"While we continue to believe in the favorable economics and supply/demand imbalance in the mid-priced extended stay segment, by scaling back development now, we will be better positioned financially to take advantage of investment opportunities as they arise", said Don Landry, Sunburst's CEO.

"More limited development, focusing only on A+ sites with high barriers to entry, should also improve our returns on invested capital", Landry added.

Sunburst is a leading independent hotel owner/operator with 83 hotels in 28 states across the U.S. Sunburst is also the number one owner/developer of MainStay(R) Suites mid-priced, extended stay hotels.

Sunburst has opened 10 new extended-stay MainStay(R) hotels this year in Indianapolis, IN, Louisville, KY, Kansas City, MO, Greenville, SC, Lake Mary, FL, Nashville, TN, Denver, CO, Jacksonville, FL, Fishkill, NY and Pittsburgh, PA.

It has 9 more under construction in Miami Springs, FL, Tempe, AZ, Annapolis, MD, Peabody, MA, Raleigh, NC, N. Charleston, SC, Malvern, PA, Schaumburg, IL and Secaucus, NJ. Those hotels will be completed and opened in late 1998 and the first half of 1999.

MainStay(R)Suites hotels offer alternative lodging for guests who  wish to have home-like amenities while traveling. For reservations for MainStay(R) Suites hotels, call 1-800-660-6246.

The references to improving returns, future acquisitions, and future development are forward - looking statements. Such statements are subject to certain risks and uncertainties, which may cause the actual performance of Sunburst to differ. Some of these uncertainties are discussed under the heading "Risk Factors" in Sunburst's SEC filings. These forward-looking statements speak only as of the date hereof, and Sunburst does not undertake any obligation to publicly release the result of any revision in such forward-looking statements which may be made to reflect events or circumstances after the date hereof.