PATRIOT AMERICAN HOSPITALITY, INC. AND INTERSTATE HOTELS COMPANY
ANNOUNCE SETTLEMENT OF MARRIOTT LITIGATION

Merger of Patriot and Interstate Expected to be Completed Within Several Days;
Patriot Plans to Spin Off Interstate's Third Party Hotel Management Business
to Paired Shareholders

Dallas, Texas and Pittsburgh, Pennsylvania (May 27, 1998) - Patriot American
Hospitality, Inc. ("Patriot") and Wyndham International, Inc. ("Wyndham," and
together with Patriot, the "Patriot Companies"), whose shares are paired and
trade as a single unit (NYSE: PAH), and Interstate Hotels Company (NYSE: IHC)
jointly announced today that they have signed a definitive settlement agreement
(the "Settlement Agreement") with Marriott International, Inc. (NYSE:MAR) in
connection with actions brought by Marriott to enjoin Interstate's merger with
and into Patriot. The Settlement Agreement will take effect immediately and will
permit the Interstate merger to be completed promptly.

"We are very pleased to announce a settlement of this litigation, which will
allow the Interstate merger to proceed," said Paul A. Nussbaum, chairman and
chief executive officer of Patriot. "We believe we have come to an agreement
which satisfies our objectives and preserves for our shareholders, and those of
Interstate, the substantial benefits of this merger."

Based on the Settlement Agreement, the Patriot Companies expect to complete the
Interstate merger promptly and in any event prior to the June 7, 1998 date under
which, subject to certain conditions, either the Patriot Companies or Interstate
may terminate the Interstate merger agreement. Pursuant to the Interstate merger
agreement, each Interstate common share not converted into $37.50 in cash will
be converted into 1.341 paired shares of the Patriot Companies. In addition,
Interstate shareholders will receive at the time of the Interstate merger a cash
distribution of $0.429 on each Interstate share converted into paired shares.

Immediately prior to the signing of the Interstate merger agreement, Patriot and
Marriott entered into a non-binding letter of intent on December 1, 1997 which
provided for the Patriot Companies to terminate franchise agreements with
respect to ten Marriott-branded hotels currently owned by Interstate and to
convert such hotels to the Wyndham brand. In return, the Patriot Companies
agreed to allow Marriott to assume management of ten other Marriott-branded
hotels currently owned by Interstate for the term of the underlying franchise
agreements, with the additional management fees paid to Marriott effectively
offsetting the lost franchise fees resulting from the terminated franchise
agreements. The Settlement Agreement similarly provides for the termination of
ten franchise agreements on Marriott hotels owned by Interstate in exchange for
agreements for Marriott to submanage ten additional hotels under a structure
described below, but provides for the completion of this exchange over an
approximately 16-month period rather than the 33-month period provided in the
original letter of intent.

Another principal feature of the Settlement Agreement is the spin-off by Patriot
(the "Spin-




Off"), within 180 days following June 2, 1998 (subject to extension under
certain circumstances), of a 35% interest in Interstate's existing third-party
hotel management business, as well as all future growth of that business.
Ninety-two percent of the shares of the company to be spun-off by Patriot, which
is expected to be named Interstate Hotel Management, Inc. ("NewCo"), will be
distributed to Patriot's shareholders, 4% will be owned collectively by the
Patriot Companies and the remaining 4% will be purchased and owned by Marriott
International.

NewCo will have two principal subsidiaries, the first of which will conduct
substantially all of Interstate's existing third-party management business.
NewCo will own an approximately 35% managing interest in this subsidiary and
Patriot will retain an approximately 65% non-voting ownership interest. This
arrangement is intended to prevent Wyndham, a major competitor of Marriott, from
directly or indirectly managing Marriott-branded hotels. It is currently
anticipated that upon completion of the Spin-Off, approximately 200 hotels will
be managed by this subsidiary, of which 43 will be Marriott-branded properties.
The second subsidiary of NewCo will contract with Wyndham to manage ten
additional Marriott-branded hotels. However, those services will be provided
through a submanagement arrangement with Marriott which is intended to insulate
Marriott from managing hotels directly for Wyndham.

In addition to the operation of its subsidiaries, NewCo also will seek to expand
the existing third-party management business by obtaining additional management
contracts from third-party hotel owners. These activities will be conducted
through NewCo, allowing those shareholders of the Patriot Companies who retain
their shares in NewCo to directly benefit from its growth.

According to James D. Carreker, chairman and chief executive officer of Wyndham,
the spin-off of Interstate's third-party management business will enable Wyndham
to focus its strategic and operational efforts on the management of proprietary
branded hotels while allowing Interstate to focus on third-party hotel
management. "Interstate's roots are in the third-party management business,
through which Interstate maintained relationships with various branded companies
and offered third-party owners the benefit of these relationships through
franchising," said Mr. Carreker. "The spin-off of Interstate's third-party
management business achieves two objectives: it allows Interstate to continue to
pursue the growth of this business through strong relationships with two major
branded companies, while retaining the benefit of this growth for our paired
shareholders through the ownership of NewCo common stock."

"We believe that the accretive impact of the merger will be relatively unchanged
as a result of the Settlement Agreement," Mr. Nussbaum said. "Specifically, we
expect that the effect of the spin-off will reduce Patriot's FFO per share by
approximately four cents in 1999, although Patriot's shareholders of record at
the time of the divestiture will receive shares of NewCo common stock in the
Spin-Off."

The Patriot Companies currently expect that the spin-off will be completed on a
taxable basis. Accordingly, the receipt by the Patriot Companies' shareholders
of NewCo shares will be






treated as a taxable dividend. The tax to the Patriot Companies' shareholders,
which otherwise would have been much larger, will be substantially reduced by
the fact that Patriot will retain approximately 65% of the value of Interstate's
existing third-party management business following the Spin-Off through its
ownership interest in the NewCo subsidiary responsible for this business. The
Patriot Companies currently estimate that the value of the NewCo Spin-Off (net
of Patriot's retained interest in the existing management business) will be
approximately $70 million (or approximately 3.2% of the total value of the
Interstate merger). NewCo will initially have no long-term debt. On a per share
basis, it is anticipated that shareholders of the Patriot Companies will receive
a dividend in the form of shares of NewCo valued between $0.40 and $0.50 for
each paired share they hold as of the record date for the Spin-Off. However, the
actual value of the Spin-Off to paired shareholders will depend upon market
conditions and other factors at the time the Spin-Off is completed and there can
be no assurance with respect thereto. Due to issues relating to legislation
recently proposed affecting paired-share REITs, unitholders in Patriot's
operating partnership will receive cash in lieu of NewCo shares in connection
with the Spin-Off. In addition, holders of Patriot unpaired preferred stock will
receive cash in lieu of NewCo shares in an effort to accommodate Marriott's
desire that Patriot insiders own less than 9.9% of NewCo's outstanding common
stock within 12 months following the Spin-Off.

The Settlement Agreement provides that the Patriot Companies will complete the
Spin-Off within 180 days of the merger, subject to extension upon payment of
certain fees by Patriot. In the event that the Spin-Off is not completed within
the time period set forth in the Settlement Agreement, the Settlement Agreement
provides that Marriott will retain all of its rights under its existing
franchise agreements, will be entitled to liquidated damages with respect to
Interstate's owned and managed Marriott-branded portfolio (subject to any
defenses Patriot may have), and may require third-party owners of Interstate's
Marriott-branded properties to choose an alternative manager for their hotels.
Additionally, if the Spin-Off is not timely completed, Patriot has agreed to
provide Marriott with the option to acquire certain of the Marriott-branded
hotels acquired by Patriot in the merger at their appraised value. The Patriot
Companies anticipate filing the requisite documents for the Spin-Off with the
Securities and Exchange Commission by early July, and expect to complete the
Spin-Off in advance of the date agreed to in the Settlement Agreement. However,
if the Spin-Off does not occur within the initial 180-day prescribed period,
these provisions of the Settlement Agreement could have a material adverse
effect on the Patriot Companies if consummation of the Spin-Off is not completed
on a timely basis. In addition, whether or not the Spin-Off is completed, the
Settlement Agreement contains certain restrictions on Patriot's ability to sell
certain of the hotels to be submanaged by Marriott and also provides rights of
first refusal in favor of Marriott to purchase all of the hotels to be
submanaged by Marriott at the offer price received by Patriot from a third party
during various periods following the merger.

In order to partially compensate Patriot for costs associated with the
Interstate merger, Patriot has also entered into put and call option
arrangements with respect to 5,000,000 paired shares of Patriot and Wyndham
common stock that will be received by various family trusts and partnerships
controlled by the Chairman of Interstate, Milton Fine, and members of his family
(the "Fine Family Shareholders"). Patriot will generally have the right to
purchase these





shares for a period of 60 days after the Interstate merger for $3 per share
below the average price three days prior to the merger, subject to increase in
accordance with a specified formula. The number of paired shares subject to
Patriot's call option will be reduced on a daily basis if the Interstate merger
does not occur on or prior to June 2, 1998. Patriot has also granted the Fine
Family Shareholders a concurrent put option with respect to these 5,000,000
paired shares at a strike price of $7 per share below the market price on the
exercise date, subject to increase in accordance with a specified formula.

Shareholders desiring more detailed information about the Spin-Off are advised
to consult the Current Report on Form 8-K filed by Patriot today. The Form 8-K
will be provided free of charge to any shareholder who so requests by calling
Patriot's investor relations department at 214-863-4795. The Form 8-K is also
available on the SEC's world wide web site at http://www.sec.gov.

In connection with the Settlement Agreement, Patriot, Interstate and Marriott
have agreed that all litigation among them arising from the Interstate merger
will be stayed or dismissed and that the United States District Court for the
District of Maryland will retain jurisdiction over the matter to enforce the
parties' respective obligations under the Settlement Agreement.

About Patriot American Hospitality, Inc. and Wyndham International, Inc.

Based in Dallas, Texas, Patriot American Hospitality, Inc. (NYSE: PAH) is
currently the nation's second-largest hotel real estate investment trust (REIT)
with a portfolio comprised of 214 owned, managed, leased or franchised hotels
with more than 60,000 rooms. Wyndham International, Inc., comprised of the
Luxury Hotel Division, the Wyndham Hotel Group, and the Asset Management Group,
leases, manages and franchises primarily upscale hotel and resort properties
represented by its proprietary brands, and provides management services for
third-party owned hotels and resorts.

About Interstate Hotels Company

Based in Pittsburgh, Pennsylvania, Interstate Hotels Company is the largest
independent hotel management company in the United States. Interstate owns,
manages, leases or performs related services for a portfolio of 217 hotels
totaling 43,516 rooms. The Company owns or has a controlling interest in 42
hotels.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Actual results and the timing of certain events could
differ materially from those set forth in the forward-looking statements. End