----

----

**FORM      10-Q**

**SECURITIES      AND EXCHANGE COMMISSION**

| x      | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE |   |
|--------|-------------------------------------------------------------------------|--------|
|   | SECURITIES                EXCHANGE ACT OF 1934                          |   |
|   | For                the Quarterly period ended March 31, 2006            |   |
|   |                                                                    |   |
|   | OR                                                                      |   |

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

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

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

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

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

| Yes                x | No                o |
|----------------------|---------------------|

| Yes                o | No                x |
|----------------------|---------------------|

----

**INDEX**

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

| Part                I. Financial Information | **Page**                                                                                                                                                         |
|----------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                         |                                                                                                                                                             |   |
| Item                1.                       | Financial                Statements (unaudited)                                                                                                                  |   |
|                                         |                                                                                                                                                             |   |
|                                         | Condensed                consolidated balance sheets— March 31,                2006 (unaudited) and December 31, 2005                                      |   1 |
|                                         |                                                                                                                                                             |   |
|                                         | Condensed                consolidated statements of                operations—Three-month periods ended March 31, 2006 and 2005                (unaudited) |   3 |
|                                         |                                                                                                                                                             |   |
|                                         | Condensed                consolidated statements of cash                flows—Three-month periods ended March 31, 2006 and 2005                (unaudited) |   4 |
|                                         |                                                                                                                                                             |   |
|                                         | Notes                to condensed consolidated financial statements—March                31, 2006 and 2005                                                 |  6 |
|                                         |                                                                                                                                                             |   |
| Item                2.                       | Management’s                Discussion and Analysis of Results of                Operations and Financial Condition—March 31, 2006                   |   12 |
|                                         |                                                                                                                                                             |   |
| Item                3.                       | Quantitative                and Qualitative Disclosure of Market                Risk                                                                             |  15 |
|                                         |                                                                                                                                                             |   |
| Item                4.                       | Internal                Controls and                Procedures                                                                                                   | 16 |
|                                         |                                                                                                                                                             |   |
| Part                II. Other Information    |                                                                                                                                                             |
|                                         |                                                                                                                                                             |   |
|                                         | Signature                page                                                                                                                                    | 18 |
|                                         |                                                                                                                                                             |   |
| Exhibits                31.1, 31.2, 31.3     | Certifications                by the Company’s Chief Executive Officers                and Vice President and Treasurer                                    |  19 |
|                                         |                                                                                                                                                             |   |
| Exhibit                99.1                  | 18                U.S.C. Section 1350 Certification by Company                Officers                                                                           |  22 |

----

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

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                         |   | (in                thousands) |    |
|--------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                                                         |   | March                312006   |    | December                312005 |   |
|                                                                                                         |   |                          |    |   |   |
| ASSETS                                                                                                       |   |                          |    |   |   |   |   |
| Current                assets:                                                                               |   |                          |    |   |   |   |   |
| Cash                and cash equivalents                                                                     |   | $                             | 22,581  |   | $ | 24,941 |   |
| Restricted                cash                                                                               |   |                          | --      |   |   | 267 |   |
| Accounts                and notes receivable:                                                                |   |                          |    |   |   |   |   |
| Trade,                less allowance of $101 ($94 at December 31, 2005) for doubtful                accounts |   |                          | 8,721   |   |   | 8,821 |   |
| Other,                including current portion of long-term receivables and                advances         |   |                          | 1,426   |   |   | 3,634 |   |
| Total                accounts and notes receivable                                                           |   |                          | 10,147  |   |   | 12,455 |   |
| Inventories                                                                                                  |   |                          | 1,067   |   |   | 1,156 |   |
| Current                deferred tax assets                                                                   |   |                          | 456     |   |   | 456 |   |
| Refundable                income taxes                                                                       |   |                          | 593     |   |   | 883 |   |
| Prepaid                expenses and other current assets                                                     |   |                          | 1,601   |   |   | 1,784 |   |
|                                                                                                         |   |                          |    |   |   |   |   |
| Total                current assets                                                                          |   |                          | 36,445  |   |   | 41,942 |   |
|                                                                                                         |   |                          |    |   |   |   |   |
| Long-term                receivables and advances                                                            |   |                          | 8,335   |   |   | 7,520 |   |
|                                                                                                         |   |                          |    |   |   |   |   |
| Deferred                tax assets                                                                           |   |                          | 6,280   |   |   | 6,077 |   |
|                                                                                                         |   |                          |    |   |   |   |   |
| Property                and equipment, at cost:                                                              |   |                          |    |   |   |   |   |
| Land                and land improvements                                                                    |   |                          | 9,102   |   |   | 9,102 |   |
| Buildings                                                                                                    |   |                          | 57,895  |   |   | 57,895 |   |
| Furniture                and equipment                                                                       |   |                          | 40,849  |   |   | 38,555 |   |
| Leasehold                improvements                                                                        |   |                          | 7,564   |   |   | 7,486 |   |
| Projects                in progress                                                                          |   |                          | 1,071   |   |   | 538 |   |
|                                                                                                         |   |                          | 116,481 |   |   | 113,576 |   |
|                                                                                                         |   |                          |    |   |   |   |   |
| Less:                accumulated depreciation and amortization                                               |   |                          | 43,201  |   |   | 40,777 |   |
| Net                property and equipment                                                                    |   |                          | 73,280  |   |   | 72,799 |   |
|                                                                                                         |   |                          |    |   |   |   |   |
| Other                long-term assets                                                                        |   |                          | 2,242   |   |   | 2,281 |   |
|                                                                                                         |   | $                             | 126,582 |   | $ | 130,619 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                             |   | (in                thousands) |    |
|------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                             |   | March                312006   |    | December                312005 |   |
|                                                             |   |                          |    |   |   |
|                                                             |   |                          |    |   |   |
| LIABILITIES                AND COMMON STOCKHOLDERS’ EQUITY |   |                          |    |   |   |   |   |
| Current                liabilities:                              |   |                          |    |   |   |   |   |
| Accounts                payable                                  |   | $                             | 3,440   |   | $ | 4,935 |   |
| Advance                deposits                                  |   |                          | 1,837   |   |   | 2,126 |   |
| Accrued                income taxes                              |   |                          | 981     |   |   | 1,160 |   |
| Accrued                liabilities:                              |   |                          |    |   |   |   |   |
| Salaries                and wages                                |   |                          | 1,388   |   |   | 1,277 |   |
| Rentals                                                          |   |                          | 2,209   |   |   | 6,176 |   |
| Interest                                                         |   |                          | 559     |   |   | 252 |   |
| Pension                and other employee benefits               |   |                          | 1,280   |   |   | 788 |   |
| Other                                                            |   |                          | 2,673   |   |   | 1,773 |   |
|                                                             |   |                          |    |   |   |   |   |
| Total                accrued liabilities                         |   |                          | 8,109   |   |   | 10,266 |   |
|                                                             |   |                          |    |   |   |   |   |
| Total                current liabilities                         |   |                          | 14,367  |   |   | 18,487 |   |
|                                                             |   |                          |    |   |   |   |   |
| Long-term                debt                                    |   |                          | 34,061  |   |   | 34,061 |   |
|                                                             |   |                          |    |   |   |   |   |
| Finance                obligation                                |   |                          | 59,728  |   |   | 59,728 |   |
|                                                             |   |                          |    |   |   |   |   |
| Other                non-current liabilities                     |   |                          | 6,551   |   |   | 6,478 |   |
|                                                             |   |                          |    |   |   |   |   |
|                                                             |   |                          |    |   |   |   |   |
| Commitments                and contingencies                     |   |                          |    |   |   |   |   |
|                                                             |   |                          |    |   |   |   |   |
| Common                stockholders’ equity:                |   |                          |    |   |   |   |   |
| Common                stock:                                     |   |                          |    |   |   |   |   |
| Class                A, $ 0.80 par value:                        |   |                          |    |   |   |   |   |
| Authorized                - 10,000 shares                        |   |                          |    |   |   |   |   |
| Issued—6,102                shares at stated value         |   |                          | 4,882   |   |   | 4,882 |   |
| Retained                earnings                                 |   |                          | 19,046  |   |   | 19,036 |   |
| Treasury                shares—2,404, at cost              |   |                          | (12,053 | ) |   | (12,053 | ) |
| Total                common stockholders’ equity           |   |                          | 11,875  |   |   | 11,865 |   |
|                                                             |   | $                             | 126,582 |   | $ | 130,619 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**SONESTA      INTERNATIONAL HOTELS      CORPORATION**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)**

|                                                               |   | Three                Months Ended March 31 |   |
|--------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                               |   | 2006                                       |   | 2005 |   |
| Revenues:                                                          |   |                                       |   |   |   |   |   |
| Rooms                                                              |   | $                                          | 14,871 |   | $ | 14,272 |   |
| Food                and beverage                                   |   |                                       | 5,428  |   |   | 6,667 |   |
| Management,                license and service fees                |   |                                       | 1,397  |   |   | 1,715 |   |
| Parking,                telephone and other                        |   |                                       | 2,242  |   |   | 2,474 |   |
|                                                               |   |                                       | 23,938 |   |   | 25,128 |   |
| Costs                and expenses:                                 |   |                                       |   |   |   |   |   |
| Costs                and operating expenses                        |   |                                       | 10,434 |   |   | 10,646 |   |
| Advertising                and promotion                           |   |                                       | 1,895  |   |   | 1,859 |   |
| Administrative                and general                          |   |                                       | 3,691  |   |   | 4,246 |   |
| Human                resources                                     |   |                                       | 399    |   |   | 402 |   |
| Maintenance                                                        |   |                                       | 1,394  |   |   | 1,395 |   |
| Rentals                                                            |   |                                       | 2,350  |   |   | 2,569 |   |
| Property                taxes                                      |   |                                       | 675    |   |   | 674 |   |
| Depreciation                and amortization                       |   |                                       | 2,509  |   |   | 1,988 |   |
|                                                               |   |                                       | 23,347 |   |   | 23,779 |   |
|                                                               |   |                                       |   |   |   |   |   |
| Operating                income                                    |   |                                       | 591    |   |   | 1,349 |   |
|                                                               |   |                                       |   |   |   |   |   |
| Other                income (deductions):                          |   |                                       |   |   |   |   |   |
| Interest                expense                                    |   |                                       | (743   | ) |   | (1,524 | ) |
| Interest                income                                     |   |                                       | 374    |   |   | 138 |   |
| Foreign                exchange gain (loss)                        |   |                                       | 6      |   |   | (10 | ) |
| Gain                on sales of assets                             |   |                                       | 4      |   |   | -- |   |
|                                                               |   |                                       | (359   | ) |   | (1,396 | ) |
|                                                               |   |                                       |   |   |   |   |   |
| Income                (loss) before income tax provision (benefit) |   |                                       | 232    |   |   | (47 | ) |
| Income                tax provision (benefit)                      |   |                                       | 222    |   |   | (4,150 | ) |
| Net                income                                          |   |                                       | 10     |   |   | 4,103 |   |
|                                                               |   |                                       |   |   |   |   |   |
| Retained                earnings at beginning of period            |   |                                       | 19,036 |   |   | 18,435 |   |
| Retained                earnings at end of period                  |   | $                                          | 19,046 |   | $ | 22,538 |   |
|                                                               |   |                                       |   |   |   |   |   |
| Net                income per share of common stock                |   | $                                          | 0.003  |   | $ | 1.110 |   |
|                                                               |   |                                       |   |   |   |   |   |
| Weighted                average number of shares outstanding       |   |                                       | 3,698  |   |   | 3,698 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**SONESTA      INTERNATIONAL HOTELS      CORPORATION**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)**

|                                                                                                       |   |                  (in thousands)       |   |
|------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                       |   | Three                Months Ended March 31 |   |
|                                                                                                       |   | 2006                                       |   | 2005 |   |
| Cash                provided (used) by operating activities                                                |   |                                       |   |   |   |   |   |
| Net                income                                                                                  |   | $                                          | 10     |   | $ | 4,103 |   |
| Adjustments                to reconcile net income to net cash used by operating                activities |   |                                       |   |   |   |   |   |
| Pension                expense                                                                             |   |                                       | 585    |   |   | 603 |   |
| Depreciation                and amortization of property and equipment                                     |   |                                       | 2,509  |   |   | 1,988 |   |
| Other                amortization                                                                          |   |                                       | 10     |   |   | 23 |   |
| Deferred                federal and state tax benefit                                                      |   |                                       | (203   | ) |   | (4,600 | ) |
| Gain                on sales of assets                                                                     |   |                                       | (4     | ) |   | -- |   |
| Deferred                interest income                                                                    |   |                                       | --     |   |   | (72 | ) |
| Deferred                interest expense                                                                   |   |                                       | --     |   |   | 626 |   |
|                                                                                                       |   |                                       |   |   |   |   |   |
| Changes                in assets and liabilities                                                           |   |                                       |   |   |   |   |   |
| Restricted                cash                                                                             |   |                                       | 267    |   |   | 20 |   |
| Accounts                and notes receivable                                                               |   |                                       | 156    |   |   | (1,098 | ) |
| Inventories                                                                                                |   |                                       | 89     |   |   | 108 |   |
| Prepaid                expenses and other                                                                  |   |                                       | 183    |   |   | 17 |   |
| Accounts                payable                                                                            |   |                                       | (1,124 | ) |   | 586 |   |
| Advance                deposits                                                                            |   |                                       | (289   | ) |   | (411 | ) |
| Federal,                foreign and state income taxes                                                     |   |                                       | 111    |   |   | 234 |   |
| Accrued                liabilities                                                                         |   |                                       | (2,668 | ) |   | (4,202 | ) |
| Cash                used by operating activities                                                           |   |                                       | (368   | ) |   | (2,075 | ) |
|                                                                                                       |   |                                       |   |   |   |   |   |
| Cash                provided (used) by investing activities                                                |   |                                       |   |   |   |   |   |
| Expenditures                for property and equipment                                                     |   |                                       | (2,946 | ) |   | (1,131 | ) |
| Payments                received on long-term receivables and advances                                     |   |                                       | 2,678  |   |   | 476 |   |
| Proceeds                from sales of assets                                                               |   |                                       | 16     |   |   | -- |   |
| New                loans and advances                                                                      |   |                                       | (1,370 | ) |   | -- |   |
| Cash                used by investing activities                                                           |   |                                       | (1,622 | ) |   | (655 | ) |
| Cash                used by financing activities                                                           |   |                                       |   |   |   |   |   |
| Cash                dividends paid                                                                         |   |                                       | (370   | ) |   | -- |   |
| Cash                used by financing activities                                                           |   |                                       | (370   | ) |   | -- |   |
|                                                                                                       |   |                                       |   |   |   |   |   |
| Net                decrease in cash                                                                        |   |                                       | (2,360 | ) |   | (2,730 | ) |
| Cash                and cash equivalents at beginning of period                                            |   |                                       | 24,941 |   |   | 7,950 |   |
| Cash                and cash equivalents at end of period                                                  |   | $                                          | 22,581 |   | $ | 5,220 |   |

*See      accompanying notes to condensed consolidated financial      statements.*

----

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)      (continued)**

*See      accompanying notes to condensed consolidated financial      statements.*

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

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

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

|                                                        |   | (in                thousands) |   |
|-------------------------------------------------------------|--------|-------------------------------|--------|
|                                                        |   | March                31, 2006 |   | December                31, 2005 |   |
| Sharm                El Sheikh, Egypt (a)                   |   | $                             | 326    |   | $ | 391 |   |
| Sonesta                Hotel & Suites Coconut Grove (b) |   |                          | 4,969  |   |   | 5,003 |   |
| Trump                International Sonesta Beach Resort (c) |   |                          | 1,391  |   |   | 3,720 |   |
| Chateau                Sonesta Hotel New Orleans (d)        |   |                          | 1,895  |   |   | 1,025 |   |
| Other                                                       |   |                          | 993    |   |   | 740 |   |
| Total                long-term receivables                  |   |                          | 9,574  |   |   | 10,879 |   |
| Less:                current portion                        |   |                          | 1,239  |   |   | 3,359 |   |
| Net                long-term receivables                    |   | $                             | 8,335  |   | $ | 7,520 |   |

| (a) | This                loan, in the original amount of $1,000,000, was made in 1996 and                1997 to                the owner of the Sonesta Beach Resort, Sharm El Sheikh. The loan                bears                interest at the prime rate (7.75% at March 31, 2006) and is adjusted                semi-annually. Currently, the loan is being repaid with monthly payments                of $23,800. The loan matures in                2007. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | This                loan was made to the owner of the Sonesta Hotel & Suites Coconut                Grove, Miami, which opened in April 2002, to fund construction and                furniture, fixtures and equipment costs. The loan bears interest                at the                prime rate (7.75% at March 31, 2006) plus 0.75%. The loan is secured                by a                mortgage on the hotel property and is being repaid out of the hotel                profits that are available for distribution to the owner, and, to                the                extent the hotel’s earnings are insufficient to pay the owner certain                minimum annual returns and minimum annual target returns due under                the                management agreement, out of shortfalls funded by the Company. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

| (c) | This                amount represents advances made to the owner of Trump International                Sonesta Beach Resort Sunny Isles for the Company’s share of the losses of                the resort from the opening on April 1, 2003 through October 31,                2004                ($1,391,000). This amount was due pursuant to the terms of the management                agreement under which the Company operates the hotel. A separate                advance                for pre-opening expenses ($2,329,000) was repaid in January 2006.                No                interest is charged on the advance for losses, which will be repaid                out of                future available profits generated by the hotel, or will be settled                when                the Company closes on the purchase option it has for the hotel (see                Note 9                - Legal Proceedings). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d) | Following                Hurricane Katrina, which struck New Orleans in late August 2006,                the                Company advanced $1,895,000 to Chateau Sonesta Hotel New Orleans,                which it                operates under a long-term management agreement. These advances were                used                for the payment of ongoing expenses during the period the hotel was                closed                from August 29 to November 30, 2005, and to repair damage from Hurricane                Katrina. The hotel’s owner has filed claims under its building insurance                policy, which includes business interruption provisions, but the                amount                and the timing of the insurance recovery is uncertain. If insurance                proceeds are insufficient, the Company will recover these advances,                together with interest, out of first available income from the hotel.                The                interest rate on these advances ranges from prime (7.75% at March                31,                2006) plus one (1) to three (3) percentage                points. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

*Credit      Line*

*Long-Term      Debt*

|                                                                              |   | (in                thousands) |   |
|-----------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                              |   | March                31, 2006 |   | December                31, 2005 |   |
| Charterhouse                of Cambridge Trust and Sonesta of Massachusetts Inc.: |   |                          |   |   |   |   |   |
| First                mortgage note                                                |   | $                             | 34,061 |   | $ | 34,061 |   |
| Accrued                interest                                                   |   |                          | 559    |   |   | 106 |   |
|                                                                              |   |                          | 34,620 |   |   | 34,167 |   |
| Less                current portion of accrued interest                           |   |                          | (559   | ) |   | (106 | ) |
| Total                long-term debt                                               |   | $                             | 34,061 |   | $ | 34,061 |   |
|                                                                              |   |                          |   |   |   |   |   |

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

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

|                                     |   | (in                thousands)              |   |
|------------------------------------------|--------|--------------------------------------------|--------|
|                                     |   | Three                Months Ended March 31 |   |
|                                     |   | 2006                                       |   | 2005 |   |
| Direct                departmental costs |   |                                       |   |   |   |   |   |
| Rooms                                    |   | $                                          | 3,200  |   | $ | 3,411 |   |
| Food                and beverage         |   |                                       | 4,756  |   |   | 5,266 |   |
| Heat,                light and power     |   |                                       | 1,246  |   |   | 800 |   |
| Other                                    |   |                                       | 1,232  |   |   | 1,169 |   |
|                                     |   | $                                          | 10,434 |   | $ | 10,646 |   |

| **5.** | **Federal,                Foreign and State Income                Tax** |
|--------|-------------------------------------------------------------------------|

|                                                         |   | (in                thousands)              |   |
|--------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                         |   | Three                Months Ended March 31 |   |
|                                                         |   | 2006                                       |   | 2005 |   |
|                                                         |   |                                       |   |   |   |
| Current                federal income tax provision          |   | $                                          | 273    |   | $ | 276 |   |
| Current                foreign income tax provision          |   |                                       | 103    |   |   | 118 |   |
| Current                state income tax provision            |   |                                       | 49     |   |   | 56 |   |
| Deferred                state income tax provision (benefit) |   |                                       | 24     |   |   | (296 | ) |
| Deferred                federal income tax benefit           |   |                                       | (227   | ) |   | (4,304 | ) |
| Income                tax provision (benefit)                |   | $                                          | 222    |   | $ | (4,150 | ) |

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

| **6.** | **Segment                Information** |
|--------|----------------------------------------|

|                                                                                |   | (in                thousands)                          |   |
|-------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                                                |   | Owned                &Leased                Hotels |   | ManagementActivities |   |  Consolidated |   |
|                                                                                |   |                                                   |   |   |   |   |   |
| Revenues                                                                            |   | $                                                      | 22,523 |   | $ | 1,415 |   | $ | 23,938 |   |
| Operating                income (loss) before depreciation and amortization expense |   |                                                   | 3,523  |   |   | (423 | ) |   | 3,100 |   |
| Depreciation                and amortization                                        |   |                                                   | (2,385 | ) |   | (124 | ) |   | (2,509 | ) |
| Interest                income (expense), net                                       |   |                                                   | (732   | ) |   | 363 |   |   | (369 | ) |
| Other                income                                                         |   |                                                   | --     |   |   | 10 |   |   | 10 |   |
| Segment                pre-tax income (loss)                                        |   |                                                   | 406    |   |   | (174 | ) |   | 232 |   |
|                                                                                |   |                                                   |   |   |   |   |   |   |   |   |
| Segment                assets                                                       |   |                                                   | 80,460 |   |   | 46,122 |   |   | 126,582 |   |
| Segment                capital additions                                            |   |                                                   | 2,827  |   |   | 119 |   |   | 2,946 |   |
|                                                                                |   |                                                   |   |   |   |   |   |   |   |   |

|                                                                                |   | (in                thousands)                          |   |
|-------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                                                |   | Owned                &Leased                Hotels |   | ManagementActivities |   |  Consolidated |   |
|                                                                                |   |                                                   |   |   |   |   |   |
| Revenues                                                                            |   | $                                                      | 23,269 |   | $ | 1,859 |   | $ | 25,128 |   |
| Operating                income (loss) before depreciation and amortization expense |   |                                                   | 3,348  |   |   | (11 | ) |   | 3,337 |   |
| Depreciation                and amortization                                        |   |                                                   | (1,825 | ) |   | (163 | ) |   | (1,988 | ) |
| Interest                income (expense), net                                       |   |                                                   | (1,511 | ) |   | 125 |   |   | (1,386 | ) |
| Other                deductions                                                     |   |                                                   | --     |   |   | (10 | ) |   | (10 | ) |
| Segment                pre-tax income (loss)                                        |   |                                                   | 12     |   |   | (59 | ) |   | (47 | ) |
|                                                                                |   |                                                   |   |   |   |   |   |   |   |   |
| Segment                assets                                                       |   |                                                   | 84,563 |   |   | 26,966 |   |   | 111,529 |   |
| Segment                capital additions                                            |   |                                                   | 1,102  |   |   | 29 |   |   | 1,131 |   |

| **7.** | **Earnings                per Share** |
|--------|---------------------------------------|

|                                                         |   | Three                months ended March 31 |   |
|--------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                         |   | 2006                                       |   | 2005 |   |
| Numerator:                                                   |   |                                       |   |   |   |   |   |
| Income                from operations                        |   | $                                          | 10     |   | $ | 4,104 |   |
|                                                         |   |                                       |   |   |   |   |   |
| Denominator:                                                 |   |                                       |   |   |   |   |   |
| Weighted                average number of shares outstanding |   |                                       | 3,698  |   |   | 3,698 |   |
|                                                         |   |                                       |   |   |   |   |   |
| Net                income per share of common stock          |   | $                                          | .003   |   | $ | 1.110 |   |

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

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

|                                                                                                         |   | (in                thousands)              |   |
|--------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                         |   | Three                Months ended March 31 |   |
|                                                                                                         |   | 2006                                       |   | 2005 |   |
|                                                                                                         |   |                                       |   |   |   |
| Service                cost                                                                                  |   | $                                          | 449    |   | $ | 428 |   |
| Interest                cost                                                                                 |   |                                       | 484    |   |   | 493 |   |
| Expected                return on assets                                                                     |   |                                       | (419   | ) |   | (421 | ) |
| Amortization                of prior service cost                                                            |   |                                       | 22     |   |   | 24 |   |
| Amortization                of transition asset                                                              |   |                                       | (21    | ) |   | (23 | ) |
| Recognized                actuarial loss                                                                     |   |                                       | 163    |   |   | 127 |   |
| Total                plan benefit cost                                                                       |   |                                       | 678    |   |   | 628 |   |
| Less:                amounts charged to hotels operated under management                agreements           |   |                                       | (93    | ) |   | (25 | ) |
| Net                periodic benefit cost included in the consolidatedstatements                of operations |   | $                                          | 585    |   | $ | 603 |   |

| **9.** | **Legal                Proceedings** |
|--------|--------------------------------------|

*Trump      International Sonesta Beach Resort Sunny Isles*

----

**SONESTA      INTERNATIONAL HOTELS CORPORATION**

**NOTES      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)**

| **10.  ** | **Sonesta                Beach Resort Key                Biscayne** |
|---------------------|---------------------------------------------------------------------|

| **11.  ** | **Impact                of Recently Issued Accounting                Standards** |
|---------------------|----------------------------------------------------------------------------------|

----

**Part      I - Item 2**

**MANAGEMENT’S      DISCUSSION AND ANALYSIS**

**OF      RESULTS OF OPERATIONS AND FINANCIAL CONDITION**

**FIRST      QUARTER 2006 COMPARED TO 2005**

**REVENUES**

|                                                          |   | TOTAL                REVENUES(in                thousands) |   |
|---------------------------------------------------------------|--------|------------------------------------------------------------|--------|
|                                                          |   | NO.                OFROOMS                                 |   |  2006 |   |  2005 |   |
| Sonesta                Beach Resort Key Biscayne              |   |                                                       | 300    |   | $ | 9,594 |   | $ | 9,466 |   |
| Royal                Sonesta Hotel Boston (Cambridge)         |   |                                                       | 400    |   |   | 3,902 |   |   | 3,560 |   |
| Royal                Sonesta Hotel New Orleans                |   |                                                       | 500    |   |   | 9,028 |   |   | 10,243 |   |
| Management                and service fees and other revenues |   |                                                       |   |   |   | 1,414 |   |   | 1,859 |   |
| Total                revenues                                 |   |                                                       |   |   | $ | 23,938 |   | $ | 25,128 |   |

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS**

**OF      RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)**

**OPERATING      INCOME**

|                                                                          |   | OPERATING                INCOME (LOSS)(in                thousands) |   |
|-------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|                                                                          |   | 2006                                                                |   | 2005 |   |
| Sonesta                Beach Resort Key Biscayne                              |   | $                                                                   | 1,773  |   | $ | 2,247 |   |
| Royal                Sonesta Hotel Boston (Cambridge)                         |   |                                                                | (1,299 | ) |   | (1,413 | ) |
| Royal                Sonesta Hotel New Orleans                                |   |                                                                | 663    |   |   | 688 |   |
| Operating                income from hotels after management and service fees |   |                                                                | 1,137  |   |   | 1,522 |   |
| Management                activities and other                                |   |                                                                | (546   | ) |   | (173 | ) |
| Operating                income                                               |   | $                                                                   | 591    |   | $ | 1,349 |   |

**OTHER      INCOME (DEDUCTIONS)**

----

**MANAGEMENT’S      DISCUSSION AND ANALYSIS**

**OF      RESULTS OF OPERATIONS AND FINANCIAL CONDITION (Continued)**

**FEDERAL,      FOREIGN AND STATE INCOME TAXES**

**LIQUIDITY      AND CAPITAL RESOURCES**

----

**PART      I - Item 3**

**QUANTITATIVE      AND QUALITATIVE DISCLOSURE OF MARKET RISK**

|                                 |   | YEAR   |   |   |   |   |   |   |   |
|--------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                 |   | 2006   |   | 2007   |   | 2008   |   | 2009   |   | 2010 |   | Thereafter |   | Total |   | Fair                Value |   |
| Fixed                rate            |   | $      | --     |   | $      | --     |   | $      | 602    |   | $ | 665 |   | $ | 32,794 |   | $ | -0- |   | $ | 34,061 |   | $ | 36,499 |   |
| Average                interest rate |   |   | 8.6    | %      |   | 8.6    | %      |   | 8.6    | % |   | 8.6 | % |   | 8.6 | % |   | 8.6 | % |   |   |   |   |   |   |

----

**PART      I - Item 4**

**INTERNAL      CONTROLS AND PROCEDURES**

----

**PART      II - Other Information**

**Item      Numbers 1, 2, 3, 4, 5 and 6 **

----

**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 10, 2006                           |