Strategic Hotel Capital, Inc. Provides Updated Assessment of Hurricane Katrina Impact on Hyatt Regency New Orleans

CHICAGO, Strategic Hotel Capital, Inc. (NYSE:SLH) today announced that given the preliminary discussions and progress with its insurance brokers and insurers' representatives, management anticipates that its casualty and business interruption insurance will cover the majority of the damage and lost business to the hotel.

Significant repair work was begun in the last two weeks, including the installation of over 700 temporary windows to prevent further water damage. The roof has been temporarily patched, the atrium windows repaired, and debris is being removed from all the public spaces. Approximately a half-dozen engineering and construction teams are still in the process of completely assessing the damage.

The property is insured for both damage and business interruption to a total limit of $350 million, with a deductible estimated to be approximately $11 million. Additionally, the business interruption insurance covers the actual loss sustained during the period of restoration, as well as a 12-month ramp-up period thereafter.

Commenting on the existing renaissance opportunity, Laurence Geller, chief executive officer of Strategic Hotel Capital stated, "The employees of the Hyatt Regency New Orleans did simply an outstanding job at providing extraordinary service under the worst possible circumstances. In rebuilding and reinstating our hotel, we will provide that same dedication and are working with state and local government officials to create a public-private partnership that will result in a more vibrant Hyatt-Superdome district than existed prior to this tragedy. Tourism is the engine that drives this New Orleans economy, with over 10 million visits annually generating $156 million in state tax revenues, for an overall economic impact of $5 billion. New Orleans is one of the crown jewels of America, and the Hyatt Regency, as one of the largest rooms and meeting space providers, will once again play a major role in the rebirth and growth of one of the country's premier destinations."

The company has begun discussions with architects, interior planners and consultants on the renovation plans, and management anticipates being able to provide further updates on these plans, as well as the impact to earnings during the upcoming third quarter conference call.

During and subsequent to the hurricane, the hotel accommodated and fed more than 3,800 people, including guests, hotel employees and their families, the mayor and city workers, emergency workers and members of the media. The hotel is currently secured by a reduced workforce. Strategic Hotel Capital, in conjunction with the Global Hyatt Corporation, has established a Worldwide Hyatt Relief fund for employees and funded a significant initial corporate donation.

Strategic Hotel Capital, Inc. is a real estate investment trust, which owns and asset manages high-end hotels and resorts. The company has ownership interests in 17 properties with an aggregate of 7,934 rooms. For further information, please visit the company's website at /.

This press release contains forward-looking statements about Strategic Hotel Capital, Inc. (the "Company"). Except for historical information, the matters discussed in this press release are forward-looking statements subject to certain risks and uncertainties. Actual results could differ materially from the Company's projections or expectations. Factors that may contribute to these differences include but are not limited to the following: risks related to natural disasters; the pace and extent of the recovery of the New Orleans economy and tourism industry; the successful collection of insurance proceeds and rehabilitation of the New Orleans property; rising interest rates; availability of capital; ability to obtain or refinance debt; cash available for capital expenditures; competition; demand for hotel rooms in our current and proposed market areas; economic conditions generally and in the real estate market specifically; the effect of threats of terrorism and increased security precautions on travel patterns and hotel bookings; the outbreak of hostilities and international political instability; legislative or regulatory changes, including changes to laws governing the taxation of REITs; and changes in generally accepted accounting principles, policies and guidelines applicable to REITs.

Additional risks are discussed in the company's filings with the Securities and Exchange Commission. Although the company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.