----

----

| x      | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE |   |
|--------|---------------------------------------------------------------|--------|
|   | SECURITIES      EXCHANGE ACT OF 1934                          |   |
|   | For      the Quarterly period ended June 30, 2009             |   |
|   |                                                          |   |
|   | OR                                                            |   |

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

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

----

INDEX

| Part I.  Financial    Information | Page                                                                                                                                                                                                        |
|---------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |                                                                                                                                                                                                        |   |
| Item 1.                                     | Financial Statements (unaudited)                                                                                                                                                                            |   |
|                                        |                                                                                                                                                                                                        |   |
|                                        | Condensed consolidated balance sheets — June 30, 2009      (unaudited) and December 31, 2008                                                                                                          | 1 |
|                                        |                                                                                                                                                                                                        |   |
|                                        | Condensed consolidated statements of operations — Three      and six-month periods ended June 30, 2009 and 2008      (unaudited)                                                                      | 3 |
|                                        |                                                                                                                                                                                                        |   |
|                                        | Condensed consolidated statements of cash flows —      Six-month periods ended June 30, 2009 and 2008    (unaudited)                                                                                  | 4 |
|                                        |                                                                                                                                                                                                        |   |
|                                        | Notes to condensed consolidated financial statements — June      30, 2009 and 2008                                                                                                                    | 5 |
|                                        |                                                                                                                                                                                                        |   |
| Item 2.                                     | Management’s Discussion and Analysis of Results of      Operations and Financial Condition — June 30, 2009                                                                                      | 11 |
|                                        |                                                                                                                                                                                                        |   |
| Item 3.                                     | Quantitative and Qualitative Disclosure of Market      Risk                                                                                                                                                 | 17 |
|                                        |                                                                                                                                                                                                        |   |
| Item 4.                                     | Internal Controls and Procedures                                                                                                                                                                            | 18 |
|                                        |                                                                                                                                                                                                        |   |
| Part II.  Other Information            |                                                                                                                                                                                                        |   |
|                                        |                                                                                                                                                                                                        |   |
| Item 4.                                     | Submission of Matters to a vote of Security      Holders                                                                                                                                                    | 19 |
|                                        |                                                                                                                                                                                                        |   |
|                                        | Signature page                                                                                                                                                                                              | 20 |
|                                        |                                                                                                                                                                                                        |   |
| Exhibit      3.1                            | Certificate      of Incorporation, as amended to date                                                                                                                                                       |   |
|                                        |                                                                                                                                                                                                        |   |
| Exhibit      3.2                            | Certificate      of Incorporation, changes to Paragraph Third, Section F, Subparagraph 5,      marked copy                                                                                                  |   |
|                                        |                                                                                                                                                                                                        |   |
| Exhibit      10.26                          | Amendment      to partnership agreement of SBR-Fortune Associates, LLLP, dated as of June      18, 2009 (portions of this exhibit have been omitted pursuant to a request      for confidential treatment). |   |
|                                        |                                                                                                                                                                                                        |   |
| 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

CONDENSED

|                                                                              |   | (in thousands) |    |
|-----------------------------------------------------------------------------------|--------|----------------|---------|
|                                                                              |   | June 30, 2009  |    |   | December 31, 2008 |   |
|                                                                              |   |           |    |   |   |   |
| ASSETS                                                                            |   |           |    |   |   |   |
| Current      assets:                                                              |   |           |    |   |   |   |
| Cash and cash      equivalents                                                    |   | $              | 28,027  |   |   | $ | 37,463 |   |
| Restricted cash                                                                   |   |           | 124     |   |   |   | 175 |   |
| Accounts and notes      receivable:                                               |   |           |    |   |   |   |   |   |
| Trade, less allowance of $67 ($59      at December 31, 2008) fordoubtful accounts |   |           | 5,071   |   |   |   | 5,407 |   |
| Other, including current      portion of long-term receivables andadvances        |   |           | 688     |   |   |   | 1,001 |   |
| Total accounts and notes      receivable                                          |   |           | 5,759   |   |   |   | 6,408 |   |
| Inventories                                                                       |   |           | 587     |   |   |   | 628 |   |
| Current deferred tax      assets                                                  |   |           | 471     |   |   |   | 462 |   |
| Prepaid expenses and other      current assets                                    |   |           | 2,435   |   |   |   | 2,163 |   |
| Total current      assets                                                         |   |           | 37,403  |   |   |   | 47,299 |   |
|                                                                              |   |           |    |   |   |   |   |   |
| Long-term      receivables and advances                                           |   |           | 900     |   |   |   | 992 |   |
|                                                                              |   |           |    |   |   |   |   |   |
| Deferred      tax assets                                                          |   |           | 10,177  |   |   |   | 9,049 |   |
|                                                                              |   |           |    |   |   |   |   |   |
| Investment      in development partnership                                        |   |           | 35,500  |   |   |   | 33,666 |   |
|                                                                              |   |           |    |   |   |   |   |   |
| Property      and equipment, at cost:                                             |   |           |    |   |   |   |   |   |
| Land and land      improvements                                                   |   |           | 2,102   |   |   |   | 2,102 |   |
| Buildings                                                                         |   |           | 25,925  |   |   |   | 25,610 |   |
| Furniture and      equipment                                                      |   |           | 32,907  |   |   |   | 30,150 |   |
| Leasehold      improvements                                                       |   |           | 8,827   |   |   |   | 8,785 |   |
| Projects in    progress                                                           |   |           | --      |   |   |   | 472 |   |
|                                                                              |   |           | 69,761  |   |   |   | 67,119 |   |
| Less accumulated depreciation and      amortization                               |   |           | 34,696  |   |   |   | 32,088 |   |
| Net property and      equipment                                                   |   |           | 35,065  |   |   |   | 35,031 |   |
|                                                                              |   |           |    |   |   |   |   |   |
| Other      long-term assets                                                       |   |           | 958     |   |   |   | 1,003 |   |
|                                                                              |   | $              | 120,003 |   |   | $ | 127,040 |   |

----

Table of Contents

|                                             |   | (in thousands) |    |
|--------------------------------------------------|--------|----------------|---------|
|                                             |   | June 30, 2009  |    |   | December 31, 2008 |   |
|                                             |   |           |    |   |   |   |
|                                             |   |           |    |   |   |   |
| LIABILITIES      AND STOCKHOLDERS’ EQUITY  |   |           |    |   |   |   |
| Current      liabilities:                        |   |           |    |   |   |   |
| Current portion of long-term      debt           |   | $              | 1,215   |   |   | $ | 1,163 |   |
| Accounts payable                                 |   |           | 2,516   |   |   |   | 3,747 |   |
| Advance deposits                                 |   |           | 1,281   |   |   |   | 1,281 |   |
| Accrued income    taxes                          |   |           | 180     |   |   |   | 402 |   |
| Accrued    liabilities:                          |   |           |    |   |   |   |   |   |
| Salaries and    wages                            |   |           | 1,086   |   |   |   | 1,772 |   |
| Rentals                                          |   |           | 2,670   |   |   |   | 4,787 |   |
| Interest                                         |   |           | 232     |   |   |   | 244 |   |
| Pension and other employee      benefits         |   |           | 1,562   |   |   |   | 1,612 |   |
| Other                                            |   |           | 1,338   |   |   |   | 862 |   |
|                                             |   |           | 6,888   |   |   |   | 9,277 |   |
| Total current      liabilities                   |   |           | 12,080  |   |   |   | 15,870 |   |
|                                             |   |           |    |   |   |   |   |   |
| Long-term      debt                              |   |           | 31,215  |   |   |   | 31,839 |   |
|                                             |   |           |    |   |   |   |   |   |
| Deferred      gain                               |   |           | 64,481  |   |   |   | 64,481 |   |
|                                             |   |           |    |   |   |   |   |   |
| Pension      liability, non-current              |   |           | 9,226   |   |   |   | 9,338 |   |
|                                             |   |           |    |   |   |   |   |   |
| Other      non-current liabilities               |   |           | 1,196   |   |   |   | 1,386 |   |
|                                             |   |           |    |   |   |   |   |   |
| 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                                 |   |           | 11,834  |   |   |   | 14,155 |   |
| Treasury shares – 2,404, at      cost      |   |           | (12,053 | ) |   |   | (12,053 | ) |
| Accumulated other comprehensive      loss        |   |           | (2,858  | ) |   |   | (2,858 | ) |
| Total      stockholders’ equity            |   |           | 1,805   |   |   |   | 4,126 |   |
|                                             |   | $              | 120,003 |   |   | $ | 127,040 |   |

----

Table of Contents

CONDENSED

|                                                       |   |                      |   |   |                    |   |
|------------------------------------------------------------|--------|---------------------------|--------|--------|-------------------------|--------|
|                                                       |   | Three Months EndedJune 30 |   |   | Six Months EndedJune 30 |   |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |
|                                                       |   | 2009                      |   |   | 2008                    |   |   | 2009 |   |   | 2008 |   |
| Revenues:                                                  |   |                      |   |   |                    |   |   |   |   |   |   |   |
| Rooms                                                      |   | $                         | 9,718  |   |                    | $      | 12,304 |   |   | $ | 17,137 |   |   | $ | 21,507 |   |
| Food and    beverage                                       |   |                      | 4,455  |   |                    |   | 5,059 |   |   |   | 7,932 |   |   |   | 9,427 |   |
| Management, license and service      fees                  |   |                      | 1,007  |   |                    |   | 1,708 |   |   |   | 2,133 |   |   |   | 4,768 |   |
| Parking, telephone and      other                          |   |                      | 1,317  |   |                    |   | 1,351 |   |   |   | 2,398 |   |   |   | 2,518 |   |
|                                                       |   |                      | 16,497 |   |                    |   | 20,422 |   |   |   | 29,600 |   |   |   | 38,220 |   |
| Other revenues from managed and      affiliated properties |   |                      | 1,082  |   |                    |   | 1,346 |   |   |   | 2,303 |   |   |   | 6,463 |   |
| Total      revenues                                        |   |                      | 17,579 |   |                    |   | 21,768 |   |   |   | 31,903 |   |   |   | 44,683 |   |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and expenses:                                   |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Costs and operating      expenses                          |   |                      | 7,119  |   |                    |   | 8,250 |   |   |   | 13,704 |   |   |   | 15,807 |   |
| Advertising and      promotion                             |   |                      | 1,448  |   |                    |   | 1,464 |   |   |   | 2,824 |   |   |   | 2,800 |   |
| Administrative and      general                            |   |                      | 3,368  |   |                    |   | 3,291 |   |   |   | 6,579 |   |   |   | 6,590 |   |
| Human resources                                            |   |                      | 209    |   |                    |   | 337 |   |   |   | 460 |   |   |   | 609 |   |
| Maintenance                                                |   |                      | 777    |   |                    |   | 907 |   |   |   | 1,623 |   |   |   | 1,834 |   |
| Rentals                                                    |   |                      | 1,510  |   |                    |   | 1,756 |   |   |   | 3,035 |   |   |   | 3,775 |   |
| Property taxes                                             |   |                      | 349    |   |                    |   | 375 |   |   |   | 703 |   |   |   | 745 |   |
| Depreciation and      amortization                         |   |                      | 1,354  |   |                    |   | 1,312 |   |   |   | 2,709 |   |   |   | 3,250 |   |
|                                                       |   |                      | 16,134 |   |                    |   | 17,692 |   |   |   | 31,637 |   |   |   | 35,410 |   |
| Other expenses from managed and      affiliated properties |   |                      | 1,082  |   |                    |   | 1,346 |   |   |   | 2,303 |   |   |   | 6,463 |   |
| Total      costs and expenses                              |   |                      | 17,216 |   |                    |   | 19,038 |   |   |   | 33,940 |   |   |   | 41,873 |   |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Operating      income (loss)                               |   |                      | 363    |   |                    |   | 2,730 |   |   |   | (2,037 | ) |   |   | 2,810 |   |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Other      income (deductions):                            |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Interestexpense                                            |   |                      | (718   | )      |                    |   | (742 | ) |   |   | (1,434 | ) |   |   | (1,489 | ) |
| Interest income                                            |   |                      | 85     |   |                    |   | 242 |   |   |   | 208 |   |   |   | 613 |   |
| Foreign exchange gain      (loss)                          |   |                      | (7     | )      |                    |   | 4 |   |   |   | (18 | ) |   |   | 11 |   |
| Gain (loss) on sales of      assets                        |   |                      | (4     | )      |                    |   | 21 |   |   |   | (2 | ) |   |   | 443 |   |
|                                                       |   |                      | (644   | )      |                    |   | (475 | ) |   |   | (1,246 | ) |   |   | (422 | ) |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Income      (loss) before income tax provision             |   |                      | (281   | )      |                    |   | 2,255 |   |   |   | (3,283 | ) |   |   | 2,388 |   |
| Income      tax provision (benefit)                        |   |                      | (172   | )      |                    |   | 749 |   |   |   | (962 | ) |   |   | 792 |   |
| Net      income (loss)                                     |   |                      | (109   | )      |                    |   | 1,506 |   |   |   | (2,321 | ) |   |   | 1,596 |   |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Retained      earnings at beginning of period              |   |                      | 11,943 |   |                    |   | 11,460 |   |   |   | 14,155 |   |   |   | 15,068 |   |
| Cash      dividends                                        |   |                      | --     |   |                    |   | (370 | ) |   |   | -- |   |   |   | (4,068 | ) |
| Retained      earnings at end of period                    |   | $                         | 11,834 |   |                    | $      | 12,596 |   |   | $ | 11,834 |   |   | $ | 12,596 |   |
|                                                       |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) per share                           |   | $                         | (0.03  | )      |                    | $      | 0.41 |   |   | $ | (0.63 | ) |   | $ | 0.43 |   |
| Weighted      average number of shares outstanding         |   |                      | 3,698  |   |                    |   | 3,698 |   |   |   | 3,698 |   |   |   | 3,698 |   |

----

Table of Contents

CONDENSED 

|                                                             |   |  (in thousands)          |   |
|------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                             |   | Six      Months Ended June 30 |   |
|                                                             |   | 2009                          |   |   | 2008 |   |
| Cash      provided (used) by operating activities                |   |                          |   |   |   |   |
| Net      income (loss)                                           |   | $                             | (2,321 | ) |   | $ | 1,596 |   |
| Adjustments      to reconcile net income (loss) to net cash used |   |                          |   |   |   |   |   |   |
| by operating      activities                                     |   |                          |   |   |   |   |   |   |
| Depreciation and amortization of      property and equipment     |   |                          | 2,709  |   |   |   | 3,250 |   |
| Otheramortization                                                |   |                          | 46     |   |   |   | 21 |   |
| Deferred federal and state income      tax provision (benefit)   |   |                          | (1,137 | ) |   |   | 192 |   |
| Loss (gain) on sales of      assets                              |   |                          | 2      |   |   |   | (443 | ) |
| Changes      in assets and liabilities                           |   |                          |   |   |   |   |   |   |
| Restricted cash                                                  |   |                          | 51     |   |   |   | 1,083 |   |
| Accounts and notes      receivable                               |   |                          | 646    |   |   |   | (1,046 | ) |
| Inventories                                                      |   |                          | 41     |   |   |   | 18 |   |
| Prepaid expenses and      other                                  |   |                          | (211   | ) |   |   | (428 | ) |
| Accounts payable                                                 |   |                          | (307   | ) |   |   | (1,197 | ) |
| Advance deposits                                                 |   |                          | --     |   |   |   | (1,188 | ) |
| Accrued income    taxes                                          |   |                          | (285   | ) |   |   | 57 |   |
| Accrued    liabilities                                           |   |                          | (2,690 | ) |   |   | (1,999 | ) |
| Cash      used by operating activities                           |   |                          | (3,456 | ) |   |   | (84 | ) |
|                                                             |   |                          |   |   |   |   |   |   |
|                                                             |   |                          |   |   |   |   |   |   |
| Cash      provided (used) by investing activities                |   |                          |   |   |   |   |   |   |
| Proceeds from sales of      assets                               |   |                          | 38     |   |   |   | 766 |   |
| Payments received from      development partnership              |   |                          | --     |   |   |   | 125 |   |
| Expenditures for property and      equipment                     |   |                          | (2,766 | ) |   |   | (1,481 | ) |
| Payments received on long-term      receivables and advances     |   |                          | 140    |   |   |   | 669 |   |
| Investment in development      partnership                       |   |                          | (1,834 | ) |   |   | -- |   |
| New loans and      advances                                      |   |                          | (60    | ) |   |   | (62 | ) |
| Cash      provided (used) by investing activities                |   |                          | (4,482 | ) |   |   | 17 |   |
|                                                             |   |                          |   |   |   |   |   |   |
| Cash      used by financing activities                           |   |                          |   |   |   |   |   |   |
| Repayments of long term      debt                                |   |                          | (573   | ) |   |   | (518 | ) |
| Cash dividends    paid                                           |   |                          | (925   | ) |   |   | (4,438 | ) |
| Cash      used by financing activities                           |   |                          | (1,498 | ) |   |   | (4,956 | ) |
|                                                             |   |                          |   |   |   |   |   |   |
| Net      decrease in cash                                        |   |                          | (9,436 | ) |   |   | (5,023 | ) |
| Cash      and cash equivalents at beginning of period            |   |                          | 37,463 |   |   |   | 32,620 |   |
| Cash      and cash equivalents at end of period                  |   | $                             | 28,027 |   |   | $ | 27,597 |   |

----

Table of Contents

NOTES 

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

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

|                                  |   | (in      thousands) |   |
|---------------------------------------|--------|---------------------|--------|
|                                  |   | June 30,2009        |   |   | December 31,2008 |   |
| Sharm      El Sheikh, Egypt (a)       |   | $                   | 1,080  |   |   | $ | 1,215 |   |
| Other                                 |   |                | 240    |   |   |   | 187 |   |
| Total long-term      receivables      |   |                | 1,320  |   |   |   | 1,402 |   |
| Less:  current      portion |   |                | 420    |   |   |   | 410 |   |
| Net long-term      receivables        |   | $                   | 900    |   |   | $ | 992 |   |

| (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.  |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| 3. | Investment in      Development Partnership |
|----|--------------------------------------------|

|                                 |   |                  |    |
|--------------------------------------|--------|-----------------------|---------|
|                                 |   | at      June 30, 2009 |    |
|                                 |   |                  |    |
| Total      assets, primarily land    |   | $                     | 110,236 |   |
| Less      debt and other liabilities |   |                  | (64,707 | ) |
| Partnership      equity              |   | $                     | 45,529  |   |

| 4. | Borrowing      Arrangements |
|----|-----------------------------|

----

Table of Contents

| 5. | Hotel Costs and      Operating Expenses |
|----|-----------------------------------------|

|                           |   | (in      thousands)                     |   |
|--------------------------------|--------|-----------------------------------------|--------|
|                           |   | Three      Months Ended June    30 |   |   | Six      Months EndedJune 30 |   |
|                           |   | 2009                                    |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Direct      departmental costs |   |                                    |   |   |   |   |   |   |   |   |   |   |
| Rooms                          |   | $                                       | 2,548  |   |   | $ | 2,916 |   |   | $ | 4,704 |   |   | $ | 5,379 |   |
| Food      and beverage         |   |                                    | 3,416  |   |   |   | 3,869 |   |   |   | 6,568 |   |   |   | 7,473 |   |
| Heat,      light and power     |   |                                    | 577    |   |   |   | 731 |   |   |   | 1,239 |   |   |   | 1,460 |   |
| Other                          |   |                                    | 578    |   |   |   | 734 |   |   |   | 1,193 |   |   |   | 1,495 |   |
|                           |   | $                                       | 7,119  |   |   | $ | 8,250 |   |   | $ | 13,704 |   |   | $ | 15,807 |   |

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

|                                                                                |   | (in      thousands)           |   |
|-------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                                |   | Owned      &Leased Hotels |   |   | ManagementActivities |   |   | Consolidated |   |
|                                                                                |   |                          |   |   |   |   |   |   |   |
| Revenues                                                                            |   | $                             | 15,486 |   |   | $ | 1,011 |   |   | $ | 16,497 |   |
| Other      revenues from managed and                                                |   |                          |   |   |   |   |   |   |   |   |   |   |
| affiliated    properties                                                            |   |                          | --     |   |   |   | 1,082 |   |   |   | 1,082 |   |
| Total      revenues                                                                 |   |                          | 15,486 |   |   |   | 2,093 |   |   |   | 17,579 |   |
| Operating      income (loss) before depreciation and amortization      expense |   |                          | 2,856  |   |   |   | (1,139 | ) |   |   | 1,717 |   |
| Depreciation      and amortization                                                  |   |                          | (1,290 | ) |   |   | (64 | ) |   |   | (1,354 | ) |
| Interest      income (expense), net                                                 |   |                          | (714   | ) |   |   | 81 |   |   |   | (633 | ) |
| Other      deductions                                                               |   |                          | (4     | ) |   |   | (7 | ) |   |   | (11 | ) |
| Segment      pre-tax income (loss)                                                  |   |                          | 848    |   |   |   | (1,129 | ) |   |   | (281 | ) |
|                                                                                |   |                          |   |   |   |   |   |   |   |   |   |   |
| Segment      assets                                                                 |   |                          | 76,847 |   |   |   | 43,156 |   |   |   | 120,003 |   |
| Segment      capital additions                                                      |   |                          | 911    |   |   |   | 8 |   |   |   | 919 |   |

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|                                                                      |   | (in      thousands)           |   |
|---------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                      |   | Owned      &Leased Hotels |   |   | ManagementActivities |   |   | Consolidated |   |
|                                                                      |   |                          |   |   |   |   |   |   |   |
| Revenues                                                                  |   | $                             | 27,456 |   |   | $ | 2,144 |   |   | $ | 29,600 |   |
| Other      revenues from managed and                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| affiliated    properties                                                  |   |                          | --     |   |   |   | 2,303 |   |   |   | 2,303 |   |
| Total      revenues                                                       |   |                          | 27,456 |   |   |   | 4,447 |   |   |   | 31,903 |   |
| Operating      income (loss) before depreciation and amortization expense |   |                          | 2,832  |   |   |   | (2,160 | ) |   |   | 672 |   |
| Depreciation      and amortization                                        |   |                          | (2,580 | ) |   |   | (129 | ) |   |   | (2,709 | ) |
| Interest      income (expense), net                                       |   |                          | (1,427 | ) |   |   | 201 |   |   |   | (1,226 | ) |
| Other      deductions                                                     |   |                          | (4     | ) |   |   | (16 | ) |   |   | (20 | ) |
| Segment      pre-tax loss                                                 |   |                          | (1,179 | ) |   |   | (2,104 | ) |   |   | (3,283 | ) |
|                                                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| Segment      assets                                                       |   |                          | 76,847 |   |   |   | 43,156 |   |   |   | 120,003 |   |
| Segment      capital additions                                            |   |                          | 2,710  |   |   |   | 56 |   |   |   | 2,766 |   |

|                                                                      |   | (in      thousands)           |   |
|---------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                      |   | Owned      &Leased Hotels |   |   | ManagementActivities |   |   | Consolidated |   |
|                                                                      |   |                          |   |   |   |   |   |   |   |
| Revenues                                                                  |   | $                             | 18,712 |   |   | $ | 1,710 |   |   | $ | 20,422 |   |
| Other      revenues from managed and                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| affiliated    properties                                                  |   |                          | --     |   |   |   | 1,346 |   |   |   | 1,346 |   |
| Total      revenues                                                       |   |                          | 18,712 |   |   |   | 3,056 |   |   |   | 21,768 |   |
| Operating      income (loss) before depreciation and amortization expense |   |                          | 4,342  |   |   |   | (300 | ) |   |   | 4,042 |   |
| Depreciation      and amortization                                        |   |                          | (1,242 | ) |   |   | (70 | ) |   |   | (1,312 | ) |
| Interest      income (expense), net                                       |   |                          | (741   | ) |   |   | 241 |   |   |   | (500 | ) |
| Other      income (deductions)                                            |   |                          | (4     | ) |   |   | 29 |   |   |   | 25 |   |
| Segment      pre-tax income (loss)                                        |   |                          | 2,355  |   |   |   | (100 | ) |   |   | 2,255 |   |
|                                                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| Segment      assets                                                       |   |                          | 75,959 |   |   |   | 45,822 |   |   |   | 121,781 |   |
| Segment      capital additions                                            |   |                          | 862    |   |   |   | 63 |   |   |   | 925 |   |

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|                                                               |   | (in      thousands)           |   |
|--------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                               |   | Owned      &Leased Hotels |   |   | ManagementActivities |   |   | Consolidated |   |
|                                                               |   |                          |   |   |   |   |   |   |   |
| Revenues                                                           |   | $                             | 33,437 |   |   | $ | 4,783 |   |   | $ | 38,220 |   |
| Other      revenues from managed and                               |   |                          |   |   |   |   |   |   |   |   |   |   |
| affiliated    properties                                           |   |                          | --     |   |   |   | 6,463 |   |   |   | 6,463 |   |
| Total      revenues                                                |   |                          | 33,437 |   |   |   | 11,246 |   |   |   | 44,683 |   |
| Operating      income before depreciation and amortization expense |   |                          | 5,429  |   |   |   | 631 |   |   |   | 6,060 |   |
| Depreciation      and amortization                                 |   |                          | (2,484 | ) |   |   | (766 | ) |   |   | (3,250 | ) |
| Interest      income (expense), net                                |   |                          | (1,487 | ) |   |   | 611 |   |   |   | (876 | ) |
| Other      income (deductions)                                     |   |                          | (4     | ) |   |   | 458 |   |   |   | 454 |   |
| Segment      pre-tax income                                        |   |                          | 1,454  |   |   |   | 934 |   |   |   | 2,388 |   |
|                                                               |   |                          |   |   |   |   |   |   |   |   |   |   |
| Segment      assets                                                |   |                          | 75,959 |   |   |   | 45,822 |   |   |   | 121,781 |   |
| Segment      capital additions                                     |   |                          | 1,404  |   |   |   | 77 |   |   |   | 1,481 |   |

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

|                                                  |   | Three      months ended June 30 |   |   | Six      months ended June 30 |   |
|-------------------------------------------------------|--------|---------------------------------|--------|--------|-------------------------------|--------|
|                                                  |   | 2009                            |   |   | 2008                          |   |   | 2009 |   |   | 2008 |   |
| Numerator:                                            |   |                            |   |   |                          |   |   |   |   |   |   |   |
|   Income      (loss) from operations        |   | $                               | (109   | )      |                          | $      | 1,506 |   |   | $ | (2,321 | ) |   | $ | 1,596 |   |
|                                                  |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Denominator:                                          |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|   Weighted      average number of           |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
|      shares      outstanding |   |                            | 3,698  |   |                          |   | 3,698 |   |   |   | 3,698 |   |   |   | 3,698 |   |
|                                                  |   |                            |   |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Net      income (loss) per share of common stock      |   | $                               | (0.03  | )      |                          | $      | 0.41 |   |   | $ | (0.63 | ) |   | $ | 0.43 |   |

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

|                                                                                 |   | (in      thousands)           |   |
|--------------------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                                 |   | Six      Months ended June 30 |   |
|                                                                                 |   | 2009                          |   |   | 2008 |   |
|                                                                                 |   |                          |   |   |   |   |
| Service      cost                                                                    |   | $                             | 41     |   |   | $ | -- |   |
| Interest      cost                                                                   |   |                          | 798    |   |   |   | 840 |   |
| Expected      return on assets                                                       |   |                          | (858   | ) |   |   | (918 | ) |
| Recognized      actuarial (gain) loss                                                |   |                          | 101    |   |   |   | (8 | ) |
| Net      expense (credit) included in the consolidated statements of      operations |   | $                             | 82     |   |   | $ | (86 | ) |

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MANAGEMENT’S 

|                                                                                |   | TOTAL      REVENUES(in      thousands) |   |
|-------------------------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                                |   | NO.      OFROOMS                       |   |   | 2009 |   |   | 2008 |   |
| Royal      Sonesta Hotel Boston                                                     |   |                                   | 400    |   |   | $ | 10,501 |   |   | $ | 14,329 |   |
| Royal      Sonesta Hotel New Orleans                                                |   |                                   | 500    |   |   |   | 16,955 |   |   |   | 19,108 |   |
| Management      and service fees and other revenues                                 |   |                                   |   |   |   |   | 2,144 |   |   |   | 4,783 |   |
| Total      revenues, excluding revenues from managed and affiliated      properties |   |                                   |   |   |   | $ | 29,600 |   |   | $ | 38,220 |   |

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|                                                                |   | OPERATING      INCOME (LOSS)(in      thousands) |   |
|---------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                |   | 2009                                            |   |   | 2008 |   |
| Royal      Sonesta Hotel Boston                                     |   | $                                               | (258   | ) |   | $ | 1,858 |   |
| Royal      Sonesta Hotel New Orleans                                |   |                                            | 510    |   |   |   | 1,087 |   |
| Operating      income from hotels after management and service fees |   |                                            | 252    |   |   |   | 2,945 |   |
| Management      activities and other                                |   |                                            | (2,289 | ) |   |   | (135 | ) |
| Operating      income (loss)                                        |   | $                                               | (2,037 | ) |   | $ | 2,810 |   |

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|                                                |   | TOTAL      REVENUES(in      thousands) |   |
|-----------------------------------------------------|--------|----------------------------------------|--------|
|                                                |   | NO.      OFROOMS                       |   |   | 2009 |   |   | 2008 |   |
| Royal      Sonesta Hotel Boston                     |   |                                   | 400    |   |   | $ | 7,151 |   |   | $ | 9,491 |   |
| Royal      Sonesta Hotel New Orleans                |   |                                   | 500    |   |   |   | 8,335 |   |   |   | 9,221 |   |
| Management      and service fees and other revenues |   |                                   |   |   |   |   | 1,011 |   |   |   | 1,710 |   |
| Total      revenues, excluding revenues from        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| managed and affiliated      properties              |   |                                   |   |   |   | $ | 16,497 |   |   | $ | 20,422 |   |

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|                                                                |   | OPERATING      INCOME (LOSS) (in      thousands) |   |
|---------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                |   | 2009                                                  |   |   | 2008 |   |
| Royal      Sonesta Hotel Boston                                     |   | $                                                     | 1,255  |   |   | $ | 2,584 |   |
| Royal      Sonesta Hotel New Orleans                                |   |                                                  | 311    |   |   |   | 516 |   |
| Operating      income from hotels after management and service fees |   |                                                  | 1,566  |   |   |   | 3,100 |   |
| Management      activities and other                                |   |                                                  | (1,203 | ) |   |   | (370 | ) |
| Operating      income                                               |   | $                                                     | 363    |   |   | $ | 2,730 |   |

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QUANTITATIVE 

|                       |   | YEAR   |   |   |   |   |   |   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                       |   | 2009   |   |   | 2010   |   |   | Total  |   |   | Fair Value |   |
| Fixed      rate            |   | $      | 590    |   |   | $      | 31,840 |   |   | $ | 32,430 |   |   | $ | 32,430 |   |
| Average      interest rate |   |   | 8.6    | %      |   |   | 8.6    | %      |   |   |   |   |   |   |   |   |

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INTERNAL

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PART II – Item 4

SUBMISSION 

| DIRECTOR                  | VOTES RECEIVED | VOTES WITHHELD |
|---------------------------|----------------|----------------|
| George      S. Abrams     | 3,256,202      | 283,438        |
| Joseph      L. Bower      | 3,358,905      | 180,735        |
| Charles      J. Clark     | 3,423,640      | 116,000        |
| Clarence      A. Davis    | 2,888,042      | 651,598        |
| Irma      F. Mann         | 3,328,127      | 211,513        |
| Jacqueline      Sonnabend | 3,380,701      | 158,939        |
| Peter      J. Sonnabend   | 3,315,966      | 223,674        |
| Stephanie      Sonnabend  | 3,380,701      | 158,939        |
| Stephen      Sonnabend    | 3,315,966      | 223,674        |
| Jean      C. Tempel       | 3,358,905      | 180,735        |

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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:      August 13 2009                |