Extended Stay America, Inc. Becomes Fastest Growing Lodging Chain With the Opening of its 200th Property Extended Stay America, Inc. Becomes Fastest Growing Lodging Chain With the Opening of its 200th Property

FORT LAUDERDALE, Fla / Jan. 20, 1998--In just three years, Extended Stay America, Inc. ESA, the chain of extended stay lodging facilities founded by H. Wayne Huizenga and George D. Johnson, Jr., has emerged as the fastest-growing company owned and operated lodging chain in history, marked by the opening of the Company's 200th property this week in Santa Barbara, CA.

Compared to other national hotel chains, many of whom also rely heavily on franchising for their growth, Extended Stay America's growth is truly unprecedented. For example,

Best Western - founded in 1946; opened 200th property in

1975 (29 years)

La Quinta Inns - founded in 1968; opened 200th property in

1989 (21 years)

Holiday Inn - founded in 1952; opened 200th property in

1961 (9 years)

"I attribute our rapid growth and success to the demand in the extended stay lodging market which we believe is significantly greater, relative to supply, than in the lodging industry in general," noted Mr. Johnson. "It is our goal to continue our aggressive national expansion plans to become the leader of high quality, affordable extended stay lodging."

"Supporting our optimism is the extraordinary response of our guests who, according to our quarterly Gallup research, give us outstanding marks on our high value, their high levels of satisfaction and very high scores on intent to recommend and return," continued Mr. Johnson. "We intend to continue our aggressive expansion plans indefinitely, and to work diligently to continue improving both our products and our guest service," he added. "We believe the future for the Company is very bright indeed."

Capitalizing on Severe Supply/Demand Imbalance

The extended stay lodging category is the fastest growing segment in the lodging industry, and Extended Stay America is aggressively expanding to address and capitalize on a large, unsatisfied demand in the marketplace. Estimates of demand range from 300,000 to 730,000 rooms with only about 70,000 rooms being currently available.

A survey by travel research firm D.K. Shifflet & Associates Ltd., indicates that 36 percent of all hotel guests last year booked what they would classify as an "extended stay" of five nights or more.

In terms of occupancy, Extended Stay America's average occupancy rates for its three brands were at 80 percent for the third quarter of 1997, despite the fact that 38 percent of its open properties had been open less than six months. The average occupancy rate for the entire hotel industry is about 66 percent.

The Solution for a Mobile Workforce

The Extended Stay America chain encompasses three brands of lodging which offer slightly different amenities for long-term travelers: StudioPLUS Deluxe Studios (from $299 - $399 a week), Extended StayAmerica Efficiency Studios (from $199 - $299 a week) and Crossland Economy Studios (from $159 - $199 a week).

The Company was founded in January, 1995. The first Extended StayAmerica Efficiency Studios property opened in August of that same year in Spartanburg, SC. In January, 1997, the Company debuted the first Crossland Economy Studios in Independence, MO. In April, 1997, the Company consummated a merger with Studio Plus Hotels, Inc.

Extended Stay America's brands cater to travelers in need of accommodations for a week or more. Eighty five percent of the guests are business travelers such as consultants, engineers, subcontractors, employees in training programs and workers on temporary assignments. The properties are also frequented by people relocating to a new community, families building or remodeling a home and retirees visiting relatives.

StudioPLUS properties offer studios up to 425 square feet, with living areas (including a sleeper sofa), fully-equipped kitchens, expanded cable TV, voice mail, free local calls and computer data ports. Extended StayAmerica Efficiency Studios properties have rooms as large as 300 square feet, with fully-equipped kitchenettes, cable TV, recliners, voice mail, free local calls and computer data ports. Crossland Economy Studios feature 227-square-foot rooms, with kitchenettes, cable TV, voice mail, free local calls and computer data ports. All properties have on-site laundry facilities. StudioPLUS properties also have fitness centers and a pool or jacuzzi.

Extended Stay America properties do not feature bars, restaurants or convention facilities, amenities that increase room rates and tend to not be used by long-term business travelers on tight corporate expense accounts.

A Company Poised for Expansion

Today, there are 70 StudioPLUS, 124 Extended StayAmerica Efficiency Studios and 6 Crossland Economy Studios properties in 35 states. As of Dec. 31, 1997, the Company had 84 properties under construction and 146 sites for development.

In 1996, the Company ended the year with 40 operating properties - 82 percent more than originally projected. One year later, the Company exceeded its 1997 goal of operating 181 properties, by four hotels. And by the end of 1998, the Company plans to have more than 300 open properties, positioning itself to have 500 properties open and operating by year-end 2000.

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