ROYAL HOST TO INCREASE OFFER FOR CHIP REIT; OFFER EXTENDED TO JULY 19, 1999

Press Release: Royal Host

July 9, 1999
CALGARY, ALBERTA-- Royal Host Real Estate Investment Trust (Royal Host) announced Tuesday that it intends to revise its offer to acquire 100 percent of the outstanding trust units of Canadian Hotel Income Properties Real Estate Investment Trust (CHIP). This revised offer will provide greater consideration than the current offer of 1.19 trust units of Royal Host for each trust unit of CHIP.

"We are very pleased with the positive response our offer has received from CHIP's unitholders," says R.B. Royer, President and CEO of Royal Host. "CHIP unitholders clearly see the merits in a combination of Royal Host and CHIP. The terms of our revised offer will reflect the feedback we've received on our bid,'' added Royer.

To make the revised offer, Royal Host has extended the expiry time of its current offer to 8:00 pm (Calgary time) on July 19, 1999. A formal Notice of Variation in respect of the extension will be mailed to registered unitholders of CHIP.

Royal Host will announce the terms of the revised offer as soon as they have been finalized.

Benefits that will accrue to the Royal Host and CHIP unitholders from the Royal Host offer include:

- Increased distributable cash due to significant operational savings and synergies.

- Enhanced critical mass and market presence.

- Increased liquidity and access to capital.

- Greater diversification and stability.

- Experienced management team with a significant equity interest.

The Royal Host trust units 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 may be 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