ROCHESTER, N.Y.--May 22, 1998--Hudson Hotels Corporation (NASDAQ: HUDS) (the "Company") announced today that Hudson Hotels Trust ("the Trust") and the Company have agreed to form a Strategic Alliance to lease and manage hotels owned by the Trust.

The Trust is a newly formed Maryland real estate investment trust ("REIT") which filed a registration statement with the Securities and Exchange Commission for the sale of 12,800,000 common shares in an initial public offering with Morgan Keagan & Company, Inc. as lead underwriter.

With the proceeds of the offering, the Trust plans to acquire 29 hotels including 26 Fairfield(R) Inns by Marriott(R), one Comfort(R) Suites, one Hampton(R) Inn and one Holiday(R) Inn. The hotels that the Trust intends to acquire will be leased to a subsidiary of the Company under percentage leases.

Adding the 29 hotels to be acquired by the Trust to the 40 hotels already managed by the Company will mean that the Company will be managing a total of 69 hotels with over 8,000 rooms, an 80% increase in the number of rooms managed by the Company. Additionally, the Company and the Trust have agreed that, pursuant to the Strategic Alliance, the Company will have the right of first offer to lease and manage any additional hotels that the Trust acquires. The Trust will also be granted an option to purchase any hotels developed or identified for acquisition by the Company.

E. Anthony Wilson, the Company's Chairman and CEO, said that, "This Strategic Alliance will substantially increase the size of the Company. Additionally, the relationship with Hudson Hotels Trust should provide for future growth opportunities for the Company."

A registration statement relating to the securities to be offered by the trust has been filed with the Securities and Exchange Commission but has not yet become effective. Those securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

There can be no assurance that the Trust will complete the acquisition of the 29 hotels or that the Company will add those hotels to its management portfolio.

Hudson Hotels Corporation is a Rochester, NY based leading limited-service hotel development and management company. The Company manages primarily well-known national hotel brands pursuant to franchise agreements from Marriott International, Inc. (NYSE:MAR), Promus Hotels Corporation (NYSE:PRH), Choice Hotels International, Inc. (NYSE:CHH), Red Roof Inns, Inc. (NYSE:RRI), and U.S. Franchise Systems, Inc. (NASDAQ:USFS). The Company's common stock is traded on the NASDAQ Stock Market under the symbol HUDS.