ROYAL HOST EXTENDS OFFER FOR CHIP

Press Release: Royal Host

August 2, 1999
CALGARY, ALBERTA-- Royal Host Real Estate Investment Trust (Royal Host) has extended the expiry time of its offer to acquire 100 percent of the outstanding trust units of Canadian Hotel Income Properties Real Estate Investment Trust (CHIP) to 8:00 p.m. (Calgary time) on August 24, 1999. A formal notice of variation in respect of the extension will be mailed to registered unitholders of CHIP.

Royal Host has extended its offer to give CHIP unitholders additional time to receive and consider all relevant information in connection with the competing partial bid for CHIP being made by Belkorp Industries Inc.

The Royal Host offer is on the basis of, at the election of the CHIP unitholders (i) 1.3 trust units of Royal Host, or (ii) 1 Disposition Proceeds Right, subject to an aggregate maximum of approximately 6.5 million Disposition Proceeds Rights ($67.8 million) based on the number of currently issued and outstanding CHIP Units.

The Royal Host trust units and Disposition Proceeds Rights may be offered only pursuant to the takeover bid circular. This press release does not constitute an offer to sell or solicit an offer to buy. Nor shall there be any sale of these securities in the United States or any other jurisdiction in which such solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of the United States or other such jurisdictions.

Royal Host is a closed-end real estate investment trust (REIT) with a national portfolio of 36 hotels with over 4,400 guest rooms primarily in the upper-mid-market and upscale segments. Royal Host owns the Travelodge Master Franchise in Canada; provides hotel and resort management services for the portfolio and to third party properties, markets vacation intervals in hotels, resorts and luxury houseboats, and operates a facility for customers to trade and bank prepaid vacation weeks.

Royal Host maximizes earnings while minimizing 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 (RYL.UN).

Statements contained in this news release regarding expected financial results and other planned events are forward-looking statements. As a result, they are subject to uncertainties and risks, including the ability of Royal Host to successfully implement its strategies including: the acquisition of CHIP; the successful integration of this acquisition into Royal Host; and, the subsequent realization of expected synergies. Each of these events and conditions affecting real estate investment and the hotel industry generally maybe impacted, among other things, by economic, competitive or regulatory conditions.

Contact:
Royal Host Real Estate Investment Trust
R.B. Royer
President and C.E.O.
(403) 258-5600
(403) 292-0922
investorinfo@royalhost.com
http://www.royalhost.com