SECURITIES AND EXCHANGE COMMISSION



FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d)





BRISTOL HOTELS & RESORTS







Commission File No. 1-14047

|                         |  |                   
|------------------------ |  | ------------------
|Incorporated in Delaware |  | IRS No. 75-2754805



---

Securities registered pursuant to Section 12(b) of the Act:

|                                       |  |                        
|-------------------------------------- |  | -----------------------
|                                       |  | Name of each exchange  
|Title of each class                    |  | on which registered    
|                                       |  |                        
|Common Stock, Par Value $.01 per share |  | New York Stock Exchange



---

The Company (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been
subject to such filing requirements for the past 90 days.

The number of shares of common stock, par value $.01 per
share, outstanding at August 6, 1999 was 17,833,686.



---






---



BRISTOL HOTELS & RESORTS

INDEX

|                               |                                                                                                       |                                                                                                                                                               |    |    |    | 
|------------------------------ | ----------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | -- | -- | -- | 
|                               |                                                                                                       | Page No.                                                                                                                                                     
|                               |                                                                                                       |                                                                                                                                                              
|PART I. FINANCIAL INFORMATION. |                                                                                                       |                                                                                                                                                               |    |   
|                              
|                              
|                              
|                              
|                               | Item 1. Financial Statements:                                                                         |                                                                                                                                                               |    |    |   
|                               | Bristol Hotels & Resorts                                                                              |                                                                                                                                                               |    |    |   
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Statements of Operations for the three months ended
        June 30, 1999 and 1998                                                               |    |    | 3  | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Statements of Operations for the six months ended
        June 30, 1999 and period from Inception (March 20,
        1998) through June 30, 1998 |    |    | 4  | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Balance Sheets as of June 30, 1999 and
        December 31, 1998                                                                                 |    |    | 5  | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Statements of Cash Flows for the six months ended
        June 30, 1999 and period from Inception (March 20,
        1998) through June 30, 1998 |    |    | 6  | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Notes to Consolidated Financial Statements                                                                                                                    |    |    | 7  | 
|                               | Bristol Hotel Company (Predecessor)                                                                   |                                                                                                                                                               |    |    |   
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Statement of Operations for the three months ended
        June 30, 1998                                                                         |    |    | 9  | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Statement of Operations for the six months ended
        June 30, 1998                                                                           |    |    | 10 | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Consolidated Statement of Cash Flows for the six months ended
        June 30, 1998                                                                           |    |    | 11 | 
|                              
|                              
|                              
|                              
|                               |                                                                                                       | Notes to Consolidated Financial Statements                                                                                                                    |    |    | 12 | 
|                              
|                              
|                              
|                              
|                               | Item 2. Managements Discussion and Analysis of
        Results of Operations and Financial Condition |                                                                                                                                                               |    | 15 |   
|                              
|                              
|                              
|                              
|PART II. OTHER INFORMATION.    |                                                                                                       |                                                                                                                                                               |    |   
|                              
|                              
|                              
|                              
|                               | Item 6. Exhibits and Reports on Form 8-K                                                              |                                                                                                                                                               |    | 20 |   
|                              
|                              
|                              
|                              
|SIGNATURE                      |                                                                                                       |                                                                                                                                                               | 21 |   

2



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BRISTOL HOTELS & RESORTS

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 1999 AND 1998



|                                                                                    |                                   |                               |               |          |        |         |     |     |        |     | 
|----------------------------------------------------------------------------------- | --------------------------------- | ----------------------------- | ------------- | -------- | ------ | ------- | --- | --- | ------ | --- | 
|                                                                                    |                                   | June 30,                      |               | June 30,
|                                                                                    |                                   | 1999                          |               | 1998    
|                                                                                    |                                   |                               |               |         
|REVENUE                                                                             |                                   |                               |               |          |        |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Rooms                             |                               | $             | 147,792  |        |         | $   | 127 |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Food and beverage                 |                               |               | 35,873   |        |         |     | 1   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Management fees                   |                               |               | 1,581    |        |         |     |    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Construction management fees      |                               |               | 1,009    |        |         |     |    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Other                             |                               |               | 10,659   |        |         |     | 4   |       
|                                                                                    |                                   |                               |               |          |        |         |     |    
|                                                                                    |                                   |                               | Total revenue |          |        | 196,914 |     |     |        | 132 | 
|                                                                                    |                                   |                               |               |          |        |         |     |    
|OPERATING COSTS AND EXPENSES                                                        |                                   |                               |               |          |        |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Departmental expenses:            |                               |               |          |        |         |     |     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Rooms                         |               |          | 41,852 |         |     |     | 59     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Food and beverage             |               |          | 27,945 |         |     |     |       |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Other operating departments   |               |          | 3,958  |         |     |     | 1      |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Undistributed operating expenses: |                               |               |          |        |         |     |     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Administrative and general    |               |          | 17,390 |         |     |     | 15     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Marketing                     |               |          | 15,088 |         |     |     | 3      |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Property occupancy costs      |               |          | 16,307 |         |     |     | 16     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Tenant lease expense          |               |          | 61,724 |         |     |     | 97     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Depreciation and amortization |               |          | 732    |         |     |     |       |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Corporate expense             |               |          | 4,794  |         |     |     |       |    
|                                                                                    |                                   |                               |               |          |        |         |     |    
|Operating income (loss)                                                             |                                   |                               | 7,124         |          |        |         | (59 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Other income (expense):                                                             |                                   |                               |               |          |        |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Interest income, net              |                               |               | 360      |        |         |     |    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Equity in loss of joint venture   |                               |               | (45      | )      |         |     |    |       
|                                                                                    |                                   |                               |               |          |        |         |     |    
|Income (loss) before income taxes                                                   |                                   |                               | 7,439         |          |        |         | (59 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Provision for income taxes                                                          |                                   |                               | 2,938         |          |        |         |    |    
|                                                                                    |                                   |                               |               |          |        |         |     |    
|NET INCOME (LOSS)                                                                   |                                   | $                             | 4,501         |          |        | $       | (59 | )  
|                                                                                    |                                   |                               |               |          |        |         |     |    
|Earnings (loss) per common and common equivalent share:                             |                                   |                               |               |          |        |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Net income (loss):                |                               |               |          |        |         |     |     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Basic                         |               | $        | 0.25   |         |     | $   | (59.00 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Diluted                       |               | $        | 0.25   |         |     | $   | (59.00 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Weighted average number of common and common equivalent shares
        outstanding: |                                   |                               |               |          |        |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Basic                             |                               |               | 17,781   |        |         |     | 1   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Diluted                           |                               |               | 18,122   |        |         |     | 1   |       

The accompanying notes are an integral part of these consolidated
 financial statements.

3



---



BRISTOL HOTELS & RESORTS

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND THE

PERIOD FROM INCEPTION (MARCH 20, 1998) THROUGH
JUNE 30, 1998




|                                                                                    |                                   |                               |               |           |         |         |     |     |        |     | 
|----------------------------------------------------------------------------------- | --------------------------------- | ----------------------------- | ------------- | --------- | ------- | ------- | --- | --- | ------ | --- | 
|                                                                                    |                                   |                               |               | Inception
|                                                                                    |                                   |                               |               | Through  
|                                                                                    |                                   | June 30,                      |               | June 30, 
|                                                                                    |                                   | 1999                          |               | 1998     
|                                                                                    |                                   |                               |               |          
|REVENUE                                                                             |                                   |                               |               |           |         |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Rooms                             |                               | $             | 279,491   |         |         | $   | 127 |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Food and beverage                 |                               |               | 69,076    |         |         |     | 1   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Management fees                   |                               |               | 2,518     |         |         |     |    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Construction management fees      |                               |               | 2,391     |         |         |     |    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Other                             |                               |               | 19,652    |         |         |     | 4   |       
|                                                                                    |                                   |                               |               |           |         |         |     |    
|                                                                                    |                                   |                               | Total revenue |           |         | 373,128 |     |     |        | 132 | 
|                                                                                    |                                   |                               |               |           |         |         |     |    
|OPERATING COSTS AND EXPENSES                                                        |                                   |                               |               |           |         |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Departmental expenses:            |                               |               |           |         |         |     |     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Rooms                         |               |           | 80,068  |         |     |     | 59     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Food and beverage             |               |           | 53,794  |         |     |     |       |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Other operating departments   |               |           | 7,387   |         |     |     | 1      |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Undistributed operating expenses: |                               |               |           |         |         |     |     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Administrative and general    |               |           | 35,098  |         |     |     | 15     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Marketing                     |               |           | 29,116  |         |     |     | 3      |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Property occupancy costs      |               |           | 32,353  |         |     |     | 16     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Tenant lease expense          |               |           | 113,838 |         |     |     | 97     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Depreciation and amortization |               |           | 1,391   |         |     |     |       |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Corporate expense             |               |           | 11,340  |         |     |     |       |    
|                                                                                    |                                   |                               |               |           |         |         |     |    
|Operating income (loss)                                                             |                                   |                               | 8,743         |           |         |         | (59 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Other income (expense):                                                             |                                   |                               |               |           |         |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Interest income, net              |                               |               | 586       |         |         |     |    |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Equity in loss of joint venture   |                               |               | (45       | )       |         |     |    |       
|                                                                                    |                                   |                               |               |           |         |         |     |    
|Income (loss) before income taxes                                                   |                                   |                               | 9,284         |           |         |         | (59 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Provision for income taxes                                                          |                                   |                               | 3,667         |           |         |         |    |    
|                                                                                    |                                   |                               |               |           |         |         |     |    
|NET INCOME (LOSS)                                                                   |                                   | $                             | 5,617         |           |         | $       | (59 | )  
|                                                                                    |                                   |                               |               |           |         |         |     |    
|Earnings (loss) per common and common equivalent share:                             |                                   |                               |               |           |         |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Net income (loss):                |                               |               |           |         |         |     |     |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Basic                         |               | $         | 0.32    |         |     | $   | (59.00 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                   | Diluted                       |               | $         | 0.31    |         |     | $   | (59.00 | )  
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Weighted average number of common and common equivalent shares
        outstanding: |                                   |                               |               |           |         |         |     |    
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Basic                             |                               |               | 17,780    |         |         |     | 1   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Diluted                           |                               |               | 18,082    |         |         |     | 1   |       

The accompanying notes are an integral part of these consolidated
 financial statements.

4



---



BRISTOL HOTELS & RESORTS

CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 1999 AND DECEMBER 31, 1998



|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |        |         | 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------ | ------- | ------------ | ------- |  | ------- | ------ | ------- | 
|                                                                                                                                                                                                                       |                                        | June 30,                                   |         | December 31,
|                                                                                                                                                                                                                       |                                        | 1999                                       |         | 1998        
|                                                                                                                                                                                                                       |                                        |                                            |         |             
|                                                                                                                                                                                                                       |                                        | (Unaudited)                                |         |             
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|ASSETS                                                                                                                                                                                                                
|Current assets                                                                                                                                                                                                         |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Cash and cash equivalents              |                                            | $       | 27,633       |         |  | $       | 24,916 |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Accounts receivable, net               |                                            |         | 38,513       |         |  |         | 35,329 |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Prepaid rent                           |                                            |         | 14,621       |         |  |         | 11,042 |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Inventory                              |                                            |         | 10,346       |         |  |         | 9,612  |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Notes receivable  FelCor              |                                            |         | 10,382       |         |  |         | 9,100  |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Deposits and other current assets      |                                            |         | 8,250        |         |  |         | 6,144  |        
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                       |                                        | Total current assets                       |         |              | 109,745 |  |         |        | 96,143  | 
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Property and equipment, net                                                                                                                                                                                            |                                        |                                            | 7,030   |              |         |  | 5,889   |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Investment in joint venture                                                                                                                                                                                            |                                        |                                            | 657     |              |         |  |        |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Investments in management contracts, net                                                                                                                                                                               |                                        |                                            | 1,440   |              |         |  | 1,962   |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Deferred charges and other non-current assets, net                                                                                                                                                                     |                                        |                                            | 1,073   |              |         |  | 1,528   |       
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                       |                                        | Total assets                               |         | $            | 119,945 |  |         | $      | 105,522 | 
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                                                  
|Current liabilities                                                                                                                                                                                                    |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Accounts payable and accrued expenses  |                                            | $       | 46,752       |         |  | $       | 41,641 |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Accrued occupancy, sales and use taxes |                                            |         | 7,899        |         |  |         | 6,512  |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Accrued rent                           |                                            |         | 9,974        |         |  |         | 8,498  |        
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                       | Accrued insurance reserves             |                                            |         | 6,030        |         |  |         | 6,511  |        
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                       |                                        | Total current liabilities                  |         |              | 70,655  |  |         |        | 63,162  | 
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Deferred income taxes                                                                                                                                                                                                  |                                        |                                            | 1,870   |              |         |  | 1,376   |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Other liabilities                                                                                                                                                                                                      |                                        |                                            | 6,258   |              |         |  | 5,575   |       
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                       |                                        | Total liabilities                          |         |              | 78,783  |  |         |        | 70,113  | 
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|Common stock ($.01 par value; 100,000,000 shares
        authorized, 31,957,919 shares issued, and 17,783,686 and
        17,778,315 shares outstanding at June 30, 1999, and
        December 31, 1998, respectively) |                                        |                                            | 228     |              |         |  | 228     |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Additional paid-in capital                                                                                                                                                                                             |                                        |                                            | 57,296  |              |         |  | 57,160  |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Cumulative translation adjustment                                                                                                                                                                                      |                                        |                                            | 12      |              |         |  | 12      |       
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Treasury stock, at cost (5,065,409 shares)                                                                                                                                                                             |                                        |                                            | (24,636 | )            |         |  | (24,636 | )     
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|                                                                                                                                                                                                                      
|Retained earnings                                                                                                                                                                                                      |                                        |                                            | 8,262   |              |         |  | 2,645   |       
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                       |                                        | Total stockholders equity                 |         |              | 41,162  |  |         |        | 35,409  | 
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       
|                                                                                                                                                                                                                       |                                        | Total liabilities and stockholders equity |         | $            | 119,945 |  |         | $      | 105,522 | 
|                                                                                                                                                                                                                       |                                        |                                            |         |              |         |  |         |       

The accompanying notes are an integral part of these consolidated
 financial statements.

5



---



BRISTOL HOTELS & RESORTS

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND THE

PERIOD FROM INCEPTION (MARCH 20, 1998) THROUGH
JUNE 30, 1998




|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |     |   |   | 
|------------------------------------------------ | ------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | ----------------------------------------------- | --------- | ----- | ------ | - | --- | - | - | 
|                                                 |                                                                                                  |                                                                   |                                                 | Inception
|                                                 |                                                                                                  |                                                                   |                                                 | Through  
|                                                 |                                                                                                  | June 30,                                                          |                                                 | June 30, 
|                                                 |                                                                                                  | 1999                                                              |                                                 | 1998     
|                                                 |                                                                                                  |                                                                   |                                                 |          
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Net income (loss)                                                                                |                                                                   | $                                               | 5,617     |       |        | $ | (59 | )
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net income (loss) to net cash provided
        by operating activities: |                                                                   |                                                 |           |       |        |   |     |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                  | Depreciation and amortization                                     |                                                 |           | 1,391 |        |   |     |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                  | Amortization of deferred financing fees                           |                                                 |           | 147   |        |   |     |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                  | Equity in loss of joint venture                                   |                                                 |           | 45    |        |   |     |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                  | Non-cash write-off of investment in Hollywood management contract |                                                 |           | 840   |        |   |     |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                                  | Compensation expense recognized for employee stock options        |                                                 |           | 93    |        |   |     |  |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Changes in working capital                                                                       |                                                                   |                                                 | (1,725    | )     |        |   |    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Increase in other liabilities                                                                    |                                                                   |                                                 | 683       |       |        |   | 60  |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Deferred tax provision                                                                           |                                                                   |                                                 | 494       |       |        |   |    |  
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|                                                 |                                                                                                  |                                                                   | Cash provided by operating activities           |           |       | 7,585  |   |     |   | 1 | 
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|CASH FLOWS FROM INVESTING ACTIVITIES:            |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Improvements to property and equipment                                                           |                                                                   |                                                 | (2,432    | )     |        |   |    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Investment in joint venture                                                                      |                                                                   |                                                 | (702      | )     |        |   |    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Investment in management contract                                                                |                                                                   |                                                 | (400      | )     |        |   |    |  
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|                                                 |                                                                                                  |                                                                   | Cash used in investing activities               |           |       | (3,534 | ) |     |   |  | 
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|CASH FLOWS FROM FINANCING ACTIVITIES:            |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|                                                
|                                                
|                                                
|                                                
|                                                 | Decrease in deferred charges and other non-current assets                                        |                                                                   |                                                 | (95       | )     |        |   |    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Contribution from Predecessor                                                                    |                                                                   |                                                 |          |       |        |   | 1   |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Increase in FelCor Notes, net of repayments                                                      |                                                                   |                                                 | (1,282    | )     |        |   |    |  
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from exercise of employee stock options                                                 |                                                                   |                                                 | 43        |       |        |   |    |  
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|                                                 |                                                                                                  |                                                                   | Cash provided by (used in) financing activities |           |       | (1,334 | ) |     |   | 1 | 
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|Net increase in cash and cash equivalents        |                                                                                                  |                                                                   | 2,717                                           |           |       |        | 2 |    
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of period |                                                                                                  |                                                                   | 24,916                                          |           |       |        |  |    
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    
|Cash and cash equivalents at end of period       |                                                                                                  | $                                                                 | 27,633                                          |           |       | $      | 2 |    
|                                                 |                                                                                                  |                                                                   |                                                 |           |       |        |   |    

The accompanying notes are an integral part of these consolidated
 financial statements.

6



---



BRISTOL HOTELS & RESORTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bristol Hotels & Resorts (together with its
        subsidiaries, the Company) is a Delaware corporation
        which was incorporated on March 20, 1998
        (Inception), and began operations on May 20,
        1998, as a subsidiary of Bristol Hotel Company (BHC
        or the Predecessor). The Company was spun off from
        BHC (the Spin-off) in connection with the merger of
        BHC with FelCor Lodging Trust Incorporated (FelCor)
        on July 27, 1998, and began trading on July 28, 1998,
        as a separate publicly traded company.                                                                                                                                                                                                                                                                                                                                                       
|
| | The Company is one of the leading independent hotel operating
        companies in the United States, operating 114 primarily
        full-service hotels (as of June 30, 1999) in the upscale and
         midscale segments of the hotel industry containing approximately
         30,400 rooms, of which 100 hotels are operated under the
        long-term leases with FelCor. The Company operates hotels in
        27 states and Canada with 30 hotels in Texas,
        11 hotels in California and 9 hotels in Georgia. The
        Company operates the largest number of Bass Hotels &
        Resorts branded hotels in the world, including Crowne Plaza,
        Holiday Inn Select, Holiday Inn and Holiday Inn Express hotels.
        The Company also operates 20 hotels under other hotel brands,
        including Sheraton Four Points, Hampton Inn, Homewood Suites,
        Courtyard by Marriott and Fairfield Inn.

2. BASIS OF PRESENTATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated balance sheet at December 31, 1998, has
        been derived from the audited balance sheet at that date. The
        consolidated balance sheet at June 30, 1999, and the
        consolidated statements of operations for the three and six
        months ended June 30, 1999, the three months ended
        June 30, 1998, and the period from Inception through
        June 30, 1998, and the statements of cash flows for the six
        months ended June 30, 1999, and the period from Inception
        through June 30, 1998, have been prepared by the Company and
         are unaudited. In the opinion of management, all adjustments
        (which include only normal recurring adjustments) necessary to
        present fairly, in all material respects, the financial position
        of the Company as of June 30, 1999, and the results of
        operations and cash flows for the periods presented have been
        made. Interim results are not necessarily indicative of fiscal
        year performance because of seasonal and short-term variations.
|
| | The Company had no operations from March 20, 1998, through
        May 19, 1998. Operations began on May 20, 1998, with
        the lease of the Hampton Inn  Las Vegas. From
        May 20, 1998, to July 28, 1998, the Companys sole
         asset was the leasehold interest in the Hampton Inn 
        Las Vegas; therefore, the statements of operations and cash flows
         presented for the Company for the three months ended
        June 30, 1998, and the period from Inception through
        June 30, 1998, are not indicative of the Companys
        future performance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | Certain information and footnote disclosures normally included in
         financial statements presented in accordance with generally
        accepted accounting principles have been condensed or omitted.
        The Company believes the disclosures made are adequate to make
        the information presented not misleading. However, the
        consolidated financial statements contained in this report should
         be read in conjunction with the consolidated financial
        statements and notes thereto included in the Companys
        Annual Report on Form 10-K for the year ended
        December 31, 1998.                                                                                                                                                                                                                                                                                                                                                                                                                                                               

7



---



BRISTOL HOTELS & RESORTS


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

3. FELCOR NOTES



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On June 1, 1999, the Company advanced an additional
        $5 million to FelCor. The Company cancelled FelCors
        existing $4.1 million note and issued a new
        $9.1 million note. The new note bears interest at LIBOR plus
         125 basis points (6.43% as of June 30, 1999) and is due
        upon five days notice from the Company. This note, together with
        the note issued to FelCor in the first quarter of 1999 of
        approximately $1.3 million, (collectively the FelCor
        Notes) brings the amount owed to the Company by FelCor to
        approximately $10.4 million.

4. INVESTMENT IN MANAGEMENT CONTRACTS



| |                                                                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company amended its management agreement for the Holiday
        Inn  Nashville Vanderbilt to extend the term of the
        contract from July 2003 to July 2008. The Company contributed
        $400,000 towards a renovation of the hotel in the second quarter
        of 1999 in connection with the extension.
|
| | In April 1999, the Company received a termination fee of
        $1.2 million for the Holiday Inn  Hollywood. This
         amount, net of $840,000 unamortized investment in the management
         contract, was recognized as management fee income in the second
        quarter of 1999.                           

5. EARNINGS PER SHARE



| |                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following table reconciles the computation of basic earnings
        per share to diluted earnings per share for the three and six
        months ended June 30, 1999:

|                                  |                                         |                  |   |        |  |           |  |            |  |  |   |      | 
|--------------------------------- | --------------------------------------- | ---------------- | - | ------ |  | --------- |  | ---------- |  |  | - | ---- | 
|                                  |                                         |                  |   |        |  | Per Share
|                                  |                                         | Net Income       |   | Shares |  | Amount   
|                                  |                                         |                  |   |        |  |          
|                                  |                                         | ($ in thousands) |   |        |  |          
|                                 
|                                 
|                                 
|                                 
|Three months ended June 30, 1999: |                                         |                  |   |        |  |           |  |            |  |  |   |     
|                                 
|                                 
|                                 
|                                 
|                                  | Net income per share                    |                  | $ | 4,501  |  |           |  | 17,781,476 |  |  | $ | 0.25 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Effect of options                       |                  |   |       |  |           |  | 340,453    |  |  |   |     | 
|                                  |                                         |                  |   |        |  |           |  |            |  |  |   |     
|                                  | Net income per share, assuming dilution |                  | $ | 4,501  |  |           |  | 18,121,929 |  |  | $ | 0.25 | 
|                                  |                                         |                  |   |        |  |           |  |            |  |  |   |     
|Six months ended June 30, 1999:   |                                         |                  |   |        |  |           |  |            |  |  |   |     
|                                 
|                                 
|                                 
|                                 
|                                  | Net income per share                    |                  | $ | 5,617  |  |           |  | 17,780,118 |  |  | $ | 0.32 | 
|                                 
|                                 
|                                 
|                                 
|                                  | Effect of options                       |                  |   |       |  |           |  | 302,030    |  |  |   |     | 
|                                  |                                         |                  |   |        |  |           |  |            |  |  |   |     
|                                  | Net income per share, assuming dilution |                  | $ | 5,617  |  |           |  | 18,082,148 |  |  | $ | 0.31 | 
|                                  |                                         |                  |   |        |  |           |  |            |  |  |   |     



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Outstanding options to purchase shares of common stock, where the
         options exercise prices were greater than the average
        market price of the common shares for the time reported, are
        excluded from the above computation of diluted weighted average
        outstanding shares. For the three and six months ended
        June 30, 1999, 30,000 options were excluded from the
        computation for each period.
|
| | The Company was a wholly-owned subsidiary of Bristol Hotel
        Company until July 28, 1998; therefore, no earnings per
        share calculations are presented for the period from Inception
        through June 30, 1998.                                                                                                                                                                                                               

8



---



BRISTOL HOTEL COMPANY (PREDECESSOR)

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED JUNE 30, 1998



|                                                                                    |                                    |                                  |               |         |        |         | 
|----------------------------------------------------------------------------------- | ---------------------------------- | -------------------------------- | ------------- | ------- | ------ | ------- | 
|REVENUE                                                                             |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Rooms                              |                                  | $             | 139,244 |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Food and beverage                  |                                  |               | 31,782  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Management fees                    |                                  |               | 1,940   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Other                              |                                  |               | 9,192   |       
|                                                                                    |                                    |                                  |               |        
|                                                                                    |                                    |                                  | Total revenue |         |        | 182,158 | 
|                                                                                    |                                    |                                  |               |        
|OPERATING COSTS AND EXPENSES                                                        |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Departmental expenses:             |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Rooms                            |               |         | 39,096 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Food and beverage                |               |         | 24,577 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Other                            |               |         | 2,330  |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Undistributed operating expenses:  |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Administrative and general       |               |         | 17,114 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Marketing                        |               |         | 12,627 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Property occupancy costs         |               |         | 26,906 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Depreciation and amortization    |               |         | 14,013 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Corporate expense                |               |         | 8,717  |        
|                                                                                    |                                    |                                  |               |        
|Operating income                                                                    |                                    |                                  | 36,778        |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Other (income) expense:                                                             |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Interest expense                   |                                  |               | 12,562  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Equity in income of joint ventures |                                  |               | (832    | )     
|                                                                                    |                                    |                                  |               |        
|Income before income taxes and extraordinary item                                   |                                    |                                  | 25,048        |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Income taxes                                                                        |                                    |                                  | 10,019        |        
|                                                                                    |                                    |                                  |               |        
|Income before extraordinary item                                                    |                                    |                                  | 15,029        |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Extraordinary loss on early extinguishment of debt, net of tax                      |                                    |                                  | (25,689       | )      
|                                                                                    |                                    |                                  |               |        
|Net loss                                                                            |                                    | $                                | (10,660       | )      
|                                                                                    |                                    |                                  |               |        
|Earnings (loss) per common and common equivalent share:                             |                                    |                                  |               |        
|                                                                                    | Basic                              |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Income before extraordinary item |               | $       | 0.34   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Extraordinary loss, net of tax   |               |         | (0.58  | )      
|                                                                                    |                                    |                                  |               |        
|                                                                                    |                                    | Net loss                         |               | $       | (0.24  | )      
|                                                                                    |                                    |                                  |               |        
|                                                                                    | Diluted                            |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Income before extraordinary item |               | $       | 0.33   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Extraordinary loss, net of tax   |               |         | (0.56  | )      
|                                                                                    |                                    |                                  |               |        
|                                                                                    |                                    | Net loss                         |               | $       | (0.23  | )      
|                                                                                    |                                    |                                  |               |        
|Weighted average number of common and common equivalent shares
        outstanding: |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Basic                              |                                  |               | 44,780  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Diluted                            |                                  |               | 45,606  |       

The accompanying notes are an integral part of these consolidated
 financial statements.

9



---



BRISTOL HOTEL COMPANY (PREDECESSOR)

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 1998



|                                                                                    |                                    |                                  |               |         |        |         | 
|----------------------------------------------------------------------------------- | ---------------------------------- | -------------------------------- | ------------- | ------- | ------ | ------- | 
|REVENUE                                                                             |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Rooms                              |                                  | $             | 259,616 |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Food and beverage                  |                                  |               | 59,833  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Management fees                    |                                  |               | 3,456   |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Other                              |                                  |               | 18,056  |       
|                                                                                    |                                    |                                  |               |        
|                                                                                    |                                    |                                  | Total revenue |         |        | 340,961 | 
|                                                                                    |                                    |                                  |               |        
|OPERATING COSTS AND EXPENSES                                                        |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Departmental expenses:             |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Rooms                            |               |         | 72,521 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Food and beverage                |               |         | 45,817 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Other                            |               |         | 4,786  |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Undistributed operating expenses:  |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Administrative and general       |               |         | 32,851 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Marketing                        |               |         | 24,007 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Property occupancy costs         |               |         | 51,379 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Depreciation and amortization    |               |         | 26,918 |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Corporate expense                |               |         | 15,008 |        
|                                                                                    |                                    |                                  |               |        
|Operating income                                                                    |                                    |                                  | 67,674        |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Other (income) expense:                                                             |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Interest expense                   |                                  |               | 25,075  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Equity in income of joint ventures |                                  |               | (1,386  | )     
|                                                                                    |                                    |                                  |               |        
|Income before income taxes and extraordinary item                                   |                                    |                                  | 43,985        |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Income taxes                                                                        |                                    |                                  | 17,595        |        
|                                                                                    |                                    |                                  |               |        
|Income before extraordinary item                                                    |                                    |                                  | 26,390        |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|Extraordinary loss on early extinguishment of debt, net of tax                      |                                    |                                  | (25,689       | )      
|                                                                                    |                                    |                                  |               |        
|Net income                                                                          |                                    | $                                | 701           |        
|                                                                                    |                                    |                                  |               |        
|Earnings (loss) per common and common equivalent share:                             |                                    |                                  |               |        
|                                                                                    | Basic                              |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Income before extraordinary item |               | $       | 0.60   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Extraordinary loss, net of tax   |               |         | (0.58  | )      
|                                                                                    |                                    |                                  |               |        
|                                                                                    |                                    | Net income                       |               | $       | 0.02   |        
|                                                                                    |                                    |                                  |               |        
|                                                                                    | Diluted                            |                                  |               |         |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Income before extraordinary item |               | $       | 0.59   |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    |                                    | Extraordinary loss, net of tax   |               |         | (0.57  | )      
|                                                                                    |                                    |                                  |               |        
|                                                                                    |                                    | Net income                       |               | $       | 0.02   |        
|                                                                                    |                                    |                                  |               |        
|Weighted average number of common and common equivalent shares
        outstanding: |                                    |                                  |               |        
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Basic                              |                                  |               | 44,252  |       
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                   
|                                                                                    | Diluted                            |                                  |               | 45,073  |       

The accompanying notes are an integral part of these consolidated
 financial statements.

10



---



BRISTOL HOTELS COMPANY (PREDECESSOR)

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 1998



|                                                 |                                                                                           |                                                            |                                       |          |        |          |  
|------------------------------------------------ | ----------------------------------------------------------------------------------------- | ---------------------------------------------------------- | ------------------------------------- | -------- | ------ | -------- | -
|                                                
|                                                
|                                                
|                                                
|CASH FLOWS FROM OPERATING ACTIVITIES:            |                                                                                           |                                                            |                                       |         
|                                                
|                                                
|                                                
|                                                
|                                                 | Net income                                                                                |                                                            | $                                     | 701      |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net income to net cash provided by
        operating activities: |                                                            |                                       |          |       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                           | Depreciation and amortization                              |                                       |          | 26,918 |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                           | Amortization of deferred financing costs                   |                                       |          | 1,543  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                           | Equity in earnings of joint ventures                       |                                       |          | (1,386 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                           | Non-cash portion of foreign currency translation           |                                       |          | (716   | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                           | Non-cash portion of extraordinary item, net of tax         |                                       |          | 5,095  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                                           | Compensation expense recognized for employee stock options |                                       |          | 104    |         
|                                                
|                                                
|                                                
|                                                
|                                                 | Changes in working capital                                                                |                                                            |                                       | (2,250   | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Increase in advance deposits                                                              |                                                            |                                       | 846      |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Decrease in restricted cash                                                               |                                                            |                                       | 1,376    |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Deferred income tax provision                                                             |                                                            |                                       | 3,677    |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Distribution from joint ventures                                                          |                                                            |                                       | 655      |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Increase in other liabilities                                                             |                                                            |                                       | 273      |       
|                                                 |                                                                                           |                                                            |                                       |         
|                                                 |                                                                                           |                                                            | Cash provided by operating activities |          |        | 36,836   |  
|                                                 |                                                                                           |                                                            |                                       |         
|CASH FLOWS USED IN INVESTING ACTIVITIES:         |                                                                                           |                                                            |                                       |         
|                                                
|                                                
|                                                
|                                                
|                                                 | Improvements to property and equipment                                                    |                                                            |                                       | (91,265  | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Purchase of property and equipment                                                        |                                                            |                                       | (9,000   | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Sale of property and equipment                                                            |                                                            |                                       | 4,750    |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Omaha Acquisition and related costs (net of assumed debt)                                 |                                                            |                                       | (20,043  | )     
|                                                 |                                                                                           |                                                            |                                       |         
|                                                 |                                                                                           |                                                            | Cash used in investing activities     |          |        | (115,558 | )
|                                                 |                                                                                           |                                                            |                                       |         
|CASH FLOWS FROM FINANCING ACTIVITIES:            |                                                                                           |                                                            |                                       |         
|                                                
|                                                
|                                                
|                                                
|                                                 | Repayments of long-term debt                                                              |                                                            |                                       | (9,493   | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Repayment of debt assumed in Omaha Acquisition                                            |                                                            |                                       | (25,329  | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Borrowings under the FelCor Facility                                                      |                                                            |                                       | 120,000  |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Repayment of Senior Notes                                                                 |                                                            |                                       | (30,000  | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from BT loan                                                                     |                                                            |                                       | 455,000  |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Repayment of Nomura Credit Facility                                                       |                                                            |                                       | (455,000 | )     
|                                                
|                                                
|                                                
|                                                
|                                                 | Proceeds from exercise of employee stock options                                          |                                                            |                                       | 1,631    |       
|                                                
|                                                
|                                                
|                                                
|                                                 | Increase in deferred charges and other non-current assets                                 |                                                            |                                       | (3,222   | )     
|                                                 |                                                                                           |                                                            |                                       |         
|                                                 |                                                                                           |                                                            | Cash used in financing activities     |          |        | 53,587   |  
|                                                 |                                                                                           |                                                            |                                       |         
|Net decrease in cash and cash equivalents        |                                                                                           |                                                            | (25,135                               | )       
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of period |                                                                                           |                                                            | 86,167                                |         
|                                                 |                                                                                           |                                                            |                                       |         
|Cash and cash equivalents at end of period       |                                                                                           | $                                                          | 61,032                                |         
|                                                 |                                                                                           |                                                            |                                       |         

The accompanying notes are an integral part of these consolidated
 financial statements.

11



---



BRISTOL HOTEL COMPANY (PREDECESSOR)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Bristol Hotel Company (the Predecessor or
        BHC) was a Delaware corporation which was
        incorporated in November 1994 and began operations after the
        acquisitions of Harvey Hotel Company, Ltd. and its subsidiaries
        and United Inns, Inc. BHC was merged with FelCor Lodging Trust
        Incorporated (FelCor) on July 27, 1998.                                                                                                                                                                                                                                                                                                      
|
| | At June 30, 1998, the Predecessor owned 107 hotels and
        managed 15 additional hotels, two of which were owned by joint
        ventures in which the Predecessor owned a 50% interest. The
        properties, which contain approximately 32,700 rooms, are located
         in 22 states, the District of Columbia and Canada.                                                                                                                                                                                                                                                                                                                                    
|
| | The consolidated statements of operations and cash flows for the
        three and six months ended June 30, 1998, have been prepared
         by the Predecessor and are unaudited. In the opinion of
        management, all adjustments (which include only normal recurring
        adjustments) necessary to present fairly, in all material
        respects, the results of operations and cash flows for the three
        and six months ended June 30, 1998, have been made. Interim
        results are not necessarily indicative of fiscal year performance
         because of seasonal and short-term variations.                                           
|
| | Certain information and footnote disclosures normally included in
         financial statements presented in accordance with generally
        accepted accounting principles have been condensed or omitted.
        The Predecessor believes the disclosures made are adequate to
        make the information presented not misleading. However, the
        consolidated financial statements contained in this report should
         be read in conjunction with the Predecessors consolidated
        financial statements and notes thereto included in Bristol
        Hotels & Resorts Annual Report on Form 10-K
        for the year ended December 31, 1998.

2. LONG-TERM DEBT AND EXTRAORDINARY ITEMS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 21, 1998, the Predecessor entered into an interim
        credit facility with FelCor pursuant to which the Predecessor
        could borrow up to $120 million (the FelCor
        Facility). The FelCor Facility bears interest at a rate of
        LIBOR plus 2% and matures on December 31, 2003. As of
        June 30, 1998, the Predecessor had borrowed the entire
        $120 million available under this credit facility.                                                                                                                                                                                                                                                       
|
| | On May 11, 1998, the Predecessor refinanced
        $455 million of the Nomura Credit Facility with a new
        $455 million loan from Bankers Trust Company (the
        BT Loan). The BT Loan is secured by a pledge of
        stock in the subsidiaries of BHC, bears interest at LIBOR plus
        1- 3/4% and matures on May 11, 2001. The Predecessor
        incurred approximately $33.1 million in yield maintenance
        costs and prepayment penalties related to the payoff of the
        existing facility which, along with $6.9 million of deferred
         financing charges, resulted in an extraordinary loss of
        $40.1 million ($24.0 million, net of tax) in 1998.
|
| | On June 15, 1998, the Predecessor prepaid the remaining
        $30 million of its 11.22% Senior Notes, and recognized an
        extraordinary loss of $2.8 million ($1.7 million, net
        of tax). The Predecessor paid $1.2 million in prepayment
        penalties and wrote-off $1.6 million of deferred financing
        fees and unamortized discount related to the Senior Notes.                                                                                                                                                                                                                                                                                                          

12



---



BRISTOL HOTEL COMPANY (PREDECESSOR)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

3. ACQUISITIONS AND DISPOSITIONS



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 21, 1998, BHC acquired the 187-room Sheraton Four
        Points Hotel in Leominster, Massachusetts for $9.0 million.
        The purchase price was funded with borrowings from the FelCor
        Facility.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | On April 30, 1998, BHC acquired 20 midwestern hotels (the
        Omaha Acquisition). The total consideration for these
         assets was $40 million of assumed debt (of which
        $25.3 million was paid off at closing), $20 million in
        cash and 1.43 million shares of BHCs common stock. The
         portfolio consists of nine full-service Holiday Inns, five
        Holiday Inn Express hotels, five Hampton Inns and one Homewood
        Suites, with locations in Omaha, Nebraska; Moline, Illinois;
        Davenport, Iowa; Central Kansas and Midland/ Odessa, Texas. BHC
        funded the cash portion of the purchase price and the
        $25.3 million of debt prepayments with borrowings under the
        FelCor Facility.
|
| | On June 9, 1998, BHC sold the 200 room Holiday
        Inn  Winter Park, in Orlando, Florida for
        $4.75 million. The net proceeds of the sale were applied to
        the BT Loan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

4. EARNINGS PER SHARE



| |                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following table reconciles the computation of basic earnings
        per share to diluted earnings per share for the three months and
        six months ended June 30, 1998:

|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |       |  
|--------------------------------- | ------------------------------------------------------------ | ---------------- | - | ------- | - | --------- |  | ---------- |  |  | - | ----- | -
|                                  |                                                              |                  |   |         |   | Per Share
|                                  |                                                              | Net Income       |   | Shares  |   | Amount   
|                                  |                                                              |                  |   |         |   |          
|                                  |                                                              | ($ in thousands) |   |         |   |          
|                                 
|                                 
|                                 
|                                 
|Three months ended June 30, 1998: |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                 
|                                 
|                                 
|                                 
|                                  | Income before extraordinary item per share                   |                  | $ | 15,029  |   |           |  | 44,779,696 |  |  | $ | 0.34  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Effect of options                                            |                  |   |        |   |           |  | 826,281    |  |  |   |      |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                  | Income before extraordinary item per share assuming dilution |                  | $ | 15,029  |   |           |  | 45,605,977 |  |  | $ | 0.33  |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                  | Net loss per share                                           |                  | $ | (10,660 | ) |           |  | 44,779,696 |  |  | $ | (0.24 | )
|                                 
|                                 
|                                 
|                                 
|                                  | Effect of options                                            |                  |   |        |   |           |  | 826,281    |  |  |   |      |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                  | Net loss per share, assuming dilution                        |                  | $ | (10,660 | ) |           |  | 45,605,977 |  |  | $ | (0.23 | )
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|Six months ended June 30, 1998:   |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                 
|                                 
|                                 
|                                 
|                                  | Income before extraordinary item per share                   |                  | $ | 26,390  |   |           |  | 44,252,162 |  |  | $ | 0.60  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Effect of options                                            |                  |   |        |   |           |  | 820,901    |  |  |   |      |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                  | Income before extraordinary item per share assuming dilution |                  | $ | 26,390  |   |           |  | 45,073,063 |  |  | $ | 0.59  |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                  | Net income per share                                         |                  | $ | 701     |   |           |  | 44,252,162 |  |  | $ | 0.02  |  
|                                 
|                                 
|                                 
|                                 
|                                  | Effect of options                                            |                  |   |        |   |           |  | 820,901    |  |  |   |      |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      
|                                  | Net income per share, assuming dilution                      |                  | $ | 701     |   |           |  | 45,073,063 |  |  | $ | 0.02  |  
|                                  |                                                              |                  |   |         |   |           |  |            |  |  |   |      



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Outstanding options to purchase shares of common stock, where the
         options exercise prices were greater than the average
        market price of the common shares for the time reported, were
        excluded from the above computation of diluted weighted average
        outstanding shares. For the three and six months ended
        June 30, 1998, 122,500 options were excluded from the
        computation for each period.

13



---



BRISTOL HOTEL COMPANY (PREDECESSOR)


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

5. COMPREHENSIVE INCOME



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Due to the Predecessors Canadian operations, it engaged in
        transactions involving foreign currency resulting in negative
        translation adjustments of approximately $836,000 and $430,000
        for the three and six months ended June 30, 1998. For the
        three months ended June 30, 1998, comprehensive loss was
        $11.5 million. Comprehensive income was $271,000 for the six
         months ended June 30, 1998. There were no other
        comprehensive income items for the three and six months ended
        June 30, 1998.

14



---



BRISTOL HOTELS & RESORTS

MANAGEMENTS DISCUSSION AND ANALYSIS OF


RESULTS OF OPERATIONS AND FINANCIAL CONDITION


FORWARD-LOOKING STATEMENTS

Certain matters discussed in this Form 10-Q are
forward-looking statements and information that are based on the
Companys current views and assumptions concerning future
events. Forward-looking statements are typically identified by
the words believe, expect,
anticipate, intend, estimate,
 project and similar expressions. These statements
are subject to risks and uncertainties that could cause the
Companys actual operations and results of operations to
differ materially from those reflected in such forward-looking
statements.

Forward-looking statements are not guarantees of future
performance and are subject to the Company achieving its business
 strategy and the costs and expected benefits of that strategy
and having sufficient cash flow and other sources of cash to fund
 its lease payments, debt service requirements, working capital
needs and other significant expenditures. Forward-looking
statements are also based on what the Company anticipates future
trends in the lodging industry will be and how those will be
affected by industry capacity, the seasonal nature of the lodging
 industry, product demand and pricing and the other matters
referred to from time to time in the Companys filings with
the Securities and Exchange Commission. The Company undertakes no
 obligation to publicly release the results of any revisions to
these forward looking statements that may be made to reflect any
future events or circumstances.

OVERVIEW

Bristol Hotels & Resorts

Results of operations for the three and six months ended
June 30, 1999, reflect the operations of the Companys
leased hotels (101 hotels as of June 30, 1999) and
those hotels operated under management contracts. The Company
managed 13 properties as of the end of the period.

The Companys results of operations from Inception
(March 20, 1998) through June 30, 1998 include the
operations of the Hampton Inn  Las Vegas beginning on
May 20, 1998. Therefore, the operating results of the
Company for the three months ended June 30, 1998 and the
period from Inception through June 30, 1998 are not
indicative of its future performance.

Bristol Hotel Company (Predecessor)

Historical results for the three and six months ended
June 30, 1998, reflect the operations of the 107 hotels
 owned by the Predecessor as of June 30, 1998, and the joint
 venture ownership and/or management of 15 additional
hotels.

Redevelopment and Rebranding Program

The Redevelopment and Rebranding Program started by BHC in
November 1997 and continued by the Company impacted both the
Companys and the Predecessors operating results. The
Redevelopment and Rebranding Program entails exterior and
interior reconstruction of and renovations to a substantial
number of hotels as well as the rebranding of certain hotels
operated under the Companys own brand names. In addition to
 the renovations, the Company expects to rebrand 19 hotels
to the Crowne Plaza or Crowne Plaza Suites brand by the end of
2000. During the second quarter of 1999, the rebranding of one
property to a Crowne Plaza was completed, bringing the total of
hotels converted to the Crowne Plaza brand to 17 hotels. The
 Redevelopment and Rebranding Program is expected to be
substantially complete by the end of 2000.

15



---



Statistical Summary

The following chart reflects the operations of comparable hotels
(Same Store Hotels), which are hotels that were
operated by the Company and its Predecessor during both periods
presented, and excluding one hotel that is being marketed for
sale by the owner. This information is presented on a pro forma
basis, as if the acquisition of 20 Midwestern hotels on
April 30, 1998 had occurred on January 1 of each period
 presented.

|                     |            |         |  |                 |  |                 |  |        |   |      |   |        |  |        |   |       |  |        |  |        |   |  |   |       |  |  |   |       |  |  |  |         |  |  |  |      |   |  |  |      |  
|-------------------- | ---------- | ------- |  | --------------- |  | --------------- |  | ------ | - | ---- | - | ------ |  | ------ | - | ----- |  | ------ |  | ------ | - |  | - | ----- |  |  | - | ----- |  |  |  | ------- |  |  |  | ---- | - |  |  | ---- | -
|                     |            |         |  |                 |  |                 |  |        |   |      |   |       
|                     |            | Average |  | 2ndQuarter 1999 |  | 2ndQuarter 1998 |  | Occ    |   |      |   |       
|                     |            | Hotel   |  |                 |  |                 |  | Chg.   |   | Rate |   | RevPAR
|                     |            | Rooms   |  | Occ             |  | Rate            |  | RevPAR |   | Occ  |   | Rate   |  | RevPAR |   | (pp)  |  | % Chg. |  | % Chg.
|                     |            |         |  |                 |  |                 |  |        |   |      |   |        |  |        |   |       |  |        |  |       
|Same Store Hotels(1) |            |         |  |                 |  |                 |  |        |   |      |   |        |  |        |   |       |  |        |  |        |   |  |   |       |  |  |   |       |  |  |  |         |  |  |  |      |   |  |  |     
|                     | Leased(2)  |         |  | 15,762          |  |                 |  | 70.7   | % |      | $ | 83.90  |  |        | $ | 59.32 |  |        |  | 72.4   | % |  | $ | 81.63 |  |  | $ | 59.10 |  |  |  | -1.7pp  |  |  |  | 2.8  | % |  |  | 0.4  | %
|                     | Managed(3) |         |  | 1,160           |  |                 |  | 76.7   | % |      | $ | 87.17  |  |        | $ | 66.86 |  |        |  | 77.9   | % |  | $ | 83.25 |  |  | $ | 64.85 |  |  |  | -1.2pp  |  |  |  | 4.7  | % |  |  | 3.1  | %
|                    
|                    
|                    
|                    
|1998 Redevelopment   |            |         |  |                 |  |                 |  |        |   |      |   |        |  |        |   |       |  |        |  |        |   |  |   |       |  |  |   |       |  |  |  |         |  |  |  |      |   |  |  |     
|                     | Leased(2)  |         |  | 6,256           |  |                 |  | 72.1   | % |      | $ | 99.84  |  |        | $ | 71.98 |  |        |  | 64.4   | % |  | $ | 89.44 |  |  | $ | 57.60 |  |  |  | 7.7pp   |  |  |  | 11.6 | % |  |  | 25.0 | %
|                    
|                    
|                    
|                    
|1999 Redevelopment   |            |         |  |                 |  |                 |  |        |   |      |   |        |  |        |   |       |  |        |  |        |   |  |   |       |  |  |   |       |  |  |  |         |  |  |  |      |   |  |  |     
|                     | Leased(2)  |         |  | 4,559           |  |                 |  | 61.8   | % |      | $ | 80.74  |  |        | $ | 49.90 |  |        |  | 73.3   | % |  | $ | 74.23 |  |  | $ | 54.41 |  |  |  | -11.5pp |  |  |  | 8.8  | % |  |  | -8.3 | %
|                    
|                    
|                    
|                    
|Total                |            |         |  |                 |  |                 |  |        |   |      |   |        |  |        |   |       |  |        |  |        |   |  |   |       |  |  |   |       |  |  |  |         |  |  |  |      |   |  |  |     
|                     | Leased(2)  |         |  | 26,577          |  |                 |  | 69.5   | % |      | $ | 87.31  |  |        | $ | 60.68 |  |        |  | 70.7   | % |  | $ | 82.00 |  |  | $ | 57.97 |  |  |  | -1.2pp  |  |  |  | 6.5  | % |  |  | 4.7  | %
|                     | Managed(3) |         |  | 1,160           |  |                 |  | 76.7   | % |      | $ | 87.17  |  |        | $ | 66.86 |  |        |  | 77.9   | % |  | $ | 83.25 |  |  | $ | 64.85 |  |  |  | -1.2pp  |  |  |  | 4.7  | % |  |  | 3.1  | %

Notes



|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(1) | Same Store Hotels excludes hotels undergoing
        renovation during the second quarter 1998 or 1999.                               
|   
|(2) | Canadian assets have been adjusted to remove the
        effect of period-to-period exchange rate fluctuations.                       
|   
|(3) | Excludes recently terminated contracts and those
        that are being marketed for sale by the owner (five assets in
        total).

The hotels which underwent redevelopment in 1998 have shown
significant improvements in 1999 compared to the same period in
1998 as detailed above. The improvement in the hotels redeveloped
 in 1998 is offset by the disruptions caused by the Redevelopment
 and Rebranding Program to the 19 properties undergoing
redevelopment during the six months ended June 30, 1999.
Because of the number of hotels undergoing redevelopment in the
periods presented, the statistics for the Same-Store Hotels are
not representative of the Companys portfolio. In the second
 quarter of 1999, 2.1% of total available rooms, totaling
approximately 58,144 rooms nights, were out of service as a
result of the Redevelopment and Rebranding Program. However, 18
hotels experienced disruptions to their public spaces, such as
meeting rooms, lobby areas and restaurants, or exteriors during
the quarter, which had a negative impact on group and transient
sales for the period. For the six months ended June 30,
1999, 3.7% of the Companys total available rooms, or
approximately 207,507 room nights, were out of service due to the
 Redevelopment and Rebranding Program. Several of these hotels
are located in major markets such as Chicago, Illinois; Orlando,
Tampa and Cocoa Beach, Florida; Pittsburgh, Pennsylvania; and San
 Francisco, California. In May 1999, the Company reopened its
newly redeveloped flagship hotel, the 443 room Allerton Crowne
Plaza, located on Chicagos Magnificent Mile.

RESULTS OF OPERATIONS

Bristol Hotels & Resorts

Three Months Ended June 30, 1999

The Redevelopment and Rebranding Program had a significant impact
 on the Companys operations during the quarter. Rooms
revenue was $147.8 million for the three months ended
June 30, 1999. Rooms profit margin was 71.7% for the period.
 Food and beverage revenue was $35.9 million for the three
months ended June 30, 1999. Food and beverage profit margin
was 22.1% during the period. As discussed above, several of the
Companys significant major market hotels were undergoing or
 just emerging from redevelopment and in a ramp-up period.
Operating margins during the redevelopment and ramp-up periods
tend be lower than during normal operating periods.

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Management fee income was $1.6 million for the quarter ended
 June 30, 1999. Of this amount, $336,000 (net of unamortized
 acquisition costs) is the termination fee for the Holiday
Inn  Hollywood. The Company had 13 management
contracts as of June 30, 1999.

Construction management fees for the three months ended
June 30, 1999, were $1.0 million. These fees are
charged to hotel owners for purchasing and project management
services provided by the Company for construction projects,
including the Redevelopment and Rebranding Program, calculated as
 a percentage of total costs. During the quarter ended
June 30, 1999, 18 hotels were undergoing redevelopment.

Property occupancy costs include normal hotel operating costs,
but do not include property taxes, ground rent and property
insurance. Under the terms of the leases, these costs are the
responsibility of the hotel owner. Property occupancy costs were
$16.3 million for the three months ended June 30, 1999.
 Of this amount, approximately $7.4 million represented
utility costs.

Corporate expense was $4.8 million for the three months
ended June 30, 1999. This amount includes the costs of the
Companys support functions at its corporate office, public
company costs such as stock exchange fees and costs related to
corporate development and growth opportunities.

Tenant lease expense was $61.7 million for the three months
ended June 30, 1999. This amount represents lease payments
to property owners (primarily FelCor) under long-term lease
agreements.

EBITDA (earnings before interest, taxes, depreciation and
amortization) was $7.9 million for the three months ended
June 30, 1999. EBITDA margin (EBITDA divided by total
revenues) was 4.0% for the period. Net income was
$4.5 million for the three months ended June 30, 1999.

Six Months Ended June 30, 1999

Rooms revenue was $279.5 million for the six months ended
June 30, 1999. Rooms profit margin was 71.3% for the period.
 Food and beverage revenue was $69.1 million for the six
months ended June 30, 1999. Food and beverage profit margin
was 22.1% during the period. The Redevelopment and Rebranding
Program, which caused disruptions to 19 of the Companys
hotels during this period, had a significant impact on these
results.

Management fee income was $2.5 million for the six months
ended June 30, 1999. During the six month period, the
Company added two new contracts, the Holiday Inn Express in
Cambridge, Massachusetts and the Hampton Inn in Sault St. Marie,
Michigan. As discussed earlier, the Company extended the term of
the Holiday Inn  Vanderbilt management contract, and
ceased managing two properties during the period. The Company had
 13 management contracts as of June 30, 1999.

Construction management fees for the six months ended
June 30, 1999, were $2.4 million. During the six months
 ended June 30, 1999, fees were charged to property owners
for 19 hotels undergoing redevelopment, as well as for various
capital projects.

Tenant lease expense was $113.8 million for the six months
ended June 30, 1999. Property occupancy costs were
$32.4 million for the six months ended June 30, 1999.
Corporate expense was $11.3 million for the six months ended
 June 30, 1999.

EBITDA was $10.1 million for the six months ended
June 30, 1999. EBITDA margin was 2.7% for the period. Net
income was $5.6 million for the six months ended
June 30, 1999.

Bristol Hotel Company (Predecessor)

Three Months and Six Months Ended June 30, 1998

Rooms revenue was $139.2 million and $259.6 million for
 the quarter and six months ended June 30, 1998,
respectively. Rooms profit margin was 71.2% and 72.1% for the
three and six month periods,

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Food and beverage revenue was $31.8 million and
$59.8 million for the three and six months ended
June 30, 1998, respectively. Food and beverage profit margin
 was 22.7% for the three months, and 23.4% for the six month
period.

Management fee income was $1.9 million and $3.5 million
 for the three and six months ended June 30, 1998,
respectively. The Predecessor had 15 management contracts during
the period, including two contracts for properties owned by
entities in which the Predecessor held a 50% joint venture
interest.

Property occupancy costs of approximately $26.9 million and
$51.3 million for the three and six months ended
June 30, 1998, respectively, include normal hotel operating
costs, as well as property tax, ground rent and property
insurance. Property tax, ground rent, and property insurance
became the obligation of the hotel owner after Spin-off.

Depreciation and amortization was $14.0 million and
$26.9 million for the three and six months ended
June 30, 1998, respectively. This amount included the
depreciation of all of the Predecessors hotels and their
furnishings, as well as the property and equipment in the
Predecessors corporate office.

Corporate expenses of $8.7 million and $15.0 million
for the three and six months ended June 30, 1998,
respectively, included approximately $2.8 million of costs
related to the merger of BHC with FelCor and the Spin-off of
Bristol Hotels & Resorts.

Interest expense was $12.6 million and $25.1 million
for the three and six months ended June 30, 1998,
respectively. This amount is attributable to the
Predecessors approximately $813.4 million of debt
outstanding as of June 30, 1998.

Income of joint ventures of $832,000 for the quarter and
$1.4 million for the six months ended June 30, 1998
reflected the Predecessors 50% interest in the earnings of
two joint ventures.

The Predecessor recognized $25.7 million of extraordinary
loss on the early retirement of the Nomura Credit Facility and
its Senior Notes in the quarter ended June 30, 1998. Please
refer to Note 2 of the Predecessors Notes to
Consolidated Financials Statements for further discussion.

For the three months ended June 30, 1998, EBITDA was
$51.6 million, EBITDA margin was 28.3%, and net loss was
$10.7 million. For the six months ended June 30, 1998,
EBITDA was $96.0 million, EBITDA margin was 28.1%, and net
income was $701,000.

LIQUIDITY AND CAPITAL RESOURCES

The Companys principal sources of liquidity are cash on
hand, cash flow from operations, the $10.4 million
outstanding of FelCor Notes and borrowings under the
$40 million revolving credit facility led by Bankers Trust
Company (the Credit Facility). The Company had
approximately $27.6 million of cash on hand at June 30,
 1999. The Company believes that it currently requires
approximately $10 million to $15 million of cash to
fund its day-to-day working capital needs.

The Companys operations generated approximately
$7.6 million of cash flow for the six months ended
June 30, 1999. The Companys cash flows are sensitive
to the performance of the leased and managed properties. For
managed properties, the Companys cash flows are principally
 tied to changes in the gross revenues of the properties. For
leased properties, the Company is impacted both by changes in
gross revenues as well as changes in operating expenses and rent
expense.

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The Company has the ability under the Credit Facility to issue a
standby letter of credit to secure the Companys obligations
 under the leases with FelCor. As of June 30, 1999, Company
had a standby letter of credit outstanding to FelCor of
$9.1 million. This amount may be reduced from time to time
pursuant to the liquid net worth requirements of the leases.

The Company is actively pursuing opportunities for growth through
 additions to its leasehold and management portfolio. It is
possible that some new management contracts or leases could
require a small capital investment on the part of the Company.
The Company has previously announced agreements to manage three
Hilton Garden Inns and a 265-room upscale Hilton Hotel, all of
which are under development. The first of these properties, a
Hilton Garden Inn in Round Rock (Austin), Texas, is scheduled to
open in October 1999. The remaining properties are scheduled to
open in 2000. Additionally, the Company announced a lease
agreement entered into during the quarter with an entity that
will be owned 15% by the Company and 85% collectively by two
other parties, Winston Hotels, Inc. and Regent Partners, Inc.,
for a 158-room Hilton Garden Inn located in Windsor, CT. The
hotel is currently under development and opening is scheduled for
 the second half of 2000.

The Company is continuously exploring opportunities for
increasing efficiency at the hotels and the corporate office.
Some of these opportunities could require small capital
investments by the Company to achieve the targeted savings, such
as the development and installation of the Companys wide
area network, and the installation of $3.5 million of
energy-saving devices throughout 52 of its leased hotels. The
Company has spent $753,000 on this capital project through
June 30,1999, and expects to complete the installation by
the end of 1999. The Company believes that it has adequate
capital resources to fund its growth opportunities for the
immediate future.

YEAR 2000 READINESS

Since the Company last reported on the status of its
Year 2000 Readiness Program, it is continuing to progress
through the Replace/ Upgrade stage of the non-compliant systems
and has begun work into the final stage, Contingency. The Company
 has completed Year 2000 remediation to the critical
hardware and software systems in 55 hotels with another 49 hotels
 remaining. The remediation work is being completed at a rate of
4 to 6 hotels per week. The project is on schedule and the
Company anticipates the substantial completion of the
Year 2000 Readiness Program by November 1999.

Contingency Planning

The Company has formed a Y2K Contingency Planning Task Force. The
 Task Force has adopted a contingency planning guide for
addressing issues concerning operational and third-party systemic
 issues at the hotel property level. The contingency planning
guide includes, among other actions, manual workarounds and
adjustments to staffing strategies.

Costs

Since the cost of remediation of non-compliant systems are the
responsibility of the property owners, the Company does not
anticipate incurring any material costs. The Company anticipates
spending a total of approximately $350,000 during the remediation
 process, and has incurred approximately $144,000 of these costs
as of June 30, 1999.

Risks

No new risks have been identified by the Company.

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PART II

Item 6. Exhibits and Reports on Form 8-K.



| |     |                                      
| | --- | -------------------------------------
| | (a) | Exhibits                             
| |     | 23.1  Consent of Arthur Andersen LLP.
| |     | 23.2  Consent of Arthur Andersen LLP.
| |     | 27.1  Financial Data Schedule.       
|
| | (b) | Reports on Form 8-K                  
| |     | None.                                

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SIGNATURE

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



| |                         
| | ------------------------
| | BRISTOL HOTELS & RESORTS

|                      |  |                                                                                                            
|--------------------- |  | -----------------------------------------------------------------------------------------------------------
|Date: August 13, 1999 |  | By /s/ John D. BaileyJohn D. Bailey
        Vice President, Controller and Chief
        Accounting Officer

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EXHIBIT INDEX

|        |      |             |  |                                  
|------- | ---- | ----------- |  | ---------------------------------
|Exhibit |      |            
|Number  |      | Description
|        |      |            
|        | 23.1 |             |  |  Consent of Arthur Andersen LLP.
|        | 23.2 |             |  |  Consent of Arthur Andersen LLP.
|        | 27.1 |             |  |  Financial Data Schedule.