EXHIBIT 99.2
                            1998 First Quarter Report
                        Limited Partner Quarterly Update


     Presented for your review is the 1998 First Quarter  Report for the Potomac
Hotel Limited Partnership.  The 1998 First Quarter Form 10-Q immediately follows
this letter and replaces the First Quarter Report format  previously used by the
Partnership.   The  information   presented  is  essentially  the  same  as  the
information  given in prior years with certain  additional  items required by
the  rules  of  the  Securities  and  Exchange  Commission.  Discussion  of  the
Partnership's   performance  and  hotel   operations  is  included  in  Item  2,
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations. Finally, the Partnership's Supplementary Unaudited Information which
contains  amounts paid to the General Partner and Marriott  International,  Inc.
and their  respective  affiliates  is reported on the final page of this report.
You are  encouraged  to  review  this  report in its  entirety.  If you have any
further  questions  regarding  your  investment,  please  contact Host  Marriott
Partnership Investor Relations at (301) 380-2070.

Host Marriott Real Estate Investment Trust

     On April 17, 1998, Host Marriott Corporation ("Host Marriott"), the General
Partner of the Partnership, announced that its Board of Directors has authorized
the company to  reorganize  its business  operations to qualify as a real estate
investment  trust ("REIT") to become effective as of January 1, 1999. As part of
the REIT conversion,  Host Marriott expects to form a new operating  partnership
(the  "Operating  Partnership")  and limited  partners in certain Host  Marriott
full-service hotel  partnerships and joint ventures,  including the Partnership,
are expected to be given an  opportunity to receive,  on a  tax-deferred  basis,
Operating  Partnership  units in the new Operating  Partnership  in exchange for
their current partnership  interest.  We will keep you informed on the status of
this matter.

                           SUPPLEMENTARY INFORMATION
                       Potomac Hotel Limited Partnership

    Amounts Paid to the General Partner and Marriott International, Inc. and
      Affiliates For the Twelve Weeks Ended March 27, 1998 (in thousands)
  
General Partner and Affiliates
  
  Interest and principal paid on Bank Guaranty loan..................$     2,212
  Interest and principal paid on FF&E loans..........................      1,607
  Interest and principal paid on Tampa acquisition loan..............        848
  Interest and principal paid on Raleigh acquisition loan............        683
  Administrative expenses reimbursed.................................        103

                                                                     $     5,453

  Marriott International, Inc. and Affiliates:

  Chain Services and Marriott Rewards Program costs reimbursed.......$     1,871
  Deferred base management fees paid.................................      1,545
  Base management fees paid..........................................        908
  Incentive management fees paid.....................................        410
  Interest and principal paid on FF&E loan...........................         21

                                                                    $      4,755