Ashford Hospitality Trust Reports Third Quarter Results

Ashford Hospitality Trust, Inc. (NYSE:AHT) today reported the following results and performance measures for the third quarter ended September 30, 2007. The proforma performance measurements for Occupancy, Average Daily Rate (ADR), revenue per available room (RevPAR), and Hotel Operating Profit (or Hotel EBITDA) include the Company's 114 hotels owned as of September 30, 2007, which excludes 5 hotel assets held for sale as of that date. Unless otherwise stated, all reported results compare the third quarter ended September 30, 2007 with the third quarter ended September 30, 2006. The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

FINANCIAL HIGHLIGHTS

• Total revenue increased 195% to $336.8 million from $114.3 million
• Net loss to common shareholders was $6.6 million, or $0.05 per diluted share
• Adjusted funds from operations (AFFO), excluding gains on sales, increased 56.1% to $34.9 million, or $0.25 per diluted share
• Seasonality for the portfolio has changed from 24.7% of the Hotel EBITDA being produced in the third quarter last year to 23.0% of the Hotel EBITDA being produced in the third quarter this year because of the acquisition of the CNL portfolio. This change created a $0.04 per share variance for the quarter
• Year to date AFFO per diluted share increased 15.1% to $0.99 from $0.86
• Cash available for distribution (CAD) increased 31% to $25.1 million, or $0.18 per diluted share
• Year to date CAD per diluted share increased to $0.78 from $0.76
• Declared quarterly common dividend of $0.21 per diluted share
• CAD dividend coverage was 124% year to date

STRONG INTERNAL GROWTH

• Proforma RevPAR increased 8.3% for hotels not under renovation on a 5.1% increase in ADR to $134.89 and a 233-basis point improvement in occupancy
• Proforma RevPAR increased 7.4% for all hotels on a 5.4% increase in ADR to $135.27 and a 144-basis point improvement in occupancy
• Proforma same-property Hotel Operating Profit for hotels not under renovation improved 11.7%
• Proforma same-property Hotel Operating Profit margin for hotels not under renovation improved 120 basis points

CAPITAL RECYCLING AND ASSET ALLOCATION

• Capex invested in the third quarter totaled $32 million
• Capex for 2007 and 2008 estimated at $280 million for which the Company has adequate resources to fund through continued asset sales, FF&E reserves, and cash flow above our dividend
• Targeted ROI projects for 2008 should approximate $50 million
• Two hotels sold in the third quarter for $10 million and one subsequent to the end of the quarter for $25 million

PORTFOLIO REVPAR GROWTH

As of September 30, 2007, the Company had a portfolio of direct hotel investments consisting of 114 properties classified in continuing operations. During the third quarter, 106 of the hotels included in continuing operations were not under renovation. The Company believes reporting its operating metrics for continuing operations on a proforma total basis (all 114 hotels) and proforma not-under-renovation basis (106 hotels) is a measure that reflects a meaningful and focused comparison of the operating results in its direct hotel portfolio. The Company's reporting by region and brand includes the results of all 114 hotels. Details of each category are provided in the tables attached to this release.

• RevPAR growth by region was led by: West South Central (12 hotels) with a 10.7% increase; Middle Atlantic (10) with 9.3%; South Atlantic (42) with 9.2%; New England (4) with 8.9%; Mountain (8) with 6.5%; Pacific (22) with 6.3%; East South Central (2) with 5.9%; West North Central (3) with 2.4%; East North Central (10) with 1.8%; and Canada (1) with 0.8%
• RevPAR growth by brand was led by: InterContinental (2 hotels) with 13.7%; Hilton (37 hotels) with 9.1%; Marriott (59) with 7.9%; Hyatt (5) with 7.5%; Starwood (7) with 0.1%; Radisson (2) with a 1.6% decrease; and independents (2) with a 19.7% decrease

HOTEL EBITDA MARGINS AND QUARTERLY SEASONALITY TRENDS

For the 106 hotels as of September 30, 2007 that were not under renovation, Proforma Hotel EBITDA (adjusted as if all hotels were included throughout both periods) increased 11.7% to $84.6 million. Proforma Hotel EBITDA margin (expressed as a percentage of Total Hotel Revenue) improved 120 basis points to 26.7%. For all 114 hotels included in continuing operations as of September 30, 2007, Proforma Hotel EBITDA increased 8.8% to $87.9 million and Hotel EBITDA margin increased 74 basis points to 26.0%.

Ashford believes year-over-year Hotel EBITDA and Hotel EBITDA margin comparisons are more meaningful to gauge the performance of the Company’s hotels than sequential quarter-over-quarter comparisons. Given the substantial seasonality in the Company’s portfolio and its active capital recycling, to help investors better understand this seasonality, the Company provides quarterly detail on its Proforma Hotel EBITDA and Proforma Hotel EBITDA margin for the current and certain prior-year periods based upon the number of core hotels in the portfolio as of the end of the current period. As Ashford’s portfolio mix changes from time to time so will the seasonality for Proforma Hotel EBITDA and Proforma Hotel EBITDA margin.

Prior to the acquisition of the 51 CNL assets in April 2007, the Company’s third quarter contributed approximately 24.7% of the annual Hotel EBITDA. For the current portfolio of 114 hotels the Company’s third quarter now contributes approximately 23.0% of the annual Hotel EBITDA. This 170 basis point change is the equivalent of approximately $0.04 per diluted share. The details of the quarterly calculations for the last four quarters for the current portfolio are provided in the tables attached to this release.

Monty J. Bennett, President and CEO, commented, "The internal growth from our portfolio has been a consistent theme for us all year, which was evident once again in the third quarter. With RevPAR growth above the industry average and sustained improvement in operating margins, we are seeing a direct benefit from the previous investments we have made to improve our assets as well as our efforts to concentrate the portfolio in high growth markets with the strongest brands. We intend to place an even greater emphasis on accelerating the returns from some of our recently acquired assets through ROI projects. While we have been pleased with the continued improvement in internal growth, we believe allocating additional capital to several assets in select markets has the potential for even greater returns."

FINANCING ACTIVITY

On July 18, 2007, the Company priced 8,000,000 shares of 8.45% Series D Cumulative Preferred Stock at $25.00 per share. The annual distribution for the preferred stock is $2.1125 per share, payable quarterly. Ashford used the net proceeds of the offering to redeem the Company’s Series C Preferred Stock.

At September 30, 2007, the Company's net debt (defined as total debt less cash) to total enterprise value (defined as net debt plus the market value of all common shares, preferred shares and operating partnership units outstanding) was 60.5% based upon the Company's closing stock price of $10.05. As of September 30, 2007, the Company’s $2.9 billion debt balance consisted of 78% of fixed-rate debt, with a total weighted average interest rate of 6.05%. The Company’s weighted average debt maturity including extension options is 7.2 years.

THIRD QUARTER INVESTMENT ACTIVITY

On July 2, 2007, the Company sold the Hampton Inn Horse Cave in Horse Cave, Kentucky, for approximately $3.5 million. On September 27, 2007, the Company sold the Doubletree Guest Suites - Dayton / Miamisburg in Dayton, Ohio for approximately $6.5 million. In connection with these two sales, the Company recognized a gain of $0.5 million.

SUBSEQUENT INVESTMENT ACTIVITY

On October 2, 2007, the Company sold the Hilton Birmingham Perimeter Park in Birmingham, Alabama for approximately $25 million.

In November, the Company expects to close the sale of the Residence Inn Atlanta in Atlanta, Georgia and the Residence Inn Torrance in Torrance, California for a total of approximately $61.5 million as well as the sale of the Residence Inn Kansas City in Kansas City, Missouri for approximately $7.0 million.

The Company has placed the Marriott BWI Airport in Baltimore, Maryland under contract for sale for approximately $61.5 million. The sale, subject to customary closing conditions, is expected to close by the end of November.

INVESTMENT OUTLOOK

Mr. Bennett concluded, "While hotel fundamentals remain strong by historical measures, increased volatility exists in the financial markets. Our hotel portfolio and investment strategy are structured to benefit from these changing conditions. The diversified mix of assets offers the best of both worlds, namely value-add internal growth from our upper-upscale hotels and operating resiliency from our high quality select-service upscale and mid-scale without F&B properties. Additionally our capital allocation strategy is taking advantage of changing trends. We are recycling capital through asset sales and reducing debt, or redeploying the proceeds in high ROI internal growth investments as well as our hotel lending program. The company is currently targeting approximately $50 million of value added ROI capital projects to be completed during 2008. With the widening of lending spreads, we see a growing, though modest, opportunity in our mezzanine lending investment strategy. We remain committed to seeking the best risk adjusted returns for our shareholders."

INVESTOR CONFERENCE CALL AND SIMULCAST

Ashford Hospitality Trust, Inc. will conduct a conference call at 11:00 a.m. ET on November 1, 2007, to discuss the third quarter results. The number to call for this interactive teleconference is (913) 312-1295. A seven-day replay of the conference call will be available by dialing (719) 457-0820 and entering the confirmation number, 2846114.

The Company will also provide an online simulcast and rebroadcast of its third quarter 2007 earnings release conference call. The live broadcast of Ashford's quarterly conference call will be available online at the Company's website at www.ahtreit.com as well as on http://www.videonewswire.com/event.asp?regd=y&id=42633 on Thursday, November 1, 2007, beginning at 11:00 a.m. ET. The online replay will follow shortly after the call and continue for approximately one year.

Substantially all of our non-current assets consist of real estate investments and debt investments secured by real estate. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, most industry investors consider supplemental measures of performance, which are not measures of operating performance under GAAP, to assist in evaluating a real estate company's operations. These supplemental measures include FFO, AFFO, EBITDA, Hotel Operating Profit, and CAD. FFO is computed in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the NAREIT definition differently than us. Neither FFO, AFFO, EBITDA, Hotel Operating Profit, nor CAD represents cash generated from operating activities as determined by GAAP and should not be considered as an alternative to a) GAAP net income (loss) as an indication of our financial performance or b) GAAP cash flows from operating activities as a measure of our liquidity, nor are such measures indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, management believes FFO, AFFO, EBITDA, Hotel Operating Profit, and CAD to be meaningful measures of a REIT's performance and should be considered along with, but not as an alternative to, net income and cash flow as a measure of our operating performance.

Ashford Hospitality Trust is a self-administered real estate investment trust focused on investing in the hospitality industry across all segments and at all levels of the capital structure, including direct hotel investments, first mortgages, mezzanine loans and sale-leaseback transactions. Additional information can be found on the Company's web site at www.ahtreit.com.

Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, the timing for closing, the impact of the transaction on our business and future financial condition, our business and investment strategy, our understanding of our competition and current market trends and opportunities and projected capital expenditures. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford's control.

These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: general volatility of the capital markets and the market price of our common stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the market in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in Ashford's filings with the Securities and Exchange Commission. EBITDA is defined as net income before interest, taxes, depreciation and amortization. EBITDA yield is defined as trailing twelve month EBITDA divided by the purchase price. A capitalization rate is determined by dividing the property's annual net operating income by the purchase price. Net operating income is the property's funds from operations minus a capital expense reserve of either 4% or 5% of gross revenues. Funds from operations ("FFO"), as defined by the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in April 2002, represents net income (loss) computed in accordance with generally accepted accounting principles ("GAAP"), excluding gains (or losses) from sales or properties and extraordinary items as defined by GAAP, plus depreciation and amortization of real estate assets, and net of adjustments for the portion of these items related to unconsolidated entities and joint ventures.

The forward-looking statements included in this press release are only made as of the date of this press release. Investors should not place undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations or otherwise.