NEW YORK, Aug. 4 - Lodging industry mergers and acquisitions (MA) in the first half of 1997 soared to $4.1 billion, according to Coopers Lybrand L.L.P.'s Lodging Research Network (www.lodgingresearch.com). That's more than double the first half of 1996, when hotel industry MA activity totaled $1.7 billion, the Lodging Research Network says. But for 1996 overall, hotel industry MA activity amounted to $8.8 billion, a record -- and well above 1995's $3 billion, the Lodging Research Network found.

"This has been the year of the deal in the U.S. hotel industry," according to Bjorn Hanson, Ph.D., New York-based chairman of the Coopers Lybrand lodging and gaming practice, creators of the Lodging Research Network (www.lodgingresearch.com), the comprehensive, Internet-based resource for lodging industry data and information. "The key factors driving the MA activity are record industry profits, near-1996-record levels of equity capital raised and the attention of Wall Street and its merger and acquisition expertise," he noted.

In the first half of 1997, there were a total of six MA transactions in the hotel industry, compared with nine deals in the year-earlier period, according to the Lodging Research Network. For all of 1996, there were 20 hotel industry MA transactions, according to www.lodgingresearch.com. "Many of the transactions we've seen so far have been 'big companies getting bigger,'" Hanson notes. "But there is a second type of deal we expect to see: smaller companies combining to remain competitive, benefit from economies of scale and unite complementary resources," he adds. "For some of these small companies, the coming mergers will be survival mergers."

• The largest of the hotel industry's six MA deals in the first half of 1997 came in April, when Parsippany, New Jersey-based HFS Inc. (NYSE: HFS) acquired vehicle leasing, mortgage and corporate relocation services provider PHH Corp. of Hunt Valley, Maryland for $1.8 billion, according to www.lodgingresearch.com. Today with market capitalization of approximately $9.5 billion, HFS is the largest lodging C-corporation, as opposed to a lodging real estate investment trust, or REIT.
• The second-largest transaction that took place during the first half of the year came in February when Marriott International (NYSE: MAR) acquired Renaissance Hotel's portfolio of 150 hotels as well as the Renaissance, New World and Ramada International hotel brands for $1 billion, according to the Lodging Research Network.
• The third-largest transaction during the first half of this year was Host Marriott's (NYSE: HMT) June purchase of the Forum Group's portfolio of 29 retirement communities from Marriott Senior Living Services Inc., a unit of Marriott International, for $540 million, the Lodging Research Network reports.
• The fourth-largest hotel industry MA deal was in January when Extended Stay America (NYSE: ESA) acquired Studio Plus hotels for $290 million, according to the Lodging Research Network.
• The fifth-largest MA transaction, and the only one in the first half of 1997 to involve a lodging REIT, was Starwood Lodging Corp.'s (NYSE: HOT) February acquisition of HEI Hotels LLC for $327 million.
• The sixth-largest MA transaction, and the only one in the first half to involve a time-share entity, was Signature Resorts' (Nasdaq: SIGR) purchase of timeshare developer Plantation Resorts Group for $59.1 million.

Coopers Lybrand's Lodging Research Network (www.lodgingresearch.com) makes available via the Internet Coopers Lybrand's renowned econometric forecasts for the lodging industry, breaking lodging industry news, an exclusive database of lodging industry real estate acquisitions, financial data of publicly traded lodging companies (including SEC filings), new hotel construction data, lodging census data from Smith Travel Research as well as an extensive research library that includes U.S. economic and demographic statistics. For more information about the Lodging Research Network, call toll-free 1-888-576-6656. One of the world's leading professional services firms, Coopers Lybrand L.L.P. provides services for enterprises in a wide range of industries. The firm offers its clients the expertise of more than 16,000 professionals and staff in offices located in 100 U.S. cities and, through the global network of Coopers Lybrand International, more than 74,000 people in 142 countries worldwide. SOURCE Coopers Lybrand L.L.P.

CONTACT: Adam Brecht of Coopers Lybrand, 212-259-5996 or [email protected]