----

----

| S      | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE |   |
|--------|---------------------------------------------------------------|--------|
|   | SECURITIES      EXCHANGE ACT OF 1934                          |   |
|   | For      the Quarterly period ended March 31, 2010            |   |
|   |                                                          |   |
|   | OR                                                            |   |

|  | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE |   |
|----------|----------------------------------------------------------------|--------|
|     | SECURITIES      EXCHANGE ACT OF 1934                           |   |

| For      the transition period from |   | to |   |
|-------------------------------------|--------|----|--------|

| NEW YORK                                                            |   | 13-5648107                                |
|---------------------------------------------------------------------|--------|-------------------------------------------|
| (State      or other jurisdiction or incorporation or organization) |   | (I.R.S.      Employer Identification No.) |

|  617-421-5400                                              |
|-----------------------------------------------------------------|
| (Registrant’s      telephone number, including area code) |
|                                                            |
| (Former      name, former address and former fiscal year,       |
| if      changed since last report)                              |

| Yes      S | No       |
|------------|------------------|

| Yes       | No      S |
|-------------------|-----------|

----

Table of Contents

INDEX

| Part I.  Financial Information | Page                                                                                                                                                                                                                                                                                                                                                                                 |
|------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Item 1.                                  | Financial Statements (unaudited)                                                                                                                                                                                                                                                                                                                                                     |   |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                     | Condensed consolidated balance sheets — March 31, 2010      (unaudited) and December 31, 2009                                                                                                                                                                                                                                                                                  | 1 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                     | Condensed consolidated statements of operations —      Three-month periods ended March 31, 2010 and 2009      (unaudited)                                                                                                                                                                                                                                                      | 3 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                     | Condensed consolidated statements of cash flows — Three-month      periods ended March 31, 2010 and 2009 (unaudited)                                                                                                                                                                                                                                                           | 4 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                     | Notes to condensed consolidated financial statements — March      31, 2010 and 2009                                                                                                                                                                                                                                                                                            | 5 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Item 2.                                  | Management’s Discussion and Analysis of Results of      Operations and Financial Condition — March 31, 2010                                                                                                                                                                                                                                                              | 12 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Item  3.                       | Quantitative and Qualitative Disclosure of Market      Risk                                                                                                                                                                                                                                                                                                                          | 16 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Item  4.                       | Internal Controls and Procedures                                                                                                                                                                                                                                                                                                                                                     | 17 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Part II.  Other Information    |                                                                                                                                                                                                                                                                                                                                                                                 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                     | Signature page                                                                                                                                                                                                                                                                                                                                                                       | 19 |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Exhibits 10.26                           | Amendment      to partnership agreement of SBR-Fortune Associates, LLLP, dated as of June      18, 2009.  This agreement was previously filed with our report      on Form 10-Q on August 13, 2009 but certain portions were omitted pursuant      to a request for confidential treatment at that time.  The      attached is a complete copy of the agreement. |   |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Exhibits      31.(a), 31.(b), 31.(c)     | Certifications      by the Company’s Chief Executive Officers and Vice President and      Treasurer, as required by Rule 13a-14(a)/15d-14(a) of the Securities      Exchange Act of 1934, as amended.                                                                                                                                                                          |   |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                 |   |
| Exhibit 32                               | Certification      by Company Officers required by 18 U.S.C. Section 1350 (Section 906 of the      Sarbanes-Oxley Act of 2002).                                                                                                                                                                                                                                                      |   |

----

Table of Contents

PartI  -  Item 1.  FinancialInformation

|                                                                              |   | (in thousands) |   |
|-----------------------------------------------------------------------------------|--------|----------------|--------|
|                                                                              |   | March 31, 2010 |   |   | December 31, 2009 |   |
|                                                                              |   |           |   |   |   |   |
| ASSETS                                                                            |   |           |   |   |   |   |
| Current      assets:                                                              |   |           |   |   |   |   |
| Cash and cash      equivalents                                                    |   | $              | 26,441 |   |   | $ | 35,557 |   |
| Accounts and notes      receivable:                                               |   |           |   |   |   |   |   |   |
| Trade, less allowance of $74 ($70      at December 31, 2009) fordoubtful accounts |   |           | 5,010  |   |   |   | 5,092 |   |
| Other, including current      portion of long-term receivables andadvances        |   |           | 1,558  |   |   |   | 1,242 |   |
| Total accounts and notes      receivable                                          |   |           | 6,568  |   |   |   | 6,334 |   |
| Inventories                                                                       |   |           | 603    |   |   |   | 623 |   |
| Current deferred tax      assets                                                  |   |           | 553    |   |   |   | 476 |   |
| Prepaid expenses and other      current assets                                    |   |           | 1,365  |   |   |   | 1,242 |   |
| Total current      assets                                                         |   |           | 35,530 |   |   |   | 44,232 |   |
|                                                                              |   |           |   |   |   |   |   |   |
| Restricted      cash                                                              |   |           | 5,000  |   |   |   | -- |   |
|                                                                              |   |           |   |   |   |   |   |   |
| Long-term      receivables and advances                                           |   |           | 1,529  |   |   |   | 1,354 |   |
|                                                                              |   |           |   |   |   |   |   |   |
| Property      and equipment, at cost:                                             |   |           |   |   |   |   |   |   |
| Land and land      improvements                                                   |   |           | 2,102  |   |   |   | 2,102 |   |
| Buildings                                                                         |   |           | 25,721 |   |   |   | 25,721 |   |
| Furniture and      equipment                                                      |   |           | 31,459 |   |   |   | 30,859 |   |
| Leasehold      improvements                                                       |   |           | 9,122  |   |   |   | 9,109 |   |
| Projects in    progress                                                           |   |           | --     |   |   |   | 64 |   |
|                                                                              |   |           | 68,404 |   |   |   | 67,855 |   |
| Less accumulated depreciation and      amortization                               |   |           | 34,927 |   |   |   | 33,585 |   |
| Net property and      equipment                                                   |   |           | 33,477 |   |   |   | 34,270 |   |
|                                                                              |   |           |   |   |   |   |   |   |
| Other      long-term assets                                                       |   |           | 1,352  |   |   |   | 875 |   |
|                                                                              |   | $              | 76,888 |   |   | $ | 80,731 |   |

----

Table of Contents

|                                             |   | (in thousands) |    |
|--------------------------------------------------|--------|----------------|---------|
|                                             |   | March 31, 2010 |    |   | December 31, 2009 |   |
|                                             |   |           |    |   |   |   |
|                                             |   |           |    |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY  |   |           |    |   |   |   |
| Current      liabilities:                        |   |           |    |   |   |   |
| Current portion of long-term      debt           |   | $              | 536     |   |   | $ | 594 |   |
| Accounts payable                                 |   |           | 2,866   |   |   |   | 2,887 |   |
| Advance deposits                                 |   |           | 1,292   |   |   |   | 1,103 |   |
| Accrued income    taxes                          |   |           | 562     |   |   |   | 327 |   |
| Accrued    liabilities:                          |   |           |    |   |   |   |   |   |
| Salaries and    wages                            |   |           | 1,169   |   |   |   | 1,278 |   |
| Rentals                                          |   |           | 1,023   |   |   |   | 3,741 |   |
| Interest                                         |   |           | 176     |   |   |   | 236 |   |
| Pension and other employee      benefits         |   |           | 2,463   |   |   |   | 2,064 |   |
| Interest rate    swap                            |   |           | 742     |   |   |   | -- |   |
| Other                                            |   |           | 1,400   |   |   |   | 1,028 |   |
|                                             |   |           | 6,973   |   |   |   | 8,347 |   |
| Total current      liabilities                   |   |           | 12,229  |   |   |   | 13,258 |   |
|                                             |   |           |    |   |   |   |   |   |
| Long-term      debt                              |   |           | 31,464  |   |   |   | 31,245 |   |
|                                             |   |           |    |   |   |   |   |   |
| Pension      liability, non-current              |   |           | 6,195   |   |   |   | 6,554 |   |
|                                             |   |           |    |   |   |   |   |   |
|                                             |   |           |    |   |   |   |   |   |
| Other      non-current liabilities               |   |           | 992     |   |   |   | 1,082 |   |
|                                             |   |           |    |   |   |   |   |   |
| Deferred      tax liabilities                    |   |           | 1,017   |   |   |   | 1,939 |   |
|                                             |   |           |    |   |   |   |   |   |
| Commitments      and contingencies               |   |           |    |   |   |   |   |   |
|                                             |   |           |    |   |   |   |   |   |
|                                             |   |           |    |   |   |   |   |   |
| Stockholders’      equity:                 |   |           |    |   |   |   |   |   |
| Common stock:                                    |   |           |    |   |   |   |   |   |
| Class A,  $.80 par      value          |   |           |    |   |   |   |   |   |
| Authorized--10,000      shares                   |   |           |    |   |   |   |   |   |
| Issued – 6,102 shares at stated      value |   |           | 4,882   |   |   |   | 4,882 |   |
| Retainedearnings                                 |   |           | 34,542  |   |   |   | 35,734 |   |
| Treasury shares – 2,404, at      cost      |   |           | (12,053 | ) |   |   | (12,053 | ) |
| Accumulated other comprehensive      loss        |   |           | (2,380  | ) |   |   | (1,910 | ) |
| Total      stockholders’ equity            |   |           | 24,991  |   |   |   | 26,653 |   |
|                                             |   | $              | 76,888  |   |   | $ | 80,731 |   |

----

Table of Contents

SONESTA 

|                                                       |   | Three Months EndedMarch 31 |   |
|------------------------------------------------------------|--------|----------------------------|--------|
|                                                       |   |                       |   |   |   |   |
|                                                       |   | 2010                       |   |   | 2009 |   |
| Revenues:                                                  |   |                       |   |   |   |   |
| Rooms                                                      |   | $                          | 8,190  |   |   | $ | 7,419 |   |
| Food      and beverage                                     |   |                       | 4,114  |   |   |   | 3,477 |   |
| Management,      license and service fees                  |   |                       | 1,399  |   |   |   | 1,126 |   |
| Parking,      telephone and other                          |   |                       | 1,059  |   |   |   | 1,081 |   |
|                                                       |   |                       | 14,762 |   |   |   | 13,103 |   |
| Other revenues from managed and      affiliated properties |   |                       | 1,370  |   |   |   | 1,221 |   |
| Total      revenues                                        |   |                       | 16,132 |   |   |   | 14,324 |   |
|                                                       |   |                       |   |   |   |   |   |   |
| Costs      and expenses:                                   |   |                       |   |   |   |   |   |   |
| Costs      and operating expenses                          |   |                       | 7,313  |   |   |   | 6,585 |   |
| Advertising      and promotion                             |   |                       | 1,562  |   |   |   | 1,376 |   |
| Administrative      and general                            |   |                       | 3,075  |   |   |   | 3,211 |   |
| Human      resources                                       |   |                       | 280    |   |   |   | 251 |   |
| Maintenance                                                |   |                       | 878    |   |   |   | 846 |   |
| Rentals                                                    |   |                       | 1,145  |   |   |   | 1,525 |   |
| Property      taxes                                        |   |                       | 280    |   |   |   | 354 |   |
| Depreciation      and amortization                         |   |                       | 1,380  |   |   |   | 1,355 |   |
|                                                       |   |                       | 15,913 |   |   |   | 15,503 |   |
| Other expenses from managed and      affiliated properties |   |                       | 1,370  |   |   |   | 1,221 |   |
| Total      costs and expenses                              |   |                       | 17,283 |   |   |   | 16,724 |   |
|                                                       |   |                       |   |   |   |   |   |   |
|                                                       |   |                       |   |   |   |   |   |   |
| Operating      loss                                        |   |                       | (1,151 | ) |   |   | (2,400 | ) |
|                                                       |   |                       |   |   |   |   |   |   |
| Other      income (deductions):                            |   |                       |   |   |   |   |   |   |
| Interest      expense                                      |   |                       | (567   | ) |   |   | (716 | ) |
| Interest      income                                       |   |                       | 60     |   |   |   | 123 |   |
| Foreign      exchange loss                                 |   |                       | (5     | ) |   |   | (11 | ) |
| Gain      (loss) on sales of assets                        |   |                       | (4     | ) |   |   | 2 |   |
|                                                       |   |                       | (516   | ) |   |   | (602 | ) |
|                                                       |   |                       |   |   |   |   |   |   |
| Loss      before income tax benefit                        |   |                       | (1,667 | ) |   |   | (3,002 | ) |
| Income      tax benefit                                    |   |                       | (475   | ) |   |   | (790 | ) |
| Net      loss                                              |   |                       | (1,192 | ) |   |   | (2,212 | ) |
|                                                       |   |                       |   |   |   |   |   |   |
| Cash      dividends                                        |   |                       | --     |   |   |   | -- |   |
| Retained      earnings at beginning of period              |   |                       | 35,734 |   |   |   | 14,155 |   |
| Retained      earnings at end of period                    |   | $                          | 34,542 |   |   | $ | 11,943 |   |
|                                                       |   |                       |   |   |   |   |   |   |
| Net      loss per share of common stock                    |   | $                          | (0.32  | ) |   | $ | (0.60 | ) |
|                                                       |   |                       |   |   |   |   |   |   |
| Weighted      average number of shares outstanding         |   |                       | 3,698  |   |   |   | 3,698 |   |

----

Table of Contents

SONESTA 

|                                                                                  |   | (in      thousands)              |    |
|---------------------------------------------------------------------------------------|--------|----------------------------------|---------|
|                                                                                  |   | Three      Months Ended March 31 |    |
|                                                                                  |   | 2010                             |    |   | 2009 |   |
| Cash      used for operating activities                                               |   |                             |    |   |   |   |
| Net      loss                                                                         |   | $                                | (1,192  | ) |   | $ | (2,212 | ) |
| Adjustments      to reconcile net loss to net cash used for operating      activities |   |                             |    |   |   |   |   |   |
| Depreciation      and amortization of property and equipment                          |   |                             | 1,380   |   |   |   | 1,355 |   |
| Other      amortization                                                               |   |                             | 35      |   |   |   | 23 |   |
| Deferred      federal and state tax benefit                                           |   |                             | (726    | ) |   |   | (934 | ) |
| Loss      (gain) on sales of assets                                                   |   |                             | 4       |   |   |   | (2 | ) |
|                                                                                  |   |                             |    |   |   |   |   |   |
| Changes      in assets and liabilities                                                |   |                             |    |   |   |   |   |   |
| Restricted      cash                                                                  |   |                             | --      |   |   |   | 158 |   |
| Accounts      and notes receivable                                                    |   |                             | 33      |   |   |   | 613 |   |
| Inventories                                                                           |   |                             | 20      |   |   |   | 78 |   |
| Prepaid      expenses and other                                                       |   |                             | (39     | ) |   |   | (160 | ) |
| Accounts      payable                                                                 |   |                             | (21     | ) |   |   | (186 | ) |
| Advance      deposits                                                                 |   |                             | 189     |   |   |   | 286 |   |
| Federal,      foreign and state income taxes                                          |   |                             | 200     |   |   |   | 118 |   |
| Accrued      liabilities                                                              |   |                             | (2,565  | ) |   |   | (4,292 | ) |
| Cash      used for operating activities                                               |   |                             | (2,682  | ) |   |   | (5,155 | ) |
|                                                                                  |   |                             |    |   |   |   |   |   |
| Cash      used for investing activities                                               |   |                             |    |   |   |   |   |   |
| Expenditures      for property and equipment                                          |   |                             | (585    | ) |   |   | (1,847 | ) |
| Payments      received on long-term receivables and advances                          |   |                             | 340     |   |   |   | 69 |   |
| Investment      in development partnership                                            |   |                             | --      |   |   |   | (842 | ) |
| Proceeds      from sales of assets                                                    |   |                             | 7       |   |   |   | 33 |   |
| New      loans and advances                                                           |   |                             | (958    | ) |   |   | (36 | ) |
| Cash      used for investing activities                                               |   |                             | (1,196  | ) |   |   | (2,623 | ) |
| Cash      used for financing activities                                               |   |                             |    |   |   |   |   |   |
| Proceeds      from issuance of long-term debt                                         |   |                             | 32,000  |   |   |   | -- |   |
| Cost      of financing                                                                |   |                             | (399    | ) |   |   | -- |   |
| Payments      on refinancing of long-term debt                                        |   |                             | (31,644 | ) |   |   | -- |   |
| Restricted      cash                                                                  |   |                             | (5,000  | ) |   |   | -- |   |
| Scheduled      payments on long term debt                                             |   |                             | (195    | ) |   |   | (291 | ) |
| Cash      dividends paid                                                              |   |                             | --      |   |   |   | (925 | ) |
| Cash used for financing      activities                                               |   |                             | (5,238  | ) |   |   | (1,216 | ) |
|                                                                                  |   |                             |    |   |   |   |   |   |
| Net      decrease in cash                                                             |   |                             | (9,116  | ) |   |   | (8,994 | ) |
| Cash      and cash equivalents at beginning of period                                 |   |                             | 35,557  |   |   |   | 37,463 |   |
| Cash      and cash equivalents at end of period                                       |   | $                                | 26,441  |   |   | $ | 28,469 |   |

|   | Supplemental Schedule      of Interest and Income TaxesPaid |
|--------|-------------------------------------------------------------|

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Table of Contents

SONESTA 

| 1. | Basis of      Presentation |
|----|----------------------------|

| 2. | Long-Term Receivables      and Advances |
|----|-----------------------------------------|

|                                          |   | (in      thousands) |   |
|-----------------------------------------------|--------|---------------------|--------|
|                                          |   | March 31,2010       |   |   | December 31,2009 |   |
| Sharm      El Sheikh, Egypt (a)               |   | $                   | 869    |   |   | $ | 940 |   |
| Sharm      El Sheikh, Egypt (b)               |   |                | 475    |   |   |   | -- |   |
| Luxor,      Egypt (c)                         |   |                | 1,089  |   |   |   | 1,311 |   |
| St.      Maarten, Netherlands Antilles (d)    |   |                | 284    |   |   |   | -- |   |
| Other                                         |   |                | 199    |   |   |   | 215 |   |
| Total long-term receivables and      advances |   |                | 2,916  |   |   |   | 2,466 |   |
| Less:  current      portion         |   |                | 1,387  |   |   |   | 1,112 |   |
| Net long-term receivables and      advances   |   | $                   | 1,529  |   |   | $ | 1,354 |   |

| (a) | This      loan was made in January 2008 to the owners of Sonesta Beach Hotel Sharm      El Sheikh and Sonesta Club Sharm El Sheikh by converting receivables for      fees and expenses into a five-year loan, payable in monthly installments,      starting in January 2008.  The Company is accounting for this      loan using an effective interest rate of 6.5%.  Monthly payments      of $28,820 on this loan are paid directly from the hotels and deducted      from distributions of profits to the owner of these managed      hotels. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | This      loan, in the original amount of $500,000, was made in January 2010 to the      owner of Sonesta Beach Resort Sharm El Sheikh.  The interest      rate is 5.25%, and the loan has a three year term.  Monthly      payments of principal and interest of $15,075 commenced in February      2010. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c) | These      loans, in the original amount of $1,363,000, were made in August 2009 to      the owner of Sonesta St. George Hotel Luxor and Sonesta St. George I      Cruise Ship, which are both managed by the Company.  The loans      consist of cash advances of $500,000, and the conversion of receivables      for fees and expenses due to the Company totaling $863,000.  The      Company made these loans to assist the owner with the financing of      improvements to the Sonesta St. George Hotel Luxor, which included      additional guest rooms and meeting/function space.  The interest      rate is 5.25%, and monthly payments of interest and principal commenced in      November 2009.  The last payment is due October      2011. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| (d) | In      February 2010, the Company agreed to loan up to $1,000,000 to the owners      of two hotels in St. Maarten, to which the Company licenses the use of its      name.  At the same time, the license agreements for these hotels      were extended until December 2019, with a mutual cancellation option      beginning in May 2015.  The proceeds will be used to fund      improvements at both of the properties.  The Company expects to      fund the entire loan amount in 2010.  The loans shall be repaid      in 10 annual payments of $100,000, the first of which will be due on March      31, 2011.  Interest is due quarterly and will be based on LIBOR      plus a surcharge based on increases in room revenues from year to      year.  The maximum surcharge is 1.5% per annum.  The      Company is accounting for this loan using an effective interest rate of 6%      and has discounted the loan accordingly.  The discount has been      recorded as an other long-term asset and is amortized over the remaining      term of the license agreements. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Borrowing      Arrangements |
|----|-----------------------------|

| 4. | Hotel Costs and      Operating Expenses |
|----|-----------------------------------------|

|                           |   | (in thousands)                   |   |
|--------------------------------|--------|----------------------------------|--------|
|                           |   | Three      Months Ended March 31 |   |
|                           |   | 2010                             |   |   | 2009 |   |
| Direct      departmental costs |   |                             |   |   |   |   |
| Rooms                          |   | $                                | 2,435  |   |   | $ | 2,156 |   |
| Food      and beverage         |   |                             | 3,610  |   |   |   | 3,152 |   |
| Heat,      light and power     |   |                             | 618    |   |   |   | 662 |   |
| Other                          |   |                             | 650    |   |   |   | 615 |   |
|                           |   | $                                | 7,313  |   |   | $ | 6,585 |   |

----

Table of Contents

| 5. | Segment      Information |
|----|--------------------------|

|                                                                      |   | (in      thousands)           |   |
|---------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                      |   | Owned      &Leased Hotels |   |   | ManagementActivities |   |   | Consolidated |   |
|                                                                      |   |                          |   |   |   |   |   |   |   |
| Revenues                                                                  |   | $                             | 13,359 |   |   | $ | 1,403 |   |   | $ | 14,762 |   |
| Other      revenues from managed and                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| affiliated    properties                                                  |   |                          | --     |   |   |   | 1,370 |   |   |   | 1,370 |   |
| Total      revenues                                                       |   |                          | 13,359 |   |   |   | 2,773 |   |   |   | 16,132 |   |
| Operating      income (loss) before depreciation and amortization expense |   |                          | 1,044  |   |   |   | (815 | ) |   |   | 229 |   |
| Depreciation      and amortization                                        |   |                          | (1,313 | ) |   |   | (67 | ) |   |   | (1,380 | ) |
| Interest      income (expense), net                                       |   |                          | (564   | ) |   |   | 57 |   |   |   | (507 | ) |
| Other      deductions                                                     |   |                          | --     |   |   |   | (9 | ) |   |   | (9 | ) |
| Segment      pre-tax loss                                                 |   |                          | (833   | ) |   |   | (834 | ) |   |   | (1,667 | ) |
|                                                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| Segment      assets                                                       |   |                          | 42,996 |   |   |   | 33,892 |   |   |   | 76,888 |   |
| Segment      capital additions                                            |   |                          | 509    |   |   |   | 76 |   |   |   | 585 |   |

|                                                                  |   | (in      thousands)           |   |
|-----------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                  |   | Owned      &Leased Hotels |   |   | ManagementActivities |   |   | Consolidated |   |
|                                                                  |   |                          |   |   |   |   |   |   |   |
| Revenues                                                              |   | $                             | 11,970 |   |   | $ | 1,133 |   |   | $ | 13,103 |   |
| Other      revenues from managed and                                  |   |                          |   |   |   |   |   |   |   |   |   |   |
| affiliated    properties                                              |   |                          | --     |   |   |   | 1,221 |   |   |   | 1,221 |   |
| Total      revenues                                                   |   |                          | 11,970 |   |   |   | 2,354 |   |   |   | 14,324 |   |
| Operating      loss before depreciation and amortization expense |   |                          | (24    | ) |   |   | (1,021 | ) |   |   | (1,045 | ) |
| Depreciation      and amortization                                    |   |                          | (1,290 | ) |   |   | (65 | ) |   |   | (1,355 | ) |
| Interest      income (expense), net                                   |   |                          | (713   | ) |   |   | 120 |   |   |   | (593 | ) |
| Other      deductions                                                 |   |                          | --     |   |   |   | (9 | ) |   |   | (9 | ) |
| Segment      pre-tax loss                                             |   |                          | (2,027 | ) |   |   | (975 | ) |   |   | (3,002 | ) |
|                                                                  |   |                          |   |   |   |   |   |   |   |   |   |   |
| Segment      assets                                                   |   |                          | 74,111 |   |   |   | 45,418 |   |   |   | 119,529 |   |
| Segment      capital additions                                        |   |                          | 1,799  |   |   |   | 48 |   |   |   | 1,847 |   |

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| 6. | Comprehensive Income      (Loss) |
|----|----------------------------------|

|                                                           |   | (in      thousands)              |   |
|----------------------------------------------------------------|--------|----------------------------------|--------|
|                                                           |   | Three      Months ended March 31 |   |
|                                                           |   | 2010                             |   |   | 2009 |   |
|                                                           |   |                             |   |   |   |   |
| Net      Loss                                                  |   | $                                | (1,192 | ) |   | $ | (2,212 | ) |
|                                                           |   |                             |   |   |   |   |   |   |
| Unrealized      loss on interest rate swap, net of tax of $272 |   | $                                | (470   | ) |   | $ | -- |   |
|                                                           |   |                             |   |   |   |   |   |   |
| Comprehensive      loss                                        |   | $                                | (1,662 | ) |   | $ | (2,212 | ) |

| 7. | Earnings (Loss) per      Share |
|----|--------------------------------|

|                                               |   | Three      months endedMarch      31 |   |
|----------------------------------------------------|--------|--------------------------------------|--------|
|                                               |   | 2010                                 |   |   | 2009 |   |
| Numerator:                                         |   |                                 |   |   |   |   |
| Loss      from operations                          |   | $                                    | (1,192 | ) |   | $ | (2,212 | ) |
|                                               |   |                                 |   |   |   |   |   |   |
| Denominator:                                       |   |                                 |   |   |   |   |   |   |
| Weighted      average number of shares outstanding |   |                                 | 3,698  |   |   |   | 3,698 |   |
|                                               |   |                                 |   |   |   |   |   |   |
| Loss      per share of common stock                |   | $                                    | (0.32  | ) |   | $ | (0.60 | ) |

| 8. | Pension      Plan |
|----|-------------------|

|                                                                       |   | (in      thousands)              |   |
|----------------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                       |   | Three      Months ended March 31 |   |
|                                                                       |   | 2010                             |   |   | 2009 |   |
|                                                                       |   |                             |   |   |   |   |
| Service      cost                                                          |   | $                                | --     |   |   | $ | 21 |   |
| Interest      cost                                                         |   |                             | 405    |   |   |   | 408 |   |
| Expected      return on assets                                             |   |                             | (414   | ) |   |   | (429 | ) |
| Recognized      actuarial loss                                             |   |                             | 41     |   |   |   | 23 |   |
| Net      expense included in the consolidatedstatements of      operations |   | $                                | 32     |   |   | $ | 23 |   |

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| 9. | Derivative Financial      Instruments |
|----|---------------------------------------|

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|                                                     |   | (in      thousands)        |   |
|----------------------------------------------------------|--------|----------------------------|--------|
|                                                     |   | Liability      Derivatives |   |
|                                                     |   | 2010                       |   |
| Derivatives      designated as hedging instruments:      |   |                       |   |
| Interest      rate swap – cash flow hedge          |   | $                          | 742    |   |
| Total      derivatives designated as hedging instruments |   | $                          | 742    |   |
|                                                     |   |                       |   |   |
| Derivatives      not designated as hedging instruments:  |   | $                          | --     |   |
|                                                     |   |                       |   |   |
| Total      derivatives                                   |   | $                          | 742    |   |

|                                                |   | Pre-tax      Loss Recognized in OCI on Derivative (Effective Portion) |   |                                                                  |                  | Amount      Reclassified from Accumulated OCI into Income |   |
|-----------------------------------------------------|--------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------|-----------------------|-----------------------------------------------------------|--------|
| Derivatives      in Cash Flow Hedging Relationships |   | 2010                                                                  |   | Location      of Amount Reclassified from Accumulated OCI into Income |                  | 2010                                                      |   |
|                                                |   |                                                                  |   |                                                                  |                  |                                                      |   |
| Interest      rate swap                             |   | $                                                                     | (742   | )                                                                     | Interest      expense |                                                      | $      | -- |   |
|                                                |   |                                                                  |   |                                                                  |                  |                                                      | __     |   |
| Total                                               |   | $                                                                     | (742   | )                                                                     | Total                 |                                                      | $      | -- |   |

| 10. | Fair Value      Measurements |
|-----|------------------------------|

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|                    |   | (in      thousands)                                       |   |
|-------------------------|--------|-----------------------------------------------------------|--------|
|                    |   | Quoted      Prices in Active Markets for Identical Assets |   |   | Significant      Observable Inputs |   |   | Significant      Unobservable Inputs |   |   |   |   |
|                    |   | (Level      1)                                            |   |   | (Level      2) |   |   | (Level      3) |   |   | Total |   |
|                    |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Interest      rate swap |   | $                                                         | --     |   |   | $ | (742 | ) |   | $ |   -- |   |   | $ | (742 | ) |

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Part I – Item 2

|                                                                                     |   | TOTAL      REVENUES(in      thousands) |   |
|------------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                     |   | NO.      OFROOMS                       |   |   | 2010 |   |   | 2009 |   |
| Royal      Sonesta Hotel Boston                                                          |   |                                   | 400    |   |   | $ | 3,728 |   |   | $ | 3,350 |   |
| Royal      Sonesta Hotel New Orleans                                                     |   |                                   | 500    |   |   |   | 9,631 |   |   |   | 8,620 |   |
| Management      and service fees and other revenues                                      |   |                                   |   |   |   |   | 1,403 |   |   |   | 1,133 |   |
| Total      revenues, excluding other revenues frommanaged and affiliated      properties |   |                                   |   |   |   | $ | 14,762 |   |   | $ | 13,103 |   |

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|                                                              |   | OPERATING      INCOME (LOSS)(in      thousands) |   |
|-------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                              |   | 2010                                            |   |   | 2009 |   |
| Royal      Sonesta Hotel Boston                                   |   | $                                               | (1,405 | ) |   | $ | (1,513 | ) |
| Royal      Sonesta Hotel New Orleans                              |   |                                            | 1,137  |   |   |   | 199 |   |
| Operating      loss from hotels after management and service fees |   |                                            | (268   | ) |   |   | (1,314 | ) |
| Management      activities and other                              |   |                                            | (883   | ) |   |   | (1,086 | ) |
| Operating      loss                                               |   | $                                               | (1,151 | ) |   | $ | (2,400 | ) |

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PART I –Item 3

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PART I – Item4

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PART II –Other Information

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SIGNATURE

|   | SONESTA      INTERNATIONAL HOTELS CORPORATION |
|--------|-----------------------------------------------|
|   |                                          |   |
|   |                                          |   |
|   | By:                                           | /s/      Boy van Riel |
|   |                                          | Boy      van Riel |
|   |                                          | Vice      President and Treasurer |
|   |                                          |   |
|   |                                          | (Authorized      to sign on behalf of the Registrant as Principal Financial      Officer) |
|   |                                          |   |
|   | Date:      May 13, 2010                       |

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