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Royal Host Announces Mortgage Financing

Press Release: Royal Host Real Estate Investment Trust
September 25, 2002
CALGARY, AB -- Royal Host Real Estate Investment Trust (REIT) announces the completion of a $25 million first mortgage on the Grand Okanagan Resort and Conference Centre. The loan represents a 50% loan to value on the Resort, and replaces approximately $14 million in 12% debt on the hotel, which had matured. Approximately $2 million of the remaining proceeds will be used to renovate the property and the balance will be used for working capital and general purposes.

The mortgage has a 3-year term at a fixed rate of 8.50%. "This financing successfully completed another piece of our financing puzzle", says R. B. Royer, President and CEO of Royal Host. "The added cash also improves our financial flexibility in terms of future acquisitions and potential property investment."

Royal Host REIT owns 38 hotels, manages 78 properties and franchises 118 locations for over 16,000 guestrooms in the mid-market to upscale segments. Royal Host owns the master franchise rights for both the Travelodge and Country Hearth Inns brands in Canada. Royal Host also provides hotel and resort management services for the portfolio and to third party properties, markets vacation intervals in hotels, resorts, and operates a facility for customers to trade and bank prepaid vacation weeks.

Royal Host's objective is to maximize earnings while balancing risk for its unitholders through efficient operations, strong marketing and a focus on providing travelers with superior accommodations and travel experiences. Royal Host units are traded on the Toronto Stock Exchange under the trading symbol "RYL.UN" and "RYL.DB".

This press release contains certain forward-looking statements relating, but not limited to, Royal Host's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan" or similar words suggesting future outcomes. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such factors include, but are not limited to economic, competitive and lodging industry conditions. Royal Host disclaims any responsibility to update any such forward-looking statements.

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Contact:

Royal Host REIT
Peter Sikora
Chief Financial Officer
Phone: (403) 259-9800
Fax: (403) 259-8580
Email: investorinfo@royalhost.com
Website: www.royalhost.com

Source: Royal Host Real Estate Investment Trust