FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
(Mark One)

[X]          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly period ended March 31, 1999

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________________  to  _______________________

                          Commission file number 0-9032

                    SONESTA INTERNATIONAL HOTELS CORPORATION
                    ----------------------------------------
             (Exact name of registrant as specified in its charter)

           NEW YORK                                      13-5648107           
----------------------------------            --------------------------------
  (State or other jurisdiction                        (I.R.S. Employer
of incorporation or organization)                    Identification No.)
                     200 Clarendon Street, Boston, MA 02116
--------------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)
                                  617-421-5400
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. 
Yes         No   X     (see Form 12b-25 filed June 30, 1997)
    -----      -----

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                  PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

         Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Section 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes         No   
    -----      -----  

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

                  Number of Shares of Common Stock Outstanding
                      as of May 7, 1999 -- $.80 par value,
                              Class A -- 2,068,215
<PAGE>

                                      Index

                    Sonesta International Hotels Corporation


                                                                     Page 
                                                                     ----
Part I. Financial Information

   Item 1. Financial Statements (Unaudited)

           Consolidated balance sheets - March 31, 1999                1
           and December 31, 1998

           Consolidated statements of operations - Three
           months ended March 31, 1999 and 1998                        3

           Consolidated statements of cash flows - Three
           months ended March 31, 1999 and 1998                        4

           Notes to consolidated financial statements -
           March 31, 1999 and 1998                                     6

Item 2.    Management's Discussion and Analysis of Results
           of Operations and Financial Condition - March 31,
           1999                                                       11

Item 3.    Quantitative and Qualitative Disclosure of Market
           Risk                                                       13


<PAGE>

                                                                       FORM 10-Q

                     Part I - Item 1. Financial Information
                     --------------------------------------

                    SONESTA INTERNATIONAL HOTELS CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                March 31, 1999 (Unaudited) and December 31, 1998

<TABLE>
<CAPTION>
                                                                             (in thousands)                 
                                                                             --------------                 
                                                                        March 31         December 31
                                                                          1999              1998  
                                                                      ------------      -------------

<S>                                                                     <C>               <C>     
ASSETS
Current assets:
  Cash and cash equivalents                                             $  4,296          $  9,470
  Accounts and notes receivables:
       Trade, less allowance of  $147
         ($141 at December 31, 1998) for doubtful accounts                 8,170             7,654
       Other                                                                 658               905
                                                                        --------          --------
                 Total accounts and notes receivable                       8,828             8,559
  Current portion of deferred taxes                                          357               347
  Inventories                                                              1,225             1,268
  Prepaid expenses                                                         1,896             1,384
                                                                        --------          --------

                  Total current assets                                    16,602            21,028

Long-term receivables and advances                                         2,147             2,535

Property and equipment, at cost:
   Land  and land improvements                                            10,014            10,014
   Buildings                                                              68,903            68,899
   Furniture and equipment                                                25,893            25,255
   Leasehold improvements                                                  2,489             2,464
   Projects in progress                                                    2,278             1,105
                                                                        --------          --------
                                                                         109,577           107,737
   Less accumulated depreciation and
       amortization                                                       27,551            25,789
                                                                        --------          --------
              Net property and equipment                                  82,026            81,948

Other long-term assets                                                     1,431             1,092
                                                                        --------          --------
                                                                        $102,206          $106,603
                                                                        ========          ========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       1

<PAGE>

                                                                       FORM 10-Q
                    SONESTA INTERNATIONAL HOTELS CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                March 31, 1999 (Unaudited) and December 31, 1998
                ------------------------------------------------
<TABLE>
<CAPTION>
                                                                             (in thousands)                 
                                                                             --------------                 
                                                                        March 31         December 31
                                                                          1999              1998  
                                                                      ------------      -------------

<S>                                                                     <C>               <C>     
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt and
          capitalized lease obligations                                 $  7,500          $   4,048
  Accounts payable                                                         3,904              6,179
  Advance deposits                                                         3,823              3,869
  Federal, foreign and state income taxes                                  1,305                383
  Accrued liabilities:
         Salaries and wages                                                1,592              2,569
         Rentals                                                           2,140              6,138
         Interest                                                            500                459
         Employee benefits                                                   480                468
         Other                                                             2,333              1,682
                                                                        --------          ---------

                  Total accrued liabilities                                7,045             11,316
                                                                        --------          ---------

                  Total current liabilities                               23,577             25,795
                                                                      
Long-term debt                                                            46,655             50,731
                                                                      
Deferred federal and state income taxes                                    3,338              3,403
                                                            
Other non-current liabilities                                              2,450              2,147

Redeemable preferred stock, $25 par value, at
    redemption value                                                         294                294

Commitments and contingencies

Common stockholders' equity:
    Common stock:
        Class A, $.80 par value:
        Authorized--10,000,000 shares
        Issued--3,051,088 shares at stated value                           3,488             3,488
    Retained earnings                                                     30,530            28,871
    Treasury shares--982,873, at cost                                     (8,126)           (8,126)
                                                                        --------          --------
              Total common stockholders' equity                           25,892            24,233
                                                                        --------          --------
                                                                        $102,206          $106,603
                                                                        ========          ========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       2

<PAGE>

                                                                       FORM 10-Q
                    SONESTA INTERNATIONAL HOTELS CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
                    (in thousands except for per share data)
<TABLE>
<CAPTION>
                                                                            Three Months Ended                 
                                                                      March 31,1999     March 31, 1998
                                                                      -------------     --------------
<S>                                                                     <C>               <C>     
Revenues:
     Rooms                                                              $ 17,228          $ 10,717
     Food and beverage                                                     6,249             4,082
     Management, license and
          service fees                                                     1,102             1,882
     Parking , telephone and other                                         2,051             1,327
                                                                        --------          --------
                                                                          26,630            18,008
                                                                        --------          --------
Costs and expenses:
     Costs and operating expenses                                         10,178             7,074
     Advertising and promotion                                             1,983             1,429
     Administrative and general                                            3,902             3,147
     Human resources                                                         502               383
     Maintenance                                                           1,685             1,304
     Rentals                                                               2,387             2,354
     Property taxes                                                          542               297
     Depreciation and amortization                                         1,762             1,228
                                                                        --------          --------
                                                                          22,941            17,216
                                                                        --------          --------
Operating income                                                           3,689               792

Other income (deductions):
     Interest expense                                                     (1,215)             (725)
     Interest income                                                         152               323
     Foreign exchange loss                                                    (4)               (1)
     Gain on sales of assets                                                   4                14
                                                                        --------          --------
                                                                          (1,063)             (389)

Income before income taxes                                                 2,626               403
Federal, foreign and state income tax provision                              964               267
                                                                        --------          --------
Net income                                                                 1,662               136
Retained earnings at beginning of period                                  28,871            28,087
Cash dividends on preferred stock                                             (3)               (3)
                                                                        --------          --------
Retained earnings at end of period                                      $ 30,530          $ 28,220
                                                                        ========          ========

Basic earnings per share of common stock                                $    .80          $    .06
                                                                        ========          ========

Weighted average number of shares
     outstanding                                                           2,068             2,068
                                                                        ========          ========
</TABLE>


See accompanying notes to consolidated financial statements.

                                       3

<PAGE>

                                                                       FORM 10-Q
                    SONESTA INTERNATIONAL HOTELS CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
                           Increase (Decrease) in Cash
<TABLE>
<CAPTION>
                                                                              (in thousands)                 
                                                                              --------------                 
                                                                         Three Months Ended March 31
                                                                           1999              1998
                                                                      -------------     --------------
<S>                                                                       <C>               <C>     
Cash provided (used) by operating activities
     Net income                                                           $1,662            $   136
Items not (providing) requiring cash                                                       
      Pension expense                                                        308                153
      Depreciation and amortization                                        1,762              1,228
      Other amortization                                                    (134)                22
      Deferred federal income tax provision (benefit)                        (75)                12
      Gain on sales of assets                                                 (4)               (14)
                                                                                           
Changes in assets and liabilities                                                          
      Accounts and notes receivable                                         (396)              (301)
      Inventories                                                             43                (13)
      Prepaid expenses                                                      (512)              (383)
      Accounts payable                                                    (1,962)            (2,284)
      Advance deposits                                                       (46)               257
      Federal, foreign and state income taxes                                922                 96
      Accrued liabilities                                                 (4,271)            (3,351)
                                                                          ------            -------
      Cash used by operating activities                                   (2,703)            (4,442)
                                                                                           
Cash provided (used) by investing activities                                               
     Proceeds from sales of assets                                             4                 14
     Expenditures for property and equipment                              (2,060)            (1,907)
     Payments received on long-term receivables                                            
       and advances                                                          375              1,126
                                                                          ------            -------
     Cash used by investing activities                                    (1,681)              (767)
                                                                                           
Cash provided (used) by financing activities                                               
     Changes in notes payable                                               --                  640
     Payments on long-term debt                                             (477)              (191)
     Payments on capitalized lease obligations                              --                  (15)
     Cash dividends paid                                                    (313)              (313)
                                                                          ------            -------
          Cash provided (used) by financing activities                      (790)               121
                                                                                           
                                                                                           
Net decrease in cash                                                      (5,174)            (5,088)
Cash and cash equivalents at beginning of period                           9,470              5,581
                                                                          ------            -------
Cash and cash equivalents at end of period                                $4,296            $   493
                                                                          ======            =======
</TABLE>                                                                       

                                       4

<PAGE>
                                                                       FORM 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited) (continued)


      Supplemental Schedule of Interest and Income Taxes Paid
      -------------------------------------------------------


      Cash paid for interest in the 1999 three-month period and the 1998
      three-month period was approximately $1,174,000 and $712,000,
      respectively. Cash paid for income taxes in the 1999 three-month period
      and the 1998 three-month period was approximately $117,000 and $159,000,
      respectively.


See accompanying notes to consolidated financial statements.


<PAGE>

                                                                       FORM 10-Q

SONESTA INTERNATIONAL HOTELS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       Basis of Presentation and Operations

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 1999
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1999.

The balance sheet at December 31, 1998 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.

For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1998.

Included in the results from operations for the quarter ended March 31, 1999 are
the revenues and expenses from Sonesta Beach Resort Key Biscayne, which the
Company acquired on July 1, 1998. Before the acquisition, the Company operated
the hotel under a management agreement.

2.       Long-Term Receivables and Advances
<TABLE>
<CAPTION>

                                                                  (in thousands)         
                                                          -----------------------------
                                                         March 31,            December 31, 
                                                           1999                   1998
                                                     -----------------      -----------------
<S>                                                             <C>                    <C>   
Sharm El Sheikh (a)                                             $1,000                 $1,000
Cairo, Egypt, net of discount (b)                                  315                    708
Other                                                            1,262                  1,174
                                                     -----------------      -----------------
        Total long-term receivables                              2,577                  2,882
        Less:  current portion                                     430                    347
                                                     -----------------      -----------------
        Net long-term receivables                               $2,147                 $2,535
                                                     =================      =================
</TABLE>


(a)      This loan to the owner of the Sonesta Beach Resort, Sharm El Sheikh
         bears interest at the prime rate (7 3/4% at March 31, 1999) with
         repayment in seven annual installments of $142,857, together with
         interest, commencing January 1, 1999.

(b)      The remaining balance of this loan, made in February 1997 to the owner
         of the Sonesta Hotel Cairo, will be repaid with a final payment of
         $340,000 on March 1, 2000. There is no interest due during the term of
         the loan.


                                       6

<PAGE>

                                                                       FORM 10-Q

SONESTA INTERNATIONAL HOTELS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.       Borrowing Arrangements

The Company has a $2,000,000 line of credit which expires on September 30, 1999.
This line of credit bears interest at the prime rate (7 3/4% at March 31, 1999).
The terms of the line require a certain minimum net worth, a minimum amount of
unrestricted cash or available credit lines during part of each calendar year,
and approval for additional borrowings by the Company. No amount was outstanding
under this line at March 31, 1999.

A subsidiary of the Company has a $5,000,000 line of credit which will expire
December 31, 2000. The terms of the loan require certain minimum levels of
earnings and net worth, limit cash dividends and purchases of the Company's
stock, and specify a maximum defined debt to net worth ratio. The loan is
secured by the Company's leasehold interest in the Royal Sonesta Hotel New
Orleans, and by a Company guaranty. The interest rate is prime (7 3/4% at March
31, 1999) less one-eighth percent, and the commitment fee on the unused portion
of the line is .65% per annum. No amount was outstanding under this line at
March 31, 1999.


4.       Long-Term Debt
<TABLE>
<CAPTION>
                                                                            (in thousands)
                                                        -------------------------------------------------------
                                                            March 31,                           December 31,
                                                               1999                                 1998
                                                        ------------------                  -------------------
<S>                                                                <C>                                  <C>    
Charterhouse of Cambridge Trust and Sonesta of
  Massachusetts Inc.:
  First mortgage note (a)                                          $21,810                              $21,937
Sonesta Beach Resort Limited
  Partnership:
  First mortgage note (b)                                           23,703                               23,859
Sonesta Hotels of Anguilla, Ltd:
  First mortgage note (c)                                            5,440                                5,790
  Note from Seller (d)                                                 800                                  800
Sonesta Curacao Hotel Corporation, N.V.:
  Bank term loan (e)                                                 2,000                                2,000
Other                                                                  402                                  393
                                                        ------------------                  -------------------
                                                                    54,155                               54,779
Less current portion of long-term debt                               7,500                                4,048
                                                        ------------------                  -------------------
Total long-term debt                                               $46,655                              $50,731
                                                        ==================                  ===================
</TABLE>


                                       7

<PAGE>

                                                                       FORM 10-Q


SONESTA INTERNATIONAL HOTELS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(a)      This loan is secured by a first mortgage on the Royal Sonesta Hotel
         Boston (Cambridge) property. This property is included in fixed assets
         at a net book value of approximately $25,043,000 at March 31, 1999. The
         interest rate on the loan is 8.86% for the term of the loan, and
         monthly payments for interest and principal are $203,802. The mortgage
         loan matures in December 2003, and no prepayments are allowed until
         January 2000.

(b)      This loan is secured by a first mortgage on the Sonesta Beach Resort
         Key Biscayne property, which is included in fixed assets at a net book
         value of approximately $36,015,000 at March 31, 1999. The principal
         balance of this loan is $22,431,000. The Company recorded an additional
         liability in 1998 when it assumed the loan to reflect the fair market
         value of this liability based on its above market interest rate. This
         additional liability is being amortized as an adjustment to interest
         expense over the remaining life of the loan. The loan requires monthly
         interest payments based on a rate of 11.78% until March 1, 1999, and
         12.78% from March 1, 1999 until the maturity date, which is October 1,
         2000. Additional interest will become due in case the loan is not
         repaid on the scheduled maturity date. No provision for such payment is
         included in the accompanying consolidated balance sheets. No principal
         payments are due during the term of the loan.

(c)      The loan is secured by a first mortgage on the Sonesta Beach Resort
         Anguilla property, and an assignment to the lender of the hotel's
         furniture, fixtures and equipment. The property is included in fixed
         assets at a book value of $13,116,000 at March 31, 1999. In addition,
         an amount of $1,900,000 is secured by a Company guaranty. The loan
         requires minimum principal payments of $375,000, $3,965,000 and
         $1,100,000 in the years 1999, 2000 and 2001, respectively. In addition,
         principal payments are required equal to 25% of the hotel's annual
         excess cash flow, as defined. The interest rate on the loan is LIBOR
         plus 2 1/4 percentage points. The interest rate at March 31, 1999 was
         7.2%.

(d)      This loan from the Seller of the Sonesta Beach Resort Anguilla was for
         a three year period ending November 28, 1998. The interest rate is 8%
         per annum. The Company has reduced this loan by $200,000 to which it is
         entitled under the agreements with the Seller, and has further rights
         to offset certain receivables from the Seller from this loan. The
         Company did not repay this loan on the maturity date, pending
         resolution of certain outstanding legal issues with the Seller of the
         resort. The Company has since resolved these issues and will repay this
         loan in the second quarter of 1999.

(e)      This loan matured on June 30, 1998, but was extended through June 30,
         1999. No principal payments are required. The interest rate was 9 3/4%
         at March 31, 1999, and is subject to periodic review by the bank. The
         loan is secured by a Company guaranty, and by an assignment of the
         right to receive fees under the management agreement for the Sonesta
         Beach Hotel & Casino, Curacao.


                                       8

<PAGE>

                                                                       FORM 10-Q

SONESTA INTERNATIONAL HOTELS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.       Hotel Costs and Operating Expenses

Hotel costs and operating expenses in the accompanying Consolidated Statements
of Operations are summarized below:

<TABLE>
<CAPTION>
                                                                               (in thousands)                 
                                                                               --------------                 
                                                                         Three Months Ended March 31
                                                                           1999              1998
                                                                      -------------     --------------
<S>                                                                       <C>               <C>     
Direct departmental costs
     Rooms                                                                 $3,530           $2,442
     Food and beverage                                                      4,934            3,305
     Heat, light and power                                                    727              602
     Other                                                                    987              725
                                                                          -------           ------
                                                                          $10,178           $7,074
                                                                          =======           ======
</TABLE>


Direct departmental costs include payroll expenses and related payroll burden,
the cost of food and beverage consumed and other departmental costs.


6.       Federal, Foreign and State Income Tax

The provision for income taxes in the accompanying Consolidated Statements of
Operations is summarized below:

<TABLE>
<CAPTION>
                                                                               (in thousands)                 
                                                                               --------------                 
                                                                         Three Months Ended March 31
                                                                           1999              1998
                                                                      -------------     --------------
<S>                                                                       <C>               <C>     
Deferred federal income tax provision (benefit)                           $  (75)           $   12
Current federal income tax provision                                       1,072                64
Current foreign income tax provision                                          10               135
Current state income tax provision (benefit)                                 (43)               56
                                                                          ------            ------
                                                                          $  964            $  267
                                                                          ======            ======
</TABLE>


                                       9

<PAGE>

                                                                       FORM 10-Q

SONESTA INTERNATIONAL HOTELS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.       Segment Information

Segment information for the Company's two reportable segments, Owned & Leased
Hotels and Management Activities for the three month periods ending March 31,
1999 and 1998 follows:

Period ended March 31, 1999
<TABLE>
<CAPTION>

                                                                       (in thousands)
                                                        -----------------------------------------------         
                                                        Owned &
                                                        Leased          Management
                                                        Hotels          Activities         Consolidated
                                                        -------        ------------        ------------
<S>                                                     <C>              <C>                 <C>    
Revenues                                                $25,515          $1,115              $26,630
Operating income (loss) before                                                               
     depreciation and amortization expense                5,736            (285)               5,451
    Depreciation and amortization                        (1,657)           (105)              (1,762)
    Interest income (expense), net                       (1,137)             74               (1,063)
    Other income                                             --              --                   --
                                                         --------        --------            ---------
Segment pre-tax profit (loss)                             2,942            (316)               2,626

Segment assets                                           92,308           9,898              102,206
Segment capital additions                                 1,949             111                2,060
</TABLE>

Period ended March 31, 1998
<TABLE>
<CAPTION>

                                                                       (in thousands)
                                                        -----------------------------------------------           
                                                        Owned &
                                                        Leased          Management
                                                        Hotels          Activities         Consolidated
                                                        -------        ------------        ------------
<S>                                                     <C>              <C>                 <C>    
Revenues                                                $15,997          $2,011              $18,008
Operating income before                                                                        
     depreciation and amortization expense                1,972              48                2,020
    Depreciation and amortization                        (1,115)           (113)              (1,228)
    Interest income (expense), net                         (650)            248                 (402)
    Other income                                             --              13                   13
                                                        ---------        ------              -------
Segment pre-tax profit                                      207             196                  403
                                                    
Segment assets                                           51,279          20,232               71,511
Segment capital additions                                 1,710             197                1,907
</TABLE>
                                                    
                                                    
                                       10

<PAGE>

                                                                       FORM 10-Q
                                 Part I - Item 2
                                 ---------------


MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS 
AND FINANCIAL CONDITION


FIRST QUARTER 1999 COMPARED TO 1998
-----------------------------------

REVENUES
--------
<TABLE>
<CAPTION>

                                                                    TOTAL REVENUES
                                                                    (in thousands)
                                                        --------------------------------------------
                                                          NO. OF
                                                          ROOMS            1999             1998
                                                          -----            ----             ----
<S>                                                        <C>        <C>               <C>     
Sonesta Beach Resort Anguilla, BWI                         100        $   1,979         $  1,704
Sonesta Beach Resort Key Biscayne                          300            9,361             --
Royal Sonesta Hotel Boston (Cambridge)                     400            4,668            5,013
Royal Sonesta Hotel New Orleans                            500            9,507            9,280
Management and service fees and other revenues                            1,115            2,011
                                                                      ---------           ------
        Total revenues                                                $  26,630         $ 18,008
                                                                      =========           ======
</TABLE>
                                                                             

Total revenues for the first quarter ended March 31, 1999 were $26,630,000
compared to $18,008,000 in 1998, an increase of approximately $8,622,000.

The first quarter of 1999 included the revenues of Sonesta Beach Resort Key
Biscayne, which the Company acquired on July 1, 1998. Revenues of this resort
during the 1999 first quarter were $9,361,000, compared to revenues of
$8,615,000 during the first quarter of 1998, when the hotel was operated by the
Company under a management agreement. The increase in revenues of $746,000 was
primarily the result of an 8% increase in the average room rate achieved at the
resort. The Company's Sonesta Beach Resort Anguilla had an increase in revenues
of $275,000 in the first quarter of 1999 compared to 1998, due to a 10% increase
in room revenue per available room ("REVPAR"), and increased revenues from the
hotel's retail shops, which the Company operates. First quarter 1999 revenues at
the Royal Sonesta Hotel New Orleans increased by $227,000, primarily due to an
increase of 3% in the hotel's average room rate. The Royal Sonesta Hotel Boston
(Cambridge) first quarter revenues decreased by $345,000 compared to the first
quarter of 1998. This was caused by lower rooms and banquet revenues as a result
of a decrease in the group and convention business during the first quarter of
1999 compared to the same period in 1998. Revenues from management activities
and other sources decreased by $896,000 in the first quarter of 1999 compared to
1998. The 1998 revenues included a one time fee of $335,000 in connection with
the cancellation of a license agreement for a hotel in Santiago, Chile. The 1998
revenues also included fee income of $381,000 from Sonesta Beach Resort Key
Bicayne, which was operated by the Company under a management agreement until
its acquisition by the Company on July 1, 1998.


                                       11

<PAGE>

                                                                       FORM 10-Q


MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS 
AND FINANCIAL CONDITION (CONTINUED)


OPERATING INCOME
----------------
<TABLE>
<CAPTION>

                                                                      OPERATING INCOME
                                                                       (in thousands)
                                                            -------------------------------------
                                                                  1999                1998
                                                                  ----                ----
<S>                                                              <C>                 <C>  
Sonesta Beach Resort Anguilla, BWI                               $   364             $  79
Sonesta Beach Resort Key Biscayne                                  3,224                --
Royal Sonesta Hotel Boston (Cambridge)                              (320)              (23)
Royal Sonesta Hotel New Orleans                                      811               801
                                                                 -------             -----
Operating income from hotels after
    management and service fees                                    4,079               857
Management activities and other                                     (390)              (65)
                                                                 -------             -----
         Operating income                                        $ 3,689             $ 792
                                                                 =======             =====
</TABLE>

Operating income for the three-month period ending March 31, 1999 was
$3,689,000, compared to operating income of $792,000 in 1998, an increase of
approximately $2,897,000.

Included in the 1999 first quarter operating income is income of $3,224,000 from
Sonesta Beach Resort Key Biscayne, which the Company acquired on July 1, 1998.
The first quarter of the year is the hotel's most profitable quarter, and this
result is, therefore, not indicative of the result of a full year of operations.
Operating income at the Sonesta Beach Resort Anguilla increased by $285,000 in
the first quarter of 1999 compared to the previous year's quarter, due to
increased revenues during the quarter of $275,000, and a decrease of $10,000 in
expenses. The first quarter operating loss at the Royal Sonesta Hotel Boston
(Cambridge) increased by $297,000 in 1999 compared to 1998, due to a decrease in
revenues of $345,000, partially offset by a decrease in expenses of $48,000.
Royal Sonesta New Orleans had a slight increase in operating income of $10,000,
due to an increase in revenues of $227,000, which was offset by a modest 3%
increase in expenses of $217,000. Operating loss from management and other
activities, which is computed after giving effect to management, marketing and
service fees to the Company's owned and leased hotels, increased by $325,000 in
1999 compared to 1998. The 1998 loss included a one-time fee payment of $335,000
in connection with the cancellation of a license agreement for a hotel in
Santiago, Chile.


OTHER INCOME (DEDUCTIONS)
-------------------------


Interest expense increased from $725,000 in the first quarter of 1998 to
$1,215,000 in the 1999 first quarter, due to interest expense of $531,000 on
indebtedness related to the Sonesta Beach Resort Key Biscayne, which was
acquired by the Company on July 1, 1998. Interest income decreased by $171,000
in the first quarter of 1999 compared to the same period in 1998, mainly due to
interest of $138,000 included in the 1998 first quarter from receivables due
from the previous owner of Sonesta Beach Resort Key Biscayne. These receivables
were settled when the Company acquired the hotel on July 1, 1998.


                                       12

<PAGE>

                                                                       FORM 10-Q


MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS 
AND FINANCIAL CONDITION (CONTINUED)


FEDERAL, FOREIGN AND STATE INCOME TAXES
---------------------------------------


The provision for income taxes for the first quarter of 1999 was higher than the
statutory rate due to state taxes provided on the Company's profits from its
operations in Louisiana and Florida.


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------


The Company had cash and cash equivalents of approximately $4,296,000 at March
31, 1999. The Company also has $7,000,000 available under two lines of credit,
and no amounts were oustanding under these lines at March 31, 1999.

The Company had a working capital deficit of approximately $6,975,000 at March
31, 1999. Included in current liabilities is $4,165,000 which is due on or
before March 1, 2000 on the Company's mortgage on the Anguilla hotel. The
Company expects to refinance, or to seek alternative financing, for this loan.
Also included in current liabilities is a loan of $2,000,000 related to the
Sonesta Beach Hotel & Casino Curacao. The Company expects to repay this loan
with the proceeds of a termination fee which the Company is entitled to receive
upon the termination of its management agreement, which is expected to happen in
the second quarter of 1999. The Company believes that its present cash balances,
plus available borrowing capacity and the expected cash flow generated during
the remainder of the calendar year 1999, will be more than adequate to meet all
of its obligations.


YEAR 2000 COMPLIANCE
--------------------

The Company continues to address issues related to the Year 2000. Updated action
plans from each property were obtained during the first quarter, and are being
reviewed by corporate Information Systems and Financial Managers. A new property
management computer system was implemented at the Sonesta Beach Resort Bermuda
during the first quarter. Year 2000 compliance and contingency planning will
also be an agenda item during Company wide management meetings for Financial and
Information Systems Managers and General Managers to be held during the month of
May 1999. Management believes that its compliance program and its contingency
plans under development will reduce the possibility of major interruptions of
normal operations.

                                 PART I - Item 3
                                 ---------------

QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

The Company is exposed to market risk from changes in interest rates and foreign
exchange rates. The Company uses fixed rate debt and debt with variable interest
rates to finance the ownership of its properties.


                                       13

<PAGE>

                           PART II - Other Information
                           ---------------------------


Item Numbers 1, 2, 3, 4, 5 
-------------------------- 


Not applicable during the quarter ended March 31, 1999.


Item 6
------

No exhibits or reports on form 8-K were filed during the three months ended
March 31, 1999.


                                       14


<PAGE>

                                                                       FORM 10-Q





                                    SIGNATURE


          Pursuant to the requirements of the Securities Exchange Act
          of 1934, the Registrant has duly caused this Report to be
          signed on its behalf by the undersigned thereunto duly
          authorized.


               SONESTA INTERNATIONAL HOTELS CORPORATION


               By: /s/
                   ---------------------------------------------
                   Boy van Riel
                   Vice President and Treasurer

               (Authorized to sign on behalf of the Registrant as Principal
               Financial Officer)

                DATE:  May 7, 1999


                                       15