WEST PALM BEACH, Fla - June 1, 1998--Servico, Inc. (NYSE:SER) a nationwide owner and operator of hotels, today said that it has completed its previously announced acquisition of 14 hotels from Prime Motor Inns Limited Partnership. All 14 hotels are full service properties which are currently franchised as Holiday Inns. Servico intends to sell four of the hotels, retain ten hotels containing 1,772 rooms and anticipates investing $26 million in refurbishments at the ten hotels retained. Taking into account assumed proceeds from the sale of the four hotels, it is anticipated that the 1,772 rooms retained will have a cost of approximately $49,000 per room, including the cost of refurbishment. It is also anticipated that this transaction will be accretive to Servico on an earnings per share basis in the first twelve months of ownership. The ten hotels which are being retained are all franchised as Holiday Inns and are located in Connecticut, Maryland and Pennsylvania as follows:
 
 

As a result of this purchase, Servico owns or manages eighty-nine hotels with more than 17,900 rooms located in 24 states and Canada. The hotels are primarily full service, providing food and beverage service as well as lodging and meeting facilities. Substantially all of Servico's hotels are affiliated with nationally recognized hospitality franchises, including Holiday Inn, Crowne Plaza, Hilton, Omni, Radisson, Sheraton and Westin. With assets in excess of $750 million, Servico is one of the largest hotel owner/operators in the United States.

Statements in this release may be construed to be forward looking and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward looking statements involve risks and uncertainties, including without limitation, risks relating to the renovation, operation and acquisition of hotels, the successful disposition of certain hotels, the availability of capital to finance growth, the historical cyclicality of the lodging industry, as well as the other matters disclosed in the documents filed by the Company with the Securities Exchange Commission.