Morgans Hotel Group Co. today announced a long-term management agreement for the San Juan Water and Beach Club Hotel, a 78-key beachfront hotel in Isla Verde, Puerto Rico. Among other awards, San Juan Water and Beach Club Hotel has been listed on Conde Nast Traveler’s Gold List as one of the “World’s Best Places To Stay” and has been number three on Conde Nast Traveler’s top ten list of Caribbean/Atlantic hotels. The owners intend to obtain development rights to build a Morgans branded hotel including a 30,000 square foot casino. The ownership group includes Hotel Development Corp., a subsidiary of the Puerto Rico Tourism Company. The hotel is located at 2 Calle Jose M Tartak Street, Carolina, Puerto Rico.

“San Juan Water and Beach Club Hotel has great potential. It’s housed in a unique art deco building and sits on a beautiful strip of beach,” said Marc Gordon, Chief Investment Office of Morgans Hotel Group. “This deal will allow Morgans to generate income immediately while the owners put together the development to convert the project into a Morgans hotel.”

“The establishment of Morgans Hotel Group in Puerto Rico represents a great leap towards delivering on our promise to diversify the hotel product here,” said Jaime Lopez-Diaz, Executive Director of the Puerto Rico Tourism Company. “After the future conversion of San Juan Water and Beach Club, Morgans will be able to boost travel and attract a more hip, rich and famous crowd.”

Morgans will assume management of the property as of October 18th, 2009. San Juan Water and Beach Club Hotel will remain open and operating as an independent hotel until it ultimately becomes a Morgans Hotel Group branded property.

“We are excited to have a presence in this coveted destination and to have the opportunity to impact the success of San Juan Water and Beach Club Hotel through our leadership and management expertise,” said Fred Kleisner, Chief Executive Officer of Morgans Hotel Group.

About Morgans Hotel Group | Morgans Hotel Group Co. (NASDAQ: MHGC) operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, Scottsdale and South Beach, Clift in San Francisco, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group has other property transactions in various stages of completion, including projects in Boston, Massachusetts; SoHo, New York; Las Vegas, Nevada; Palm Springs, California and Dubai, UAE. For more information please visit .

Forward-Looking and Cautionary Statements | Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995.

Jennifer Foley
Public Relations Director
212.277.4166
Morgans