WINSTON HOTELS REPORTS SECOND QUARTER

1997 Results 
Business Editors 
RALEIGH, N.C.--(BUSINESS WIRE)--July 28, 1997--Winston Hotels,
Inc. (NASDAQ:WINN), a real estate investment trust and owner of
limited-service and extended-stay hotels, announced results for the
second quarter ended June 30, 1997. 
Second Quarter Performance 
For the second quarter of 1997, funds from operations (FFO) 
increased 50 percent to $7.5 million compared with FFO of
$5.0 million for the second quarter of 1996.  On a per share basis,
FFO decreased 6.4 percent to $0.44 on 17.1 million weighted average
shares outstanding compared with $0.47 on 10.7 million weighted
average shares for the same quarter a year ago. 
Net income for the second quarter of 1997 increased 40 percent to
$4.8 million, or $0.30 per share, compared with net income of $3.4
million, or $0.34 per share for the same quarter a year ago. 
The decline in per share amounts of FFO and net income was due to
the issuance of additional shares during June 1996 having a greater
impact on the 1997 quarter than the 1996 quarter; the slower than
expected ramp up of hotels that have recently gone through major
renovation; the negative impact of poor weather on the Company's
hotels located in coastal areas which rely heavily on tourism; and
increasing competition in several tertiary markets in which the
Company owns hotels. 
Lease revenue increased 42 percent to $9.6 million for the second
quarter of 1997, as compared with $6.8 million for the second quarter
of 1996. 
"While these results fall short of our expectations, we feel
confident the Company is on the appropriate track for long term
growth.  We continue to run the Company with two key goals in mind:
providing an unequaled level of service to our guests and increasing
value to our shareholders," said Bob Winston, president and CEO of 
Winston Hotels, Inc. 
Six Months Performance 
FFO for the six months ended June 30, 1997 increased by 
59 percent to $12.9 million compared with FFO of $8.1 million for the
year-earlier period.  On a per share basis, FFO for the six months
decreased 1.3 percent to $0.76 on 17.1 million weighted average
shares compared with FFO of $0.77 on 10.5 million weighted average
shares for the first six months of 1996. 
Net income for the six months increased by 46 percent to $7.7
million, or $0.49 per share, compared with $5.3 million, or $0.53 per
share, for the same period last year.  Lease revenue for the six
months increased by 48 percent to $16.8 million compared with $11.3
million in 1996. 
Acquisitions and Development 
During the second quarter of 1997, Winston purchased the 215-room
Comfort Suites hotel located in Orlando, Florida.  Since the end
of the quarter, Winston completed the acquisition of two additional
hotels: a 202-room Courtyard by Marriott in northwest Houston, Texas
and a 126-room Hampton Inn located in West Springfield,
Massachusetts.  The Company also entered into a contract to purchase
a 127-room Holiday Inn Express hotel in Clearwater, Florida. 
The Company has previously announced it has four Homewood Suites
hotels and one Marriott Courtyard hotel under development.  It also
has an option to purchase a Homewood Suites hotel that is currently
under development by Promus Hotels Company.  Upon closing of each of
the announced acquisitions and the completion of the hotels currently
under development, the Company would own 41 hotels with approximately
5,400 rooms. 
Return on Investment 
For the 12 months ended June 30, 1997, the Company earned a
14.9 percent pro forma return on its total investment in hotels
(before depreciation).  "With a 14.9 percent pro forma return on the
portfolio, Winston Hotels continues to post one of the highest
returns among hospitality REITs," said Mr. Winston. 
The pro forma return reflects net lease revenue (lease revenues
less property taxes and property insurance) for the 29 hotels that
were open for the entire twelve month period ended June 30, 1997 (as
if the Company owned all 29 hotels for the entire twelve month
period) divided by the Company's investment in those hotels (before
depreciation). 
Room Revenue 
Pro forma room revenue for the Company's 32 properties was $20.8
million for the three-month period ended June 30, 1997, up 10.9
percent from $18.8 million for the same quarter of 1996.  Room
revenue per available room (REVPAR) was $54.01 for the quarter, up
4.2 percent over $51.83 for the previous year period.  Occupancy for
the quarter was 80.8 percent compared with 84.4 percent for the prior
year period. 
Pro forma room revenue was $38.2 million for the six-month period
compared with $34.4 million for the year-earlier period, an increase
of 10.9 percent.  REVPAR for the six months was $49.96, up 4.1
percent from $48.00 the previous year.  Occupancy for the six-month
period was 76.8 percent compared with 80.6 percent the previous year. 
For the 29 hotels that were open during the entire periods, both
for the three and six months ended June 30, 1997 and 1996, room
revenues and related statistics were as follows: 


                  Quarter Ended June 30
                  1997       1996        % Change
Room Revenues/a   $18.7      $18.1       3.4%
Average Daily     $65.95     $61.03      8.1%
Rate
Occupancy         81.1%      84.7%       (4.3%)
REVPAR            $53.46     $51.69      3.4%

(a) $ in millions

                  Six Months Ended June 30
                  1997       1996        % Change
Room Revenues/a   $34.3      $33.6       2.3%
Average Daily     $64.19     $59.25      8.3%
Rate
Occupancy         77.2%      80.9%       (4.6%)
REVPAR            $49.56     $47.93      3.4%

(a) $ in millions

-0-
Dividend Performance 
During the second quarter, Winston Hotels announced its regular
quarterly cash dividend of $0.27, which was paid on July 15, 1997 to
stockholders of record as of July 7, 1997.  The regular quarterly
dividend is equivalent to $1.08 on an annualized basis. 
Forward-Looking Statements 
This press release contains "forward-looking" statements within
the meaning of Section 27A of the Securities Act of 1933, as amended
and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements represent the Company's judgment and are subject to
risks and uncertainties that could cause actual operating results to
differ materially from those expressed or implied in the
forward-looking statements.  From time to time, these risks are
discussed in the company's filings with the Securities and Exchange
Commission.
-0-    Note to Editors: Winston Hotels, Inc. is a Raleigh, North
Carolina-based real estate investment trust specializing in the
acquisition, rehabilitation and development of premium
limited-service and high-end extended hotel properties.  The Company
owns equity interests in 34 hotels totaling 4,570 rooms. 
Additional information on Winston Hotels, Inc. is also available
via the Internet at www.winstonhotels.com .
-0- 



                       Winston Hotels, Inc.

          Unaudited Consolidated Statement of Operations
            ($ in thousands, except per share amounts)

                             Three      Three         Six         Six
                            Months     Months      Months      Months
                             Ended      Ended       Ended       Ended
                           June 30    June 30     June 30     June 30
                              1997       1996        1997        1996

Revenue:
 Percentage lease revenue   $9,622    $ 6,792    $ 16,770    $ 11,332
 Interest and other income      24         21          54          37
 Total revenue               9,646      6,813      16,824      11,369

Expenses:
 Real estate taxes and
  property and casualty        591        375       1,156         695
 General & administrative      492        473         862         897
 Interest expense              996        900       1,811       1,574
 Depreciation                2,348      1,442       4,570       2,609
 Amortization                   41         36          81          67
   Total expenses            4,468      3,226       8,480       5,842

   Income before allocation
    to minority interest     5,178      3,587       8,344       5,527
       
Income allocation to
 minority interest             381        150         611         230
   Net income applicable
    to common shareholders  $4,797    $ 3,437     $ 7,733     $ 5,297

Net income per common
 share                      $ 0.30    $  0.34     $  0.49     $  0.53

Weighted average number
of common shares and
common share
equivalents             17,085,076  10,672,165  17,082,921  10,526,428

Funds from operations      $ 7,526     $ 5,028    $ 12,914     $ 8,135

Funds from operations
 per share                 $  0.44     $  0.47    $   0.76     $  0.77

EBITDA                     $ 8,563     $ 5,965    $ 14,806     $ 9,777

EBITDA per common share    $  0.50     $  0.56    $   0.87     $  0.93

Cash distributions
 per share                 $  0.27     $ 0.225    $   0.54     $ 0.495


                       WINSTON HOTELS, INC.
                    CONSOLIDATED BALANCE SHEETS
                         ($ in thousands)

                              ASSETS

                                   June 30, 1997     December 31, 1996
Investment in hotel properties:
    Land                               $  22,021             $  20,639
    Buildings and improvements           178,603               166,664
    Furniture and equipment               18,686                15,749
    Operating properties                 219,310               203,052
    Less accumulated depreciation         16,078                11,508
                                       ---------              --------
                                         203,232               191,544

    Properties under development          10,583                 5,138
Net investment in hotel properties       213,815               196,682
Cash and cash equivalents                    340                   234
Lease revenue receivable                   7,154                 4,611
Deferred expenses, net                     1,272                 1,362
Prepaid expenses and other assets          1,522                   613
                                       ---------              --------
                                       $ 224,103             $ 203,502



                 LIABILITIES AND SHAREHOLDERS' EQUITY

Due to banks                           $  63,081             $  42,800
Accounts payable and accrued expenses      2,226                 1,799
Distributions payable                      4,613                 4,352
Amounts due to Lessee                      1,668                 1,391
Minority interest in Partnership          11,274                11,347

Shareholders' equity:
       Preferred stock, $.01 par value,
        10,000,000 shares authorized,
        no shares issued and outstanding
       Common stock, $.01 par value,
        50,000,000 shares authorized,
        15,819,580 and 15,799,580
        shares issued and outstanding        158                   158
       Additional paid-in capital        145,416               145,216
       Unearned directors'
         compensation                      (144)                 (181)
       Deficit                           (4,189)               (3,380)
                                      ----------              --------
                                         141,241               141,813
                                      ----------              --------

                                      $  224,103             $ 203,502

 
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