New Hotel Management Company Formed to Promote Signature Carmel Valley Resorts

Press Release: Bernardus Lodge
January 9, 2002
CARMEL VALLEY, CA -- The Hongkong and Shanghai Hotels, Limited (HSH) and Baylaurel LLC, announced yesterday that they have formed Valley Resort Management LLC to promote and develop the owners' respective properties, Quail Lodge Resort and Golf Club and Bernardus Lodge.

The new company will oversee the operation, marketing and further development of both resorts, leveraging the strength of the two hotel brands and increasing their marketing reach. The opportunity also exists of future expansion by taking on similar properties.

Individual ownership of the resorts is unchanged, however, with both HSH and Baylaurel remaining committed to their respective hotels within their shared market niche.

James A. Cecil, currently general manager of Bernardus Lodge and chief operating officer of Baylaurel LLC, assumes the role of managing director of Valley Resort Management. In this position, he is responsible for developing all marketing and operations strategies for both the 97-room Quail Lodge Resort and the 57-room Bernardus Lodge.

``The hotels are recognized as two of the top destinations on the Monterey peninsula,'' said Cecil. ``The establishment of Valley Resort Management provides fresh impetus for both resorts to capitalize on their respective strengths and to maximize their potential.''

About The Hongkong and Shanghai Hotels, Limited

The principal business of The Hongkong and Shanghai Hotels, Limited is the ownership and management of prestigious hotel, commercial and residential properties in key destinations in Asia and the USA. Within its hotel management division, The Peninsula Group, properties in gateway cities include: The Peninsula Hong Kong; The Peninsula Bangkok; The Peninsula Manila; The Peninsula New York; The Peninsula Chicago; The Peninsula Beverly Hills; The Palace Hotel Beijing; The Kowloon Hotel, Hong Kong; and the 97-room Quail Lodge Resort and Golf Club, Carmel, California.

About Baylaurel LLC

Baylaurel LLC is the owner of Bernardus Lodge and the Bernardus Winery and Vineyard. Bernardus Lodge features 57 luxurious suites, the award-winning Marinus restaurant, a full-service spa, swimming pool and outdoor warming pool, two tennis courts and a croquet lawn. Bernardus Lodge is the recipient of Mobil's prestigious Four Star rating for both the Lodge and Marinus and is a member of the Small Luxury Hotels of the World®. Bernardus Winery and Vineyard features 210 acres and currently produces several award-winning varietals, including the flagship Marinus blend, as well as Sauvignon Blanc and Chardonnay.

                              QUICK FACTS

QUAIL LODGE RESORT & GOLF CLUB, Carmel Valley, California

Location:       5 minutes' drive from Carmel-by-the-Sea, Monterey
                Peninsula, California. Within easy reach of the
                Big Sur coastline, Monterey's Fisherman's Wharf, and
                the famous 17-Mile Drive
Property:       850 acres
Accommodations: 97 rooms including 14 suites, an Executive Villa and
                three pool/lakeside lodges
Meeting space:  8,000 square feet
Recreation:     18-hole championship golf course, four tennis courts,
                two outdoor swimming pools, spa, hiking trails,
                biking. Nearby fishing, horseback riding, and ocean
                sports. Scenic, historical and winery tours are
                available.
Restaurants
& Bars:         The Covey Restaurant serving Wine Country cuisine
                The Lounge and Covey deck for favorite cocktails and
                 hors d'oeuvres
                The Country Club, serving breakfast in the fireside
                 lounge, lunch in the dining room
Website:        www.quail-lodge-resort.com


BERNARDUS LODGE, Carmel Valley, California

Location:       15 minutes' drive from Carmel-by-the-Sea, Monterey
                Peninsula, California
Property:       22 acres
Vineyard:       210 acres, Marinus label
Accommodations: 57 suites located in nine single- and two-story adobe
                village-style buildings
Meeting space:  4,000 square feet
Recreation:     Spa and salon, swimming pool, two tennis courts, bocce
                court, and croquet lawn. Nearby hiking, horseback
                riding, biking, wine tasting and antique shopping in
                Carmel Valley Village, and golf at local championship
                courses
Restaurants:    Marinus, the signature restaurant serving
                 California-French cuisine
                Wickets Bistro, serving French country cuisine in a
                 casual resort setting
Website:        www.bernardus.com


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Contact: 
     Murphy O'Brien, Inc.
     for Baylaurel/Valley Resort Management
     Chris Volk/Tricia Rosentreter, 310/453-2539
                                    310/264-0083 fax
     cvolk@murphyobrien.com
     tricia@murphyobrien.com
                        or
     The Peninsula Group
     Teresa Delaney, 212/903-3903
                     212/903-3974 fax
     tdelaney@peninsula.com
                        or
     Hongkong and Shanghai Hotels, Limited
     Kate Kelly, 852/2840 7741
                 852/2868 4770 fax
     kkelly@peninsula.com