MEMPHIS, Tenn., and PHOENIX, Ariz., Oct. / Promus Hotel Corporation PRH and Doubletree Corporation TREE today announced the new company formed by the merger of Promus Hotels and Doubletree Hotels will be headquartered in Memphis.

The new company, which will be named Promus Hotel Corporation, will be located at 755 Crossover Lane in the Audubon Woods business complex. The four-building campus is currently owned by Promus Hotels, which occupies 200,000 square feet in two of the buildings and has space readily available for expansion.

"We received tremendous assistance and support from city and economic development officials in both Phoenix and Memphis, therefore making this a very difficult decision," said Raymond E. Schultz, president and chief executive officer. "Our new company was fortunate to have two outstanding communities from which to choose."

Among the factors Schultz cited that weighed in favor of Memphis were:

* The existing office campus, which has space available for future growth;

* A significant investment in information systems technology in Memphis;

* Doubletree's offices in Phoenix have a lease that expires in April 1998;

* A move to Memphis would displace the fewest employees;

* Memphis' central location and its proximity to the combined company's managed hotels and franchisees;

* Memphis' favorable cost of living, housing costs and tax rates, both business and personal;

* An attractive package of economic incentives from the City of Memphis,

Shelby County, the State of Tennessee and the Chamber of Commerce Economic Development Partnership;

* A supporting recommendation from Runzheimer International, a consultant hired to analyze the respective locations.

"Although the company will locate its corporate staff in Memphis, we plan to maintain a strong regional presence in Phoenix and operate or franchise 21 hotels with more than 1,800 employees under the combined company in the Phoenix area," said Richard M. Kelleher, Doubletree president and chief executive officer. "Our solid commitment to Arizona remains unchanged, as we also will operate and franchise hotels in Tucson, Flagstaff and other locations statewide under the combined company's brands."

Schultz said that now that the location has been determined, the company will move ahead with creating an organizational structure and defining job responsibilities for the new company. The move to Memphis by Doubletree personnel will not take place until the merger is completed, which includes pending regulatory and shareholder approval. The transaction is expected to close by the end of the year.

With approximately $5 billion in annual system-wide revenues under ownership, management contract or franchise agreement, the combined new company will be the lodging industry's third largest revenue producer. As of June 30, 1997, the combined company would have had 1,136 hotels, approximately 172,000 rooms and more than 40,000 employees in all regions of the United States and its major markets, as well as selected locations in Latin America and Asia.

John C. Hawkins, Corporate Communications, 901-374-5529