NEW YORK - May 27, 1998-- Prime Hospitality Corp. will begin the roll out of franchise programs for its three hotel 'brands': AmeriSuites, HomeGate Studios and Suites, and Wellesley Inns, it was announced by David A. Simon, chairman and chief executive officer.

Prime's flagship brand, AmeriSuites, an all-suite upscale product, currently has 72 units operating and 44 under development.

``We expect to have 200 AmeriSuite units operating by the end of the year 2000, exceeding analysts expectations,'' Simon added.

In addition, Prime's HomeGate Studios and Suites brand designed for the extended stay traveler, has 21 units operating and 41 under development, and its Wellesley Inns, mid-priced limited service hotel brand, are expected to begin franchising by August, 1998.

``All of the Prime brands have already demonstrated they can deliver above-market returns on a sustained basis. This makes us very optimistic about the success of our long range strategy to be a premier high quality hotel brand and franchise company,'' Simon stressed.

Prime, based in Fairfield, N.J., currently has 155 hotels containing 21,497 rooms in 29 states and the U.S. Virgin Islands, in its portfolio of owned and managed properties. ``This is an increase of 28 percent in the size of Prime's hotel holdings, in six months,'' Simon noted.

Simon and Terry O'Leary, Prime's senior vice president of Franchise Sales and Development, addressed a news conference during the 20th Annual International Hospitality Industry Investment Conference, where these comments were made.

AmeriSuites Brand is a Hit with Analysts

Prime's AmeriSuites have been designated as the ``category killer brand'' by lodging industry's analysts. ``In our view, AmeriSuites is rapidly emerging as a Category Killer,'' wrote Mark Mutkowski of BT Alex Brown, in a research report. Additional comments from that August 1996 report:

``Prime is well positioned to execute its strategy of establishing a dominant brand in the high-growth mid-priced all suite category.''

``In addition to generating some of the strongest real estate returns we have seen, we believe Prime is creating meaningful brand equity that will enhance shareholder equity over the long term.''

``We believe AmeriSuites has the most potential to become the dominant suite brand in the mid-price segment. If it does, Prime would be in an ideal position should it eventually decide to expand the brand through franchising.''

Bear Stearns' Jason Ader, in the 1998 Lodging Almanac writes ``...this segment is also influenced by the performance of its 'category killers.' In this segment, the...Prime Hospitality's AmeriSuites and Wellesley brands consistently outperform the segment in terms of occupancy, ADR, and RevPAR.''

A Merrill Lynch Lodging Industry report on Prime Hospitality (April, 1998) concludes: ``We believe Prime Hospitality is an excellent vehicle for investment in the rapidly growing all-suite and extended stay segments of the market as well as an excellent vehicle to invest in the start-up phase of becoming a multi-brand franchisor. We are impressed by the management's long-term vision and their focus on preparing the company for the future. We believe there is significant upside potential to Prime's stock price and are upgrading the stock from an Accumulate to a Buy for both the intermediate and the long term.

Raymond James & Associates' Harry Venezia, Jr. wrote in an April 1998 analysis: ``Prime Hospitality is in the midst of a financial and operational repositioning that will make it a higher growth, lower risk franchisor and manager primarily of its proprietary lodging brands.''

Comprehensive Franchise Support Program

``AmeriSuites present exceptional value to the investor and to the guest as well. Prime has developed one of the most comprehensive franchise support programs in the industry. We provide assistance and guidance to the franchisee at every step from financing to design, insurance, construction, and purchasing, to sales and marketing support, driving customers into the AmeriSuites hotels,'' notes O'Leary. For example:
 

Regional Vice Presidents

O'Leary introduced seven regional vice presidents for AmeriSuites. They are: Phil Boonisar, headquartered in Boston; Charles Noonan, headquartered in Atlanta; J. Stephen Casey, headquartered in Orlando, Fla.; Tom Busch, headquartered in Arlington Heights, Ill.; Richard Morris, headquartered in Lake Oswego, Ore.; Dave Wilensky, headquartered in Mission Viejo, Calif.; and Mark Hansen, headquartered in Irving, Texas.

AmeriSuites Profile -- Taking Care of Business(R) Is the Specialty

``The AmeriSuites are all new construction and built to the exacting design and technical specifications of Prime Hospitality for today's business travelers,'' O'Leary said. The units offer a suite format and a rich amenity package. Specially designated TCB Suites(R)(for Taking Care of Business) make up approximately 30 percent of the units at AmeriSuites Hotels. These in-suite offices are specially equipped for traveling executives who need offices while on the road. Each includes an oversized desk with a return and an ergonomic executive chair, task lighting, a two-line speaker phone, office supplies, plus an easy chair and an ottoman. In addition, each AmeriSuites Hotel has two to four meeting rooms.

Typically, AmeriSuites offer 30 percent more space than standard hotel rooms with distinct living, sleeping and eating areas. AmeriSuites offer suites with kitchenettes, dual telephone lines and dataports, 26`` remote televisions with videocassette players and irons and ironing boards. Other amenities include a free continental breakfast a fully equipped business center, a fitness center and a pool facility.