NEW YORK, June 12, 2012 -- Morgans Hotel Group Co. (NASDAQ: MHGC), the New York-based hospitality management company with boutique hotel properties in Boston, New York, Miami, Los Angeles, San Francisco and London, today announced that it has entered into a 20-year management agreement for a 200-room boutique property in London to be branded with its acclaimed lifestyle hotel brand, Hudson. Hudson London, scheduled to open in early 2015, marks the beginning of an international growth plan to introduce the brand into gateway markets around the globe. The announcement of the second Hudson-branded property from Morgans Hotel Group coincides with the re-launch and renovation of the original Hudson location in New York City.

Capturing the spirit of Hudson, plans for the London property reflect a social and cultural phenomenon where the emphasis is placed on unique personal experience, emotion and individuality, appealing to a certain sensibility rather than a particular age or social class. Following the uncompromised style and innovation of Morgans Hotel Group's current London properties, Sanderson and St Martins Lane, Hudson London embodies the next generation – stylish, democratic and young at heart. Bringing a distinctive new offering to London, Hudson will combine cutting edge style with impeccable service at accessible prices.

"We are delighted to announce the development of our first international Hudson-branded hotel," said Michael Gross, Chief Executive Officer of Morgans Hotel Group. "Hudson is our gateway brand, offering guests a unique and social experience, in a creative, unexpected environment. We are looking forward to bringing the spirit of our celebrated New York property to a global stage, and elevating Hudson into a truly international brand."

Prior to the opening of the London property, Morgans Hotel Group has invested in a $30 million modernization of the original Hudson property in New York, which initially broke boundaries with its refreshing new take on style without pretension. The updates, which are ongoing, began with a complete 834-room renovation, including new furnishings as well as upgraded technology and state-of-the-art lighting. Hotel corridors are also receiving playful updates to surprise and delight new and returning guests with unexpected touches.

In a collaboration between the Morgans Hotel Group design team and acclaimed design group, Rottet Studio, the public spaces of Hudson New York will also be transformed, beginning with a new European-style restaurant concept with a bohemian influence and transitional indoor/outdoor space.

The iconic Hudson Bar will also be reinvigorated with a nod to 1940's French decor infused with a rock and roll edge, while celebrated original design elements including the Clemente ceiling fresco will be restored. Both Private Park and Library Bar will also see enhancements to create even more comfortable and inviting spaces for guests.

Located in midtown, Hudson New York, the ultimate lifestyle hotel for the 21st Century, is a brilliant reflection of the boldness and diversity of the city. Hudson New York's updates are slated to be completed Fall 2012, and Hudson London is scheduled to open its doors early 2015.

ABOUT HUDSON NEW YORK
Hudson, in New York City, delivers a potent combination of urban adventure, daredevil design, and true affordability to arguably the most jaded city in the world, giving Manhattan something even it has never seen before. In a city renowned for its boldness, diversity and eclecticism, Hudson is an inspired piece of organized chaos – a reflection and distillation of New York itself, a melting pot of styles and ideas – shimmering with a hot-rod vivacity and in-your-face style that is hard to ignore and even harder to forget.

ABOUT MORGANS HOTEL GROUP
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion, including a Delano and a Mondrian in Turkey, a Mondrian in Doha, Qatar, a Mondrian in Nassau, The Bahamas and a Mondrian in London. Morgans also owns a 90% controlling interest in The Light Group, a leading lifestyle food and beverage company. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs and prediction of certain future other events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" "believe," "project," or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results or other future events to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in Morgans' Annual Report on Form 10-K for the fiscal year ended December 31, 2011, and other documents filed by Morgans with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and Morgans assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.