April 27, 1998

Dear Cendant Shareholder:

We are writing to report to you the actions we have taken since the discovery of
potential  accounting  irregularities  in certain  former CUC  businesses and to
state clearly that Cendant  remains strong and vibrant.  All of us in management
are united in tackling  this  problem  aggressively.  We do not believe that the
potential  accounting  problems  exist anywhere other than where they were first
discovered.

Here's what we have done to date:

- -        The Audit Committee of the Board of Directors engaged Willkie Farr &
         Gallagher as special legal counsel who, in turn, engaged Arthur 
         Andersen LLP to perform a thorough, independent investigation;

- -        We informed the appropriate regulatory authorities, advised the SEC and
         initiated a meeting with its staff;

- -        We assigned all accounting, finance, financial reporting, treasury,
         budget, systems and control functions to the former HFS finance staff;

- -        We installed a new management team to lead the Alliance Marketing
         Division consisting of:

         -   Co-Chair and Co-Chief Executive John Fullmer, who was most recently
             Chief Marketing Officer at CUC;

         -   Co-Chair and Co-Chief Executive Tony Menchaca, formerly President
             of the Comp-U-Card Division;

         -   President and Chief Operating Officer John Chidsey, who was
             Executive Vice President for Business Development at HFS.

- -        We created a new position of Chief Financial Officer of Alliance
         Marketing, to which Michael Wargotz has been named;

- -        We terminated the employment of CUC's former Chief Financial Officer;

- -        We have obtained the support of our bank group, which has given us the
         necessary waivers to maintain the availability to us of $5 billion in 
         existing, committed bank facilities.

We are  outraged  that the apparent  misdeeds of a small  number of  individuals
within a limited  part of our company has  adversely  affected the value of your
investment - and ours - in Cendant.  We are working together diligently to clear
this  matter up as soon as  possible.  We fully  support  the Audit  Committee's
investigation  and  continue  to  believe  that  the  strategic   rationale  and
industrial  logic of the HFS/CUC merger that created Cendant is as compelling as
ever.

Cendant is strong, highly liquid, and extremely profitable. The vast majority of
Cendant's operating businesses and earnings are unaffected and the prospects for
the Company's future growth and success are excellent.



We have affirmed our commitment to completing all pending acquisitions: American
Bankers,   National  Parking  Corporation  and  Providian  Insurance.   In  this
connection,  we are pleased to note that today we completed the National Parking
Corporation  acquisition  following shareholder and European Community approvals
for that transaction.

We are exceedingly proud of the continued  dedication and professionalism we see
exhibited every day by Cendant associates, who remain single-mindedly focused on
the  day-to-day  success of the company  and,  ultimately,  restoring - and then
increasing - the value of your and their investment in the Company.

We will announce first quarter  earnings on May 5th. We expect to meet or exceed
current Wall Street consensus estimates.  We have also announced that we will be
holding  investor  meetings  in May in  which  senior  members  of the  Alliance
Marketing  operating  management will discuss that Division's business model and
outlook for continued growth and operational success.

We will  periodically  update you as  developments  warrant and,  when the Audit
Committee's  investigation is concluded,  we will report to you all we can about
what  happened  and share with you our  specific  measures to assure that we are
never  confronted  with this  problem  again.  Everyone  involved in that effort
understands  the extreme urgency of the assignment and is working as quickly and
diligently as possible.

In the meantime,  we appreciate  and share your concern and are more  determined
that ever to win back your  confidence  and  reward you for your  investment  in
Cendant.

Sincerely,

Walter A.  Forbes                           Henry R.  Silverman
Chairman                            President and Chief Executive officer