HUDSON HOTELS RESTRUCTURES DEBT

Press Release: Hudson Hotels Corporation

July 27, 1999
ROCHESTER, N.Y.-- Hudson Hotels Corporation, (Nasdaq: HUDS "Hudson" or the "Company") yesterday announced that it has completed an agreement with the Oppenheimer Convertible Securities Fund ("Oppenheimer''), the holder of a $7.5 million debenture from the Company to reduce the face amount of the debenture to $3.0 million. This reduction will result in an immediate extraordinary gain for Hudson in the third quarter of 1999 in the amount of approximately $4.0 million. The revised debenture also modifies the maturity date, interest rate and conversion price of the debt.

Commenting on this event, E. Anthony Wilson, Hudson's Chairman and Chief Executive Officer said, "the Company's shareholders will directly benefit by obtaining an immediate approximately $4.0 million addition to shareholder's equity. The extraordinary gain will not be subject to tax due to the use of the Company's net operating loss carryforward.'' Mr. Wilson commented further, "the Company is very pleased with this transaction and feels that it accomplishes a very significant step in the Company's overall restructuring plans. Hudson continues to work with its advisors at Chase Securities Inc. and is optimistic that further progress in the restructuring process will be made later this year.''

Hudson Hotels Corporation is a Rochester, New York-based leading limited-service hotel development and management company. Hudson manages primarily well-known national hotel brands pursuant to franchise agreements from Marriott International, Inc. (NYSE: MAR), Promus Hotels Corporation (NYSE: PRH), Choice Hotels International, Inc. (NYSE: CHH), Red Roof Inns, Inc. (NYSE: RR), and U.S. Franchise Systems, Inc. (Nasdaq: USFS). The Company owns 25 hotels and has agreements to manage a total of 47 hotels with 5,134 rooms.

Except for the historical information presented in this press release, the press release includes forward looking statements that involve risks and uncertainties including, but not limited to, quarterly fluctuations and results, the management of growth, competition and other risks detailed in the company's Securities and Exchange Commission filing. Actual results may differ materially from such information as set forth herein.