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Promus  Reports 3rd Quarter Results; 
Adds 120 Hotels During First 9 Months 
 
MEMPHIS, Tenn. - Oct. 26, 1999  - Promus Hotel Corporation (NYSE:PRH), a leading hotel franchising and management company, reported net income of $63.1 million and diluted earnings per share of 80 cents for the third quarter of 1999. Net income for the third quarter of 1998 was $51.8 million or 60 cents per share.  Excluding unusual items, 1999 third quarter net income was $48.9 million, compared to 1998 third quarter net income of $52.8 million. Diluted earnings per share before unusual items was 62 cents compared to 61 cents for the same period last year. 

During the third quarter of 1999, the company generated $26.7 million of pre-tax net gains on asset dispositions, and expensed $0.7 million for employee retention agreements related to the 
Promus/Doubletree merger and $3.2 million in charges related to the Hilton Hotels Corp./ Promus business combination. Combined, these items positively affected the 1999 third quarter net income by $14.2 million or 18 cents per share. During the third quarter of 1998, the company realized an $8.5 million gain on the sale of securities and took a $10.1 million charge for severance costs related to the resignation of Promus� then Chairman/CEO and its President. These one time items reduced 1998�s third quarter net income by $1.0 million, or one cent per share. 

For the nine months ended September 30, 1999, the company reported net income before unusual items of $133.8 million, compared with $138.8 million before unusual items for the same 1998 period. Diluted earnings per share before unusual items for the 1999 nine month period was $1.64 compared to $1.59 for the same period last year. 

�Results for the third quarter were in line with our expectations�, said Norman P. Blake, Jr., Promus� Chairman, President and CEO. �Even though a total of 86 hotels within the Promus system experienced some level of disruption associated with hurricane Floyd, it was encouraging to note that the third quarter rate of growth in revenue per available room (RevPAR) increased over the second quarter level for all our core brands.� 

Unit Growth 

During the third quarter of 1999, the company added 46 hotels (5,324 rooms) to its system, consisting of: three Doubletree hotels, two Embassy Suites hotels, 33 Hampton Inn hotels, seven Hampton Inn Suites hotels, and a managed university hotel at the University of Pennsylvania. Also during the quarter, Promus removed a 284 room Doubletree hotel from its system. 

During the first nine months of 1999, Promus added 120 hotels (14,068 rooms) and the Promus relationship was terminated with 14 hotels (2,546 rooms). 

Brand Performance 

Hotels managed under the Doubletree brand generated a RevPAR increase of 1.0% over third quarter 1998.  Embassy Suites� RevPAR increased 1.9% for the quarter. Hampton Inn achieved a 2.1% RevPAR increase over the same period last year. Hampton Inn Suites� RevPAR increased 1.7% over the third quarter 1998. Homewood Suites� RevPAR gain was 3.2% in the third quarter. 

Year-to-date, Doubletree RevPAR increased 1.5% over the same 1998 period. Embassy Suites� RevPAR increased 1.7%, Hampton Inn�s and Hampton Inn and Suites� RevPAR increased 1.6% and 2.6% respectively, while Homewood Suites� year-to-date RevPAR decreased 0.9% over the first three quarters of 1998. 

Average daily rate, occupancy and revenue per available room (RevPAR) discussed in this release and in the attachments are reported for only those comparable hotels in the system as of September 30 and managed and/or franchised (does not include franchised Doubletree Hotels) since June 30, 1998 for the quarter comparison and January 1, 1998 for the year-to-date comparison. 

Other Notable Events 

On September 7, 1999, Promus and Hilton Hotels Corporation jointly announced an agreement for Hilton�s acquisition of Promus for a combination of cash and Hilton stock. Both companies have prepared a joint Proxy statement that provides further information regarding the transaction. Progress is being made with respect to planning the integration of the two companies. It is anticipated that, following shareholder approval, the transaction will be closed on November 30, 1999. 

Due to the discussions between Promus and Hilton, and the subsequent agreement related to the business combination, Promus did not repurchase any of its shares during the third quarter. Furthermore, due to the pending transaction, Promus does not intend to repurchase any of its shares in the fourth quarter. 

During the quarter the company successfully completed the sale of 10 Hampton Inn hotels for $99.8 million and four Homewood Suites hotels for $ 35.5 million. Sales of an additional nine Homewood Suites hotels are scheduled to close in the fourth quarter. 
 
 
 
Performance Statistics
    
  Third Quarter Change vs. Year-to-date Change vs.
  Quarter Ended Sept. 30, 1999 Quarter Ended Sept. 30, 1998 Nine Mos. Ended Sept. 30, 1999 Nine Mos. Ended Sept. 30, 1998
Doubletree Hotels, Suites Clubs    
Occupancy 73.7% (0.5) pts 71.5% (0.2) pts
ADR $ 103.70  1.7% $ 105.99  1.7%
RevPAR $ 76.39  1.0% $ 75.83  1.5%
Embassy Suites    
Occupancy 75.8% 1.3 pts 75.3% 1.1 pts
ADR $ 119.01  0.2% $ 122.06  0.2%
RevPAR $ 90.17  1.9% $ 91.92  1.7%
Hampton Inn    
Occupancy 73.4% (1.5) pts 70.2% 1.6 pts
ADR $ 72.39  4.1% $ 70.89  3.9%
RevPAR $ 53.11  2.1% $ 49.77  1.6%
Hampton Inn Suites    
Occupancy 73.7% (0.4) pts 71.5% 0.0 pts
ADR $ 90.48  2.1% $ 85.27  2.6%
RevPAR $ 66.67  1.7% $ 60.93  2.6%
Homewood Suites    
Occupancy 77.7% 3.8 pts 75.8% (.6) pts
ADR $ 93.22  -1.8% $ 95.89  -1.7%
RevPAR $ 72.42  3.2% $ 72.70  -0.9%
Other Hotels    
Occupancy 71.2% (2.3) pts 68.7% (1.9) pts
ADR $ 103.31  3.8% $ 103.12  4.2%
RevPAR $ 73.58  0.5% $ 70.87  1.3%
         
         
  Number of Rooms/Suites  
 
As of
 Change since  
  9/30/99 6/30/99 12/31/98  
Doubletree Hotels, Suites Clubs    
Company Owned 4,649  -  (97)  
Leased 3,877  -  (935)  
Joint Venture 1,100  -  98   
Management Contracts 24,962  (123) 633   
Franchised 12,281  469  358   
Total Doubletree 46,869  346  57   
Embassy Suites    
Company Owned 1,299  -  -   
Joint Venture 5,098  -  154   
Management Contracts 15,049  (1) 624   
Franchised 14,710  483  805   
Total Embassy Suites 36,156  482  1,583   
Hampton Inn    
Company Owned -  (1,378) (1,504)  
Leased 2,250  -  -   
Management Contracts 929  -  -   
Franchised 90,203  4,562  8,805   
Total Hampton Inn 93,382  3,184  7,301   
Hampton Inn Suites    
Company Owned 133  133  133   
Management Contracts 408  -  -   
Franchised 6,792  657  1,609   
Total Hampton Inn Suites 7,333  790  1,742   
Homewood Suites    
Company Owned 2,127  (478) (105)  
Management Contracts 949  478  395   
Franchised 6,112  (2) 1,031   
Total Homewood Suites 9,188  (2) 1,321   
Other Hotels    
Company Owned 1,622  2  2   
Leased 6,433  -  -   
Management Contracts 2,583  238  (484)  
Total Other Hotels 10,638  240  482   
         
Total Promus System    
Company Owned 9,830  (1,721) (1,571)  
Leased 12,560  -  (935)  
Joint Venture 6,198  -  252   
Management Contracts 44,880  592  1,168   
Franchised 130,098  6,169  12,608   
Total Promus System 203,566  5,040  11,522   
         
         
 
System Size 
    
  Number of Hotels  
 
As of
 Change since  
  9/30/99 6/30/99 12/31/98  
Doubletree Hotels, Suites Clubs    
Company Owned 16  -  -   
Leased 14  -  (4)  
Joint Venture 4  -  -   
Management Contracts 91  -  4   
Franchised 52  2  1   
Total Doubletree 177  2  1   
Embassy Suites    
Company Owned 6  -  -   
Joint Venture 19  -  -   
Management Contracts 60  -  2   
Franchised 65  2  3   
Total Embassy Suites        
Hampton Inn    
Company Owned -  (10) (10)  
Leased 18  -  -   
Management Contracts 7  -  -   
Franchised 878  43  88   
Total Hampton Inn 903  33  77   
Hampton Inn Suites    
Company Owned 1  1  1   
Management Contracts 3  -  -   
Franchised 59  6  14   
Total Hampton Inn Suites 63  7  15   
Homewood Suites    
Company Owned 18  (4) (1)  
Management Contracts 8  4  3   
Franchised 58  -  8   
Total Homewood Suites 84  -  10   
Other Hotels    
Company Owned 10  -  -   
Leased 41  -  -   
Management Contracts 15  1  (2)  
Total Other Hotels 66  1  (2)  
         
Total Promus System    
Company Owned 51  (13) (11)  
Leased 73  -  (4)  
Joint Venture 23  -  -   
Management Contracts 184  5  7   
Franchised 1,112  53  114   
Total Promus System 1,443  45  106   
 
 
Revenue statistics are for comparable hotels, and include information only for those hotels in the system as of September 30, 1999 and managed or franchised by Promus or managed by Doubletree since April 1, 1998 for the quarterly comparison and since January 1, 1998 for the year-to-date comparison. Doubletree franchised hotels are not included in the statistical information. 

Includes results for 15 Red Lion hotels as well as the results for hotels managed/leased under other franchisors� brands or as independent hotels and conference centers. 

For statistical purposes only, Promus classified unconsolidated joint ventures in which it holds less than a 20% interest as �Management Contracts� and consolidated joint ventures in which 
it owns more than a 50% interest as �Company Owned� hotels. 

Includes 15 Red Lion hotels as well as hotels managed/leased under other franchisors� brands or as independent hotels and conference centers. 

Promus Hotel Corporation (NYSE:PRH) is the franchisor/operator of the Doubletree Hotels, Doubletree Guest Suites, Embassy Suites, Hampton Inn, Homewood Suites, Hampton Inn  Suites, Doubletree Club, Red Lion Hotels, Embassy Vacation Resort and Hampton Vacation Resort brands. The company also manages non-Promus branded hotels and facilities in its University Hotel  Conference Center division. The company franchises, operates or owns hotels throughout the United States and in Canada, Mexico and Latin America. Promus is 
headquartered in Memphis, Tennessee and has approximately 40,000 employees. 

Certain matters discussed in this press release may constitute forward-looking statements within the meaning of the federal securities laws.
CONTACT:
Promus Hotel Corporation, Memphis
Gregg Swearingen, 901/374-5468
http://www.promus.com
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