Morgans Hotel Group Announces a New Management Contract for Hotel Las Palapas in Playa del Carmen, Riviera Maya, Mexico

NEW YORK, Nov 23, 2009 (BUSINESS WIRE) --
MHGC | Quote | Chart | News | PowerRating -- Morgans Hotel Group Co. (NASDAQ: MHGC | Quote | Chart | News | PowerRating) ("Morgans") today announced a
management agreement for the Hotel Las Palapas, located in the vibrant
Playa del Carmen resort area, which is owned by affiliates of Walton
Street Capital ("Walton"). Morgans and Walton are already joint venture
partners in the ownership of two other hotels - the Sanderson and St
Martins Lane hotels in London.

Hotel Las Palapas is a 75-key beachfront hotel located in the heart of
Playa del Carmen, Riviera Maya, Mexico. The hotel, with its magnificent
beach of white sand, is centrally located on the 5th Avenue of Playa del
Carmen, famous for its numerous restaurants, bars and small shops.
Walton plans to convert the site into a Morgans branded hotel when
economic conditions improve.

"We are pleased to be working with Walton Street Capital on another
international hotel. The beachfront Hotel Las Palapas in the popular
resort destination of Playa del Carmen has great potential," said Marc
Gordon, President of Morgans Hotel Group. "This deal will allow Morgans
to generate income immediately while Walton puts together the
development to convert the project into a Morgans hotel."

Morgans will assume management of the property as of December 15th,
2009.

Morgans has a five-year management agreement with one five-year renewal
option.

About Walton Street Capital

Walton Street Capital, L.L.C. was founded in 1994 and is a private real
estate investment firm operating in the U.S. and abroad. Since its
inception, Walton Street has received equity commitments in excess of
$5.7 billion from public and corporate pension funds, foreign
institutions, endowments and foundations, trusts and high net worth
individuals. Walton Street has invested in over $10 billion of gross
assets in approximately 170 separate transactions in U.S. and
international real estate, including the development and acquisition of
office, hotel, retail, industrial, multi-family, for-sale residential,
senior and student housing, and golf assets through individual,
portfolio and company-level transactions.

About Morgans Hotel Group

Morgans Hotel Group Co. (NASDAQ: MHGC | Quote | Chart | News | PowerRating) operates and owns, or has an
ownership interest in, Morgans, Royalton and Hudson in New York, Delano
and Shore Club in South Beach, Mondrian in Los Angeles, Scottsdale and
South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and
St Martins Lane in London. Morgans Hotel Group and an equity partner
also own the Hard Rock Hotel & Casino in Las Vegas and related assets.
Morgans Hotel Group has other property transactions in various stages of
completion, including projects in SoHo, New York, Palm Springs,
California, Isla Verde, Puerto Rico and Dubai, UAE. For more information
please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements

Statements contained in this press release which are not historical
facts are forward-looking statements as the term is defined in the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by the use of words such as "expects,"
"plans," "estimates," "projects," "intends," "believes," "guidance," and
similar expressions that do not relate to historical matters. These
forward-looking statements are subject to risks and uncertainties which
can cause actual results to differ materially from those currently
anticipated, due to a number of factors which include, but are not
limited to, downturns in economic and market conditions, particularly
levels of spending in the business, travel and leisure industries;
hostilities, including future terrorist attacks, or fear of hostilities
that affect travel; risks related to natural disasters, such as
earthquakes and hurricanes; risks associated with the acquisition,
development and integration of properties; the seasonal nature of the
hospitality business; changes in the tastes of our customers; increases
in real property tax rates; increases in interest rates and operating
costs; the impact of any material litigation; the loss of key members of
our senior management; general volatility of the capital markets and our
ability to access the capital markets; and changes in the competitive
environment in our industry and the markets where we invest, and other
risk factors discussed in MHG's Annual Report on Form 10-K for the
fiscal year ended December 31, 2008, and other documents filed by MHG
with the Securities and Exchange Commission from time to time. All
forward-looking statements in this press release are made as of the date
hereof, based upon information known to management as of the date
hereof, and MHG assumes no obligations to update or revise any of its
forward-looking statements even if experience or future changes show
that indicated results or events will not be realized.

SOURCE: Morgans Hotel Group Co.

Morgans Hotel Group 
Jennifer Foley, 212-277-4166 
Vice President of Public Relations 
jennifer.foley@morganshotelgroup.com

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