin	83
total rooms	734

 
�All 10 hotels are in good physical condition and are in solid locations, with good visibility.  The hotels will undergo normal franchisor required product improvement plans, but implementation should result in little to no disruptions to our guests.�  
.

Quality Inn 102 Gardner Ln. Cave City, Kentucky

Days Inn Sioux Falls 3401 Gateway Blvd Sioux Falls, South Dakota

�We continue to see a substantial amount of individual hotels and portfolios for sale in our core segments that meet our acquisition criteria,� he pointed out.  �We seek properties with demonstrable cash flow streams that justify the acquisition price and can benefit from improved operating efficiencies.  We have not seen any significant impact on sales prices from the recent credit market issues, but are watching the market closely.  We are flexible and in a position to respond to opportunities.  However, we also want to grow at a measured pace that allows us to more readily absorb new acquisitions into our portfolio.� 

About Supertel Hospitality, Inc.

As of today, Supertel Hospitality, Inc. (NASDAQ: SPPR) owns 125 hotels with 10,888 rooms located in 24 states.  The company�s hotel portfolio includes Super 8, Comfort Inn/Comfort Suites, Hampton Inn, Holiday Inn Express, Supertel Inn, Days Inn, Ramada Limited, Guest House Inn, Sleep Inn, Masters Inn and Savannah Suites.  This diversity enables the company to participate in the best practices of each of these respected hospitality partners.  The company�s portfolio concentrates on mid-market and economy limited-service hotels and economy extended-stay hotels, which typically do not offer food and beverage service.  For additional information about the company or to make a hotel reservation, please visit the company�s Web site, www.supertelinc.com.

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the company�s filings with the Securities and Exchange Commission.

Donavon A. Heimes
Supertel Hospitality
Chief financial officer
402.371.2520
[email protected]