Suburban Lodges Announces Plans to Resume Stock Repurchases

The Company had stopped its stock repurchases on October 1, 2000.

David E. Krischer, the Company's Chief Executive Officer, said, "Because of the continued low market price of our stock and in line with our commitment to enhance shareholder value, in the final quarter of 2000 we suspended our stock repurchase program and engaged Salomon Smith Barney to assist us in the process of evaluating our strategic alternatives. The strategic alternatives considered included, among other possibilities, a merger or sale of the business, some other business combination or joint venture, a sale of all or a portion of the Company's assets, continuation of the Company's growth strategy or a change in that strategy.

"We have now completed our review and believe that the most appropriate course of action for the Company is to continue its strategy of converting to a franchising business model. We believe that this strategy, in combination with our resumption of the stock buyback program and selective sales of real estate assets, presents the greatest potential for maximizing shareholder value.

"As we pursue our business model, we do so from a position of strength," Mr. Krischer continued. "The performance of our company-owned hotels continues to be strong, and our debt to equity ratio is well below hotel industry norms. Even as we reviewed possible strategic alternatives, we remained committed to building our business. In fact, we have already increased the size of our franchise sales group to 19 as we approach our recently announced goal of 22 sales directors. Our Suburban Lodge brand continues to enhance its position as the leading economy extended stay brand and, together with its sister brand, GuestHouse International, is actively pursuing, and realizing, growth in the franchise community."

As a result of the completion of the strategic analysis, the Company will record pre-tax expenses associated with the review, totaling approximately $475,000, in the first quarter of 2001. Moreover, in light of both the continued poor capital market environment for hotel development by public hotel companies and the Company's strategic review, the Company has decided to actively dispose of eleven sites that it had been holding for future hotel development. As a result of this decision, the Company will record an impairment reserve, expected to be approximately $6.7 million before reduction for income tax savings, in the first quarter. The majority of the impairment reserve represents amounts spent before the end of 1998 when the Company was actively developing its own Suburban Lodge hotels. Development expenditures such as architectural and engineering fees, interest and, in several cases, initial construction activities that were incurred at that time represent the largest portion of the write-down. The Company believes that it will realize in excess of $10.0 million upon the ultimate sale of these sites.

The Company anticipates that its first quarter operating results, excluding the unusual charges described in the preceding paragraph, will be at the top end of analysts' expectations.

As of March 31, 2001, the Company has purchased 3,735,798 of the 4,500,000 shares of Common Stock authorized for repurchase by its Board of Directors and has 12,003,570 shares outstanding.

Suburban Lodges of America, Inc. owns, franchises and manages Suburban Lodge hotels, the nation's largest chain of economy extended-stay hotels, and franchises GuestHouse International hotels, the mid-market nightly stay hotel chain with the franchisee-friendly franchise agreement.

This news release contains forward-looking statements concerning the Company's plans, beliefs and expectations for future periods. These statements may be identified by the use of words such as "intends," "believes," "expects," "anticipates" and words of similar import. These forward-looking statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from the expectations expressed or implied by such statements. These risks and uncertainties include, among others, (i) changes in economic conditions, (ii) reduced demand for and increased supply of extended stay and other forms of lodging, and increased competition at all levels in the hotel industry, (iii) the ability of the Company to achieve desired growth in the number of franchised Suburban Lodge and GuestHouse International hotels, (iv) various factors affecting the ability of the Company's franchisees to build or renovate additional hotels including the availability of adequate financing on commercially acceptable terms, development risks and inefficiencies, weather delays, zoning and other governmental and environmental approvals, (v) the ability of the Company's operating and financial system to effectively manage growth, (vi) dependence on senior management, (vii) the Company's financial condition and (viii) other risks and uncertainties set forth in the Company's filings with the Securities and Exchange Commission.

The forward-looking statements referred to in the preceding paragraph are based upon management's present expectations and the information available at this time. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or other factors.