Morgans Hotel Group (MHG) is a hospitality company that owns & operates boutique hotels,

as well as acquiring and redeveloping in the United States and Europe.

Headquarters

475 Tenth Avenue

New York, NY,
United States

Among the hotel chains/brands belonging to the Morgans Hotel Group

are Delano, Mondrian, Hudson, and A Morgans Original.
MHG owns or partially owns and manages thirteen hotels in London, Los
Angeles, Miami, Las Vegas, New York and San Francisco comprising over 3,000 rooms.
Each of its hotels was designed by a worldrenowned designer.
The company is generally credited with inventing the Boutique Hotel in 1984 when it
opened Morgans Hotel in New York.
MHG Hotels

New York

Morgans Hotel- style designed by Andree Putman

Royalton Hotel- style designed by Phillipe Starck

Hudson Hotel

Mondrian Hotel

South Beach

Delano Hotel

Mondrian Hotel- style designed by Marcel Wanders

Shore Club Hotel

Los Angeles

Mondrian Hotel-style designed by Benjamin Noriega Oritz

Las Vegas

Delano Las Vegas

San Francisco

Clift
London

St Martins Lane Hotel

Sanderson Hotel

Mondrian London at Sea Containers

Success Story
Since the 2013 annual meeting, MHG have made significant progress on a number of critical
initiatives that have strengthened the company and laid the groundwork for value creation
going forward. They significantly strengthened their balance sheet, which has resulted in

increased liquidity and flexibility. In February 2014, they refinanced their $180 million
mortgage loan secured by Hudson New York and their $100 million revolving credit facility
secured by Delano South Beach, replacing these obligations with nonrecourse mortgage
and mezzanine loans at attractive rates. These facilities were carefully structured to maintain
flexibility while taking advantage of accommodative capital markets.
Their financial performance has improved, as 2013 adjusted EBITDA nearly doubled over
2012 levels, reaching more than $45 million. RevPAR for system-wide comparable hotels
increased more than 8% in 2013 over last year, primarily driven by a 7.8% increase in
occupancy. At Hudson, a non-comparable hotel, they completed a $33 million renovation
project in 2013, which included the addition of 32 rooms. With all newly renovated rooms
and two new food and beverage venues, adjusted EBITDA at Hudson grew by approximately
$10 million in 2013 and they expect it to continue to ramp up in 2014. Given the size of this
asset, and its relative contribution to
their portfolio, they believe there has been large value creation at the company level from the
repositioning of this asset alone.
Additionally, as part of an extensive review of the Companys operations, the Boards
company took the difficult but necessary steps in order to right size their cost structure and
reduce corporate overhead costs allocated to property owners. These actions are expected
to achieve annualized savings of approximately $10 million, which include corporate
expenses and expenses allocated to the Companys owned, joint venture and managed
hotels, based on 2013 incurred costs and targeted compensation levels.
With a stronger balance sheet and improved financial and cost structure, they now have the
runway to continue to successfully execute on our property management and asset-light
strategy. We are keenly focused on efficiently managing their portfolio properties and
securing new long-term management agreements in attractive domestic and international
markets. The operating leverage that comes with growing their management fee and
licensing income, while continuing to right size their already meaningfully reduced overhead
costs, is significant. As of March 1, 2014 they have signed agreements for seven managed
hotels as well as license or franchise agreements for two additional hotels. The capital to
fund these projects has already been either funded or raised, and the incremental cash flow
from these openings will begin to appear in 2014. The Company also continues to enhance
the value of existing hotels and management agreements through targeted renovation and
expansion projects. These capital commitments have to meet or exceed well defined internal
return thresholds established by their new Board, and are assessed constantly. They have
also seen an increasing amount of interest in our brands, both domestically and abroad, with
opportunities to extend our flags to new developments and existing properties in major
gateway cities. This is a testament to our brand equity.
The progress we have made in less than a year is significant, and the value in our strategy
has been reflected not only in these achievements, but in the market as well. Today MHG
are a stronger, more efficient company with a more carefully honed strategy and a renewed
focus on building shareholder value.