IRVING, Texas�May 1, 2002 - FelCor Lodging Trust Incorporated (NYSE: FCH), one of the nation�s largest hotel real estate investment trusts (REITs), today reported operating results for the first quarter ended March 31, 2002. 

FelCor�s first quarter results reflect Revenue Per Available Room ("RevPAR") below prior year, but consistent with previous expectations of a gradual increase in hotel occupancy. The portfolio�s occupancy reflects that leisure travel is recovering faster than business travel. Operating margins were better than anticipated, as FelCor continued to work with its brand managers to maintain effective cost controls.

FelCor�s first quarter 2002 recurring Funds From Operations ("FFO") of $29.3 million, or $0.44 per share, equals consensus analyst estimates. FFO for the same period last year totaled $71.4 million, or $1.07 per share. On a pro forma basis, assuming that the acquisition of the 88 leases from Six Continents Hotels completed on July 1, 2001 had been acquired on January 1, 2001, FFO for the first quarter 2001 was $68.9 million, or $1.03 per share. First quarter 2002 recurring Earnings Before Interest, Taxes, Depreciation, Amortization, and other non-cash charges ("EBITDA"), totaled $77.2 million, compared to $117.3 million for first quarter 2001 and $114.8 million on a pro forma basis for the first quarter 2001. The Company reported a net loss of $6.1 million, or a loss per share of $0.23, compared to the first quarter 2001 net loss of $6.8 million, or loss per share of $0.25. On a pro forma basis, the Company reported first quarter earnings of $26.5 million. The loss reported for the first quarter of 2001 resulted from $36.2 million of non-recurring expense related to the acquisition of DJONT on January 1, 2001. 

FelCor�s total hotel portfolio RevPAR for the first quarter was 18.1 percent below that for the same period of 2001. Compared to the same months in 2001, RevPAR for January decreased 21.5 percent, February decreased 15.6 percent and March decreased 17.4 percent. The deviation in March from the improving RevPAR trend is attributed primarily to the negative impact related to the timing difference between the Easter and Passover holidays in 2002, as compared to 2001. For the quarter, occupancy was down 770 basis points, to 60.6 percent, and average daily rate ("ADR") was down 7.6 percent, to $100.36, compared to the same quarter of 2001. Occupancy increased from 55.2 percent for the fourth quarter of 2001 to 60.6 percent for the first quarter of 2002.

"Our portfolio has experienced an increase in occupancy as the economy has started to turn around. There also has been an increase in demand, principally from the leisure traveler, as we move further from the events of September 11," said Thomas J. Corcoran, Jr., FelCor�s President and CEO. "Although group business is coming back, we have not yet seen a substantial improvement in transient business travel."

The operating margin for FelCor�s hotel portfolio during the first quarter 2002 was 33.6 percent, and declined by 260 basis points, as compared to the operating margin for the same period in 2001. "Although down from last year, our operating margins were actually better than expected due to the effective cost containment measures that were implemented with our brand managers," added Mr. Corcoran. 

During the first quarter of 2002, interest expense, net of interest income, was $41.2 million, compared to $39.4 million for the first quarter of prior year, relating primarily to FelCor�s excess cash carried during 2002. 

Capital Structure:

At March 31, 2002, FelCor had $1.9 billion of debt outstanding, which included $39.3 million drawn under its $615 million line of credit and the weighted average life of the Company�s debt was seven years. At March 31, 2002, FelCor had $112.0 million in cash and cash equivalents.

In April, FelCor closed on the sale of its 183-room Doubletree Guest Suites hotel in Boca Raton, Florida with net sales proceeds of $6.5 million. In addition, the Company has entered into contracts for the sale of one of its hotels in Kansas, for approximately $2.0 million, and for the sale of certain retail space at its Allerton Crowne Plaza hotel in Chicago, for approximately $17 million. Both the Boca Raton and the Kansas hotels had been previously identified as non-strategic assets and classified as held for sale.

Second Quarter and 2002 Guidance:

For the second quarter of 2002, FelCor currently anticipates its portfolio RevPAR will be four to seven percent below the comparable period of the prior year. FFO per share is expected to be within the range of $0.78 to $0.86 per share and EBITDA is expected to be within the range of $101 million to $106 million for the same period. 

The Company�s RevPAR for April 2002 was approximately 8.7 percent below the same period of 2001, which includes improved leisure demand along with the timing difference of the Easter and Passover holidays between 2002 and 2001. The Company�s occupancy for April was approximately 67 percent as compared to prior year of 69 percent.

FelCor has re-affirmed its previous guidance that full year 2002 hotel portfolio RevPAR, compared to 2001, will be flat to negative three percent. RevPAR increases (decreases) by quarter for the remainder of 2002, compared to 2001, are currently expected to fall within the following ranges:

FFO per share for the full year 2002 is anticipated to be within the range of $2.25 to $2.60 per share and EBITDA to be within the range of $345 to $360 million. The Company is currently anticipating 2002 maintenance capital expenditures to be from $40 to $50 million.

"We are pleased that FelCor�s first quarter 2002 earnings were at the high end of the earnings guidance previously provided. Based on our first quarter results, and improving economic and operating trends, we remain comfortable with our 2002 guidance," said Richard J. O�Brien, FelCor�s Executive Vice President and Chief Financial Officer.

FelCor�s decision to pay a common dividend will continue to be determined each quarter, based upon the operating results of that quarter, economic conditions, and other operating trends. FelCor currently anticipates distributing an aggregate of $1.00 in dividends per common share during 2002, based on the low end of the Company�s current FFO guidance. For the first quarter, FelCor paid a $0.15 common dividend per share based on the first quarter results.

                                         March 31, 2002    December 31, 2001
Investment in hotels at cost    $4,526,338   $4,525,501
Book value of real estate assets, net of depreciation   3,631,804   3,664,712
Book value per share   25.84   26.23
Total cash and cash equivalents   112,031   128,742
Total assets   4,053,401   4,088,929
Total debt   1,924,952   1,938,408
Total stockholders' equity   1,664,258   1,683,194

FelCor is the only lodging REIT that owns a diversified portfolio of nationally-branded, upscale and full-service hotels managed by strategic brand managers such as Hilton Hotels, Six Continents Hotels, and Starwood Hotels & Resorts. 

With the exception of historical information, the matters discussed in this news release include "forward looking statements" within the meaning of the federal securities laws.