AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1999

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------

RESORTQUEST INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 62-1750352
(State or other jurisdiction (I.R.S. Employer
Of incorporation or organization) Identification Number)

------------------------
530 OAK COURT DRIVE
SUITE 360
MEMPHIS, TN 38117
(901) 762-0600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------------

DAVID C. SULLIVAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
RESORTQUEST INTERNATIONAL, INC.
530 OAK COURT DRIVE
SUITE 360
MEMPHIS, TN 38117
(901) 762-0600
(Address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------

COPIES TO:

BRUCE S. MENDELSOHN, ESQ. BRYAN L. GOOLSBY, ESQ.
PAUL A. BELVIN, ESQ. GINA E. BETTS, ESQ.
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. LOCKE LIDDELL & SAPP LLP
1333 NEW HAMPSHIRE AVENUE, N.W. 2001 ROSS AVENUE
SUITE 400 SUITE 3000
WASHINGTON, D.C. 20036 DALLAS, TX 75201
(202) 887-4000 (214) 849-5500
FAX: (202) 887-4288 FAX: (214) 849-5599

------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the Registration Statement becomes effective.

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------

CALCULATION OF REGISTRATION FEE

PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) SHARE (2) PRICE (2) FEE

Common Stock, $.01 par value per share............ 4,600,000 $14.63 $67,298,000 $18,709

(1) Includes shares that the underwriters have the option to purchase from the
selling stockholders solely to cover over-allotments, if any.
(2) Calculated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee on the basis of the average of the high and
low prices of the common stock as reported by the New York Stock Exchange on
May 20, 1999.
------------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY CHANGE. NEITHER
RESORTQUEST NOR THE SELLING STOCKHOLDERS MAY SELL THESE SECURITIES UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND NEITHER
RESORTQUEST NOR THE SELLING STOCKHOLDERS ARE SOLICITING OFFERS TO BUY THESE
SECURITIES IN ANY STATE THAT DOES NOT PERMIT THAT OFFER OR SALE.

SUBJECT TO COMPLETION, DATED MAY 21, 1999

P R O S P E C T U S

[LOGO]

4,000,000 SHARES

COMMON STOCK
$ PER SHARE
---------------

ResortQuest International, Inc. is selling 2,000,000 shares of its common
stock and the selling stockholders named in this prospectus are selling
2,000,000 shares. We will not receive any proceeds from the sale of the shares
by the selling stockholders. The underwriters named in this prospectus may
purchase up to 600,000 additional shares of common stock from the selling
stockholders under certain circumstances.

Our common stock trades on the New York Stock Exchange under the symbol
"RZT." The last reported sale price on May 20, 1999 was $14.69 per share.
------------------------

INVESTING IN THE COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON
PAGE 7.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
------------------------

PER SHARE TOTAL
--------------- ------------------

Public Offering Price............................................................ $ $
Underwriting Discount............................................................ $ $
Proceeds to ResortQuest (before expenses)........................................ $ $
Proceeds to the Selling Stockholders............................................. $ $

The underwriters are offering the shares subject to various conditions. The
underwriters expect to deliver the shares to purchasers on or about
, 1999.
------------------------

SALOMON SMITH BARNEY

ING BARING FURMAN SELZ LLC

MORGAN KEEGAN & COMPANY, INC.

RAYMOND JAMES & ASSOCIATES, INC.

THE ROBINSON-HUMPHREY COMPANY

SG COWEN

, 1999

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE
HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. NEITHER WE
NOR THE SELLING STOCKHOLDERS ARE MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION PROVIDED BY THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THIS PROSPECTUS.

------------------------

TABLE OF CONTENTS

PAGE
-----

Prospectus Summary......................................................................................... 1
Risk Factors............................................................................................... 7
Forward-Looking Statements................................................................................. 14
Use of Proceeds............................................................................................ 15
Price Range of Common Stock................................................................................ 15
Dividend Policy............................................................................................ 15
Corporate Information...................................................................................... 15
Capitalization............................................................................................. 16
Selected Consolidated Financial Data....................................................................... 17
Management's Discussion and Analysis of Financial Condition and Results of Operations...................... 19
Business................................................................................................... 32
Management................................................................................................. 44
Selling Stockholders....................................................................................... 47
Shares Eligible for Future Sale............................................................................ 48
Underwriting............................................................................................... 49
Transfer Agent and Registrar............................................................................... 50
Legal Matters.............................................................................................. 50
Experts.................................................................................................... 51
Where You Can Find More Information........................................................................ 51
Index to Financial Statements.............................................................................. F-1

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY HIGHLIGHTS THE KEY INFORMATION CONTAINED IN THIS
PROSPECTUS. IT DOES NOT CONTAIN ALL THE INFORMATION THAT MAY BE IMPORTANT TO
YOU. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, ESPECIALLY THE DISCUSSION
OF "RISK FACTORS" AND THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES,
BEFORE DECIDING TO INVEST IN SHARES OF OUR COMMON STOCK.

RESORTQUEST INTERNATIONAL, INC.

ResortQuest is the first company to offer vacation condominium and home
rentals, sales and property management services under a national brand name and
is a leading provider of vacation rentals in premier destination resorts
throughout the United States and in Canada. Through the consolidation of leading
vacation rental and property management companies, the development of a national
brand and marketing initiative and best practices management systems, we offer
vacationers a branded network of high quality, fully furnished, privately-owned
condominium and home rentals. In addition, we provide property owners with
superior management services by combining local management expertise with the
marketing power and resources of a leading brand, which work to enhance a
property's value and marketability.

On May 26, 1998, we completed our initial public offering and simultaneously
acquired 12 vacation rental and property management companies and one leading
vacation rental and property management software company. Since our initial
public offering, we have completed 12 additional vacation rental and property
management acquisitions, five in 1998 and seven in 1999. These acquisitions
contain a total of more than 4,500 vacation rental units, which represents a 44%
increase in our initial portfolio of vacation rental condominiums and homes.
Through these acquisitions, we expanded our presence into nine new resort
markets. We currently manage approximately 15,000 condominiums and homes in 30
premier, geographically and seasonally diverse resort locations throughout the
United States and in Canada.

Most vacationers seeking to rent a condominium or home at a popular
destination resort typically have relied on local vacation rental and property
management firms to inquire about availability and make reservations.
Vacationers made rental choices with limited information and, as a result, faced
great uncertainty concerning the quality of their rental. To address this need,
we established the ResortQuest brand to provide vacationers with single-source
access to quality condominium and home rentals intended to consistently meet
their expectations. The ResortQuest brand is designed to ensure that a vacation
rental meets customer expectations by providing a standardized basic level of
products and services and by consistently categorizing accommodations based on
quality, appearance and features. In November 1998, we established a
proprietary, five-level rating system that categorizes individual unit
accommodations according to specific criteria enabling vacationers to know what
to expect from one ResortQuest location to another. The rating categories are
Quest Home, Platinum, Gold, Silver and Bronze.

In order to increase awareness of the ResortQuest brand, we have implemented
a multi-faceted national marketing program which targets consumers and the
travel trade through high-profile advertising, direct mail, e-mail marketing,
public relations, promotional programs and the Internet. In January 1999, we
launched RESORTQUEST.COM, one of the most comprehensive web sites in the
vacation industry based on its breadth of locations, property information and
functionality. RESORTQUEST.COM allows consumers to search through all of our
vacation condominium and home rentals, access detailed property information
including photographs and floor plans, obtain local market information, as well
as information about special offers and promotions. The site also features a
real-time, on-line booking system which allows vacationers to check availability
and make reservations directly on-line. Since the inception of RESORTQUEST.COM,
monthly site hits have increased from 500,000 in January 1999 to over 8 million
in March 1999, generating approximately $2 million of on-line bookings during
the first quarter of 1999. In addition, for customers interested in buying or
selling a vacation home, RESORTQUEST.COM provides multiple location real estate
listings for condominiums and homes located in 15 of our resort locations.

Over the next few months, we plan to launch a number of important web site
related initiatives, including:

- virtual tours including interior and exterior views of a representative
sample of our condominium and home rental properties;

- search engine enhancements that will allow simultaneous searches across
multiple resort locations; and

- improved booking features.

We are aggressively marketing our web site with a comprehensive, national
campaign which includes print advertising in high-profile publications,
including USA TODAY, CONDE NAST TRAVELER, TRAVEL & LEISURE and leading travel
trade journals. We are also promoting our web site through Internet banner
advertising and targeted links, e-mail marketing campaigns and direct mail
programs. We expect Internet sales to account for a significant portion of our
revenues over the next few years.

Our primary source of revenue is property rental fees, which are charged to
the property owners as a percentage of the vacationer's total rental rate. Fee
percentages for vacation condominiums and homes range from approximately 3% to
over 40% of rental rates depending on the market, the type of services provided
to the property owner, the type of rental unit managed and which party bears
responsibility for operating expenses. We believe that our national brand and
superior management services, which are designed to enhance rental income for
property owners, will provide us with a competitive advantage in attracting
additional high quality condominiums and homes in our markets.

OUR STRATEGIES

BUSINESS STRATEGY

The vacation rental and property management industry is highly fragmented,
with an estimated 3,000 vacation rental and property management companies in the
United States. We believe this fragmented market presents a significant
opportunity for a well-capitalized company offering a branded, national network
of high quality vacation condominiums and homes with superior levels of customer
service. Our objective is to enhance our position as a leading provider of
premier destination resort condominium and home rentals by pursuing the
following elements of our business strategy:

- CONTINUE TO BUILD THE RESORTQUEST BRAND. We have established the only
national brand in the fragmented vacation rental industry and continue to
provide vacationers with high quality condominium and home rentals. The
ResortQuest brand is designed to ensure that a vacation rental meets
customer expectations by providing a basic, standardized level of products
and services and by consistently categorizing accommodations based on
quality, appearance and amenities.

- CAPITALIZE ON TECHNOLOGY. We believe that investment in technology,
especially that related to the Internet, will be critical in building our
national brand, increasing revenue, reducing costs and managing
vacationer, owner, employee and investor expectations. Our commitment to
technology is evidenced by (1) RESORTQUEST.COM, our comprehensive web site
which enables consumers to search through our vacation rentals, to check
availability and to make reservations on-line, and (2) First Resort
Software, one of our operating companies, which is a leading provider of
integrated software for the vacation rental and property management
industry.

- OFFER VACATIONERS SUPERIOR CUSTOMER SERVICE. We believe that maintaining
superior levels of customer service is critical to developing a reputation
for high quality vacation rentals and for attracting new customers. By
offering the convenience and accommodations of a condominium or home while
providing many of the amenities and services of a hotel, such as
convenient check-in and check-out, frequent housekeeping and cleaning and
concierge-type services, we believe we will continue to strengthen the
loyalty of our existing customers and attract new vacationers into the
vacation condominium and home rental market.

- ENHANCE VALUE FOR PROPERTY OWNERS. We provide property owners with
superior management services by combining local management expertise with
the marketing power and resources of a leading brand, which work to
increase rental income through increased occupancy and rental rates.

- CAPITALIZE ON THE EXPERIENCE OF SENIOR MANAGEMENT. Our senior management
team has a proven track record of building and operating successful
brands, and the breadth of experience necessary to execute our business
plan effectively. Our senior management team, led by David C. Sullivan,
Chairman and Chief Executive Officer, averages 23 years of lodging related
experience.

- LEVERAGE LOCAL RELATIONSHIPS AND EXPERTISE. Our local management teams
have a valuable understanding of their respective markets and businesses
and have developed strong local relationships. Accordingly, our
decentralized management strategy is designed to allow local managers to
leverage their market knowledge and expertise to provide superior customer
service to both property owners and vacationers.

GROWTH STRATEGY

We believe we can achieve significant growth both internally and through an
active acquisition program.

INTERNAL GROWTH. The primary elements of our internal growth strategy
include:

- FULLY IMPLEMENT OUR NATIONAL MARKETING STRATEGY. We have implemented a
multi-faceted national marketing program designed to increase vacationer
awareness of the ResortQuest brand, while promoting the unique
characteristics of our individual resorts. This comprehensive marketing
program targets consumers and the travel trade through various forms of
media and is designed to attract new customers as well as cross-sell
additional services and locations to existing customers.

- INCREASE MARKET SHARE WITHIN EXISTING MARKETS. A key element of our growth
strategy is to increase our selection of condominiums and homes in order
to expand our market share and strengthen the local brands of each of our
operating companies. We intend to attract new property owners by achieving
high occupancy rates through effective national marketing and
cross-selling and by offering additional incentives to property owners,
such as QuestClub, our new travel benefits program for owners of
properties we manage.

- EXPAND PROFIT MARGINS. We believe that enhanced efficiency and economies
of scale will reduce overall operating costs and allow us to achieve
increased margins by spreading operating and corporate overhead costs over
a larger revenue base. For example, we have already begun to achieve
savings through company-wide contracts for long distance telephone
service, credit card fees and insurance.

- USE ADDITIONAL MARKETING CHANNELS. Given our size and presence in premier
destination resorts, we believe we are an attractive partner to travel
agents, tour package operators and other travel providers. These
relationships should continue to be a significant source of new customers
and, in particular, will be a valuable marketing channel for off-peak
seasons.

ACQUISITIONS. We continue to pursue an aggressive acquisition program to
gain a presence in additional premier destination resort locations as well as to
expand our market share in existing resort locations. While we seek to acquire
leading companies in each new market we enter, we also plan to pursue tuck-in
acquisitions through which we can expand our selection of rental inventory in
our existing markets. We believe that we provide acquisition candidates with a
number of significant benefits, including:

- affiliation with a national brand;

- the ability to cross-sell to customers of other vacation rental and
property management companies within the ResortQuest network;

- the ability to increase liquidity as a result of our financial strength as
a public company and access to additional sources of capital; and

- the ability to increase profitability through the centralization of
certain administrative functions and other economies of scale.

At March 31, 1999, assuming we would have successfully completed this
offering and closed our pending placement of $50 million of senior secured
notes, we would have held approximately $59.1 million of cash and cash
equivalents and had $55 million of borrowing capacity under our current credit
facility, subject to the satisfaction of certain covenants, available to fund
our future acquisitions.

OUR RECENT DEVELOPMENTS

Since closing our initial public offering on May 26, 1998, we have:

- completed 12 additional acquisitions, which added approximately 4,500
vacation rental condominiums and homes, located in three existing markets
and nine new resort markets;

- launched a comprehensive web site, RESORTQUEST.COM, which includes a fully
integrated on-line reservation and booking system;

- established national product and service standards, including a five-level
rating system that categorizes individual unit accommodations according to
specific criteria;

- increased the borrowing capacity available under our credit facility from
$30 million to $55 million; and

- commenced a placement of $50 million of senior secured notes to a limited
number of institutional investors, which is expected to close by June 1,
1999.

THE OFFERING

The following information about shares of common stock outstanding is as of
May 20, 1999. It does not include 2,615,856 shares of common stock reserved for
issuance under our incentive plan, of which 1,892,101 shares are subject to
outstanding options.

Common stock offered:

By ResortQuest........................... 2,000,000 shares

By selling stockholders.................. 2,000,000 shares
Total.................................... 4,000,000 shares
Common stock outstanding after this 19,439,040 shares
offering...................................

Use of proceeds by ResortQuest............... To make strategic acquisitions in additional
premier destination resort locations as well
as to increase our market share in existing
resort locations, and for working capital and
general corporate purposes.

New York Stock Exchange symbol............... "RZT"

SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

On May 26, 1998, we consummated our initial public offering and completed
the simultaneous acquisition of 13 founding companies. The following
consolidated statements of pro forma income present data for ResortQuest,
excluding income from discontinued operations, as adjusted for:

- the effects of our acquisition of the 13 founding companies as if they had
occurred on January 1, 1998;

- the effects of our acquisition of Abbott Realty Services, Inc., commonly
referred to as Abbott Resorts, as if it had occurred on January 1, 1998;

- the effects of certain reductions in salary, bonuses and benefits derived
from contractual agreements which establish the compensation of the former
owners and certain key employees of the 13 founding companies, Abbott
Resorts and our three acquisitions accounted for as poolings of interests
as if they had occurred on January 1, 1998;

- the effects of an assumed comparable corporate expense for each of the
four quarters ended December 31, 1998, based on actual corporate expense
incurred for the three months ended March 31, 1999;

- the effects of goodwill amortization, which is principally not deductible
for income tax purposes, recorded as a result of the acquisitions of the
13 founding companies and Abbott Resorts;

- the effects of the provision for federal and state income taxes relating
to converting certain operations to C Corporation status and the tax
impact of pro forma adjustments;

- the effects of additional revenue that we would have realized related to
certain property management contracts with affiliates of the 13 founding
companies and Abbott Resorts, based on contractual rates that were not
reflective of market conditions; and

- the effects of excluding certain depreciation and interest expense related
to certain assets and liabilities not acquired from the 13 founding
companies and Abbott Resorts.

Our shares used in computing pro forma net income per share include:

- 6,119,656 shares issued to owners of the 13 founding companies;

- 3,134,630 shares issued to our management and founders;

- 6,670,000 shares sold in the initial public offering necessary to pay the
cash portion of the consideration for the 13 founding companies, to repay
debt assumed in the acquisition of the 13 founding companies, to pay the
underwriting discount and other expenses of the initial public offering
and to provide additional working capital;

- 392,780 shares used in the purchase of our three acquisitions accounted
for as poolings of interests;

- 757,040 shares used in the purchase of Abbott Resorts;

- the weighted average effect of issuing 315,539 shares used in the purchase
of our remaining acquisitions; and

- the dilutive effect of options outstanding in calculating diluted pro
forma net income per share.

The as adjusted balance sheet data reflect the application of the net
proceeds from our sale of 2,000,000 shares of common stock in this offering at
an assumed offering price of $14.69 per share and the application of the net
proceeds from our pending placement of $50 million of senior secured notes,
expected to close by June 1, 1999.

You should read this information together with the Consolidated Financial
Statements and the related Notes included elsewhere in this prospectus. See
"Selected Consolidated Financial Data" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

THREE MONTHS ENDED
YEAR ENDED ------------------------------
DECEMBER 31, 1998 MARCH 31, 1998 MARCH 31, 1999
----------------- -------------- --------------

CONSOLIDATED STATEMENTS OF PRO FORMA INCOME (UNAUDITED):
Revenues:
Property management fees.................................... $ 52,942 $ 16,437 $ 18,364
Service fees................................................ 25,852 6,098 7,717
Other....................................................... 21,957 4,292 5,528
----------------- -------------- --------------
100,751 26,827 31,609
Direct operating expenses..................................... 52,290 12,435 14,427
General and administrative expenses........................... 29,779 7,282 8,966
Depreciation and amortization................................. 5,746 1,401 1,558
----------------- -------------- --------------
Operating income.............................................. 12,936 5,709 6,658
Interest and other expense, net............................... 2,082 592 647
----------------- -------------- --------------
Income before income taxes.................................... 10,854 5,117 6,011
Provision for income taxes.................................... 5,457 2,278 2,682
----------------- -------------- --------------
Net income.................................................... $ 5,397 $ 2,839 $ 3,329
----------------- -------------- --------------
----------------- -------------- --------------
Basic net income per share.................................... $ 0.32 $ 0.17 $ 0.19
----------------- -------------- --------------
----------------- -------------- --------------
Shares used in computing basic pro forma net income per
share....................................................... 17,075,661 17,074,106 17,353,989
----------------- -------------- --------------
----------------- -------------- --------------
Diluted net income per share.................................. $ 0.31 $ 0.17 $ 0.19
----------------- -------------- --------------
----------------- -------------- --------------
Shares used in computing diluted pro forma net income per
share....................................................... 17,215,082 17,074,106 17,786,211
----------------- -------------- --------------
----------------- -------------- --------------

AS OF
MARCH 31, 1999
----------------------
ACTUAL AS ADJUSTED
--------- -----------

BALANCE SHEET DATA (UNAUDITED):
Working capital (deficit) surplus...................................... $ (4,868) $ 23,665
Total assets........................................................... 216,239 245,672
Long-term debt, net of current maturities.............................. 49,214 51,214
Stockholders' equity................................................... 114,261 141,694

RISK FACTORS

A PURCHASE OF OUR SHARES INVOLVES RISKS. WE LIST BELOW SOME RISKS THAT COULD
HARM OUR BUSINESS, FINANCIAL CONDITIONS, OPERATING RESULTS AND STOCK PRICE.
OTHER RISKS THAT WE CANNOT NOW FORESEE MIGHT ALSO HURT US. YOU SHOULD CAREFULLY
CONSIDER THESE FACTORS AND THE OTHER INFORMATION IN THIS PROSPECTUS IN
EVALUATING RESORTQUEST AND DECIDING WHETHER TO PURCHASE OUR COMMON STOCK.

OUR REPORTED PRO FORMA FINANCIAL RESULTS MAY NOT BE INDICATIVE OF FUTURE
PERFORMANCE BECAUSE THEY COVER A PERIOD DURING WHICH OUR OPERATING COMPANIES
CONDUCTED BUSINESS AS INDEPENDENT ENTITIES.

Prior to the time we completed our acquisition of our operating companies,
each company operated as a separate, privately-held entity. For financial
reporting, we currently rely on the existing reporting systems of each of these
operating companies. The pro forma financial information of the 13 founding
companies and subsequent acquisitions cover periods when these companies and
ResortQuest were not under common control or management. Consequently, they may
not be indicative of our future financial or operating results.

WE MAY NOT BE ABLE TO INTEGRATE SUCCESSFULLY ANY FUTURE ACQUISITION.

We assembled our senior management group in connection with the initial
public offering. We cannot assure you that our management group will be able to
continue to manage effectively the combined entity or implement effectively our
operating and growth strategies. If we are unable to integrate successfully the
existing operating companies and future acquisitions, it would have a material
adverse effect on our business and financial results and make it unlikely that
our acquisition program will continue to be successful.

Our operating companies offer a variety of different services to property
owners and vacationers, apply different sales and marketing techniques to
attract new customers, use different fee structures and target different
customer segments. In addition, almost all of our operating companies operate in
different geographic markets with varying levels of competition, development
plans and local market dynamics. These differences increase the risk inherent in
successfully completing the integration of our operating companies.

WE MAY NOT BE ABLE TO COMPLETE SUCCESSFULLY OUR PLANNED EXPANSION.

We intend to continue to expand the markets we serve and increase the number
of properties we manage, in part, through the acquisition of additional vacation
rental and property management companies. We cannot assure you that we will be
able to identify, acquire or profitably manage additional businesses or
successfully integrate acquired businesses into our existing operations without
substantial costs, delays or other operational or financial problems. It is
possible that competition may increase for companies we might seek to acquire.
In such event, there may be fewer acquisition opportunities available to us, as
well as higher acquisition prices.

Acquisitions also involve a number of special risks which could have a
material adverse effect on our business and financial results. These risks
include the following:

- failure of acquired companies to achieve expected financial results;

- diversion of management's attention;

- failure to retain key personnel;

- amortization of acquired intangible assets; and

- increased potential for customer dissatisfaction or performance problems
at a single acquired company to affect adversely our reputation and brand
name.

We may also seek international acquisitions that may be subject to
additional risks associated with doing business in such countries. We
continually review various strategic acquisition opportunities and have held
discussions with a number of such acquisition candidates.

WE MAY NOT BE ABLE TO CLOSE ON PENDING FINANCINGS OR TO FINANCE FUTURE
ACQUISITIONS.

We have commenced a placement of $50 million of senior secured notes to a
limited number of institutional investors. The proceeds will be used to repay
our credit facility. It is anticipated that the private placement will close on
June 1, 1999, however, there can be no assurance that the closing will occur. If
the private placement does not close, the proceeds of this offering will be used
to repay our credit facility and less cash will be available for future
acquisitions.

We intend to use shares of our common stock to finance a portion of the
consideration for future acquisitions. If our common stock does not maintain a
sufficient market value, or the owners of businesses we may seek to acquire are
otherwise unwilling to accept shares of common stock as part of the
consideration for the sale of their businesses, we may be required to use more
of our cash resources in order to implement our acquisition strategy. If we have
insufficient cash resources, our growth could be limited unless we are able to
obtain additional funds through debt or equity financings. Our ability to obtain
debt financing may be constrained by existing or future loan covenants, the
satisfaction of which may be dependent upon our ability to raise additional
equity capital through either offerings for cash or the issuance of stock as
consideration for acquisitions. We cannot assure you that our cash resources
will be sufficient, or that other financing will be available on terms we find
acceptable. If we are unable to obtain financing sufficient for all of our
desired acquisitions, we may be unable to implement fully our acquisition
strategy.

OUR BUSINESS MAY BE NEGATIVELY AFFECTED IF WE ARE UNABLE TO MANAGE OUR GROWTH
EFFECTIVELY.

We plan to continue to grow internally and through acquisitions. We will
expend significant time and effort in expanding the existing operating companies
and in identifying, completing and integrating acquisitions. We cannot assure
you that our systems, procedures and controls will be adequate to support our
operations as they expand. Any future growth also will impose significant added
responsibilities on members of senior management, including the need to
identify, recruit and integrate new managers and executives. We cannot assure
you that we will be able to identify and retain such additional management. If
we are unable to manage our growth efficiently and effectively, or we are unable
to attract and retain additional qualified management, it could have a material
adverse effect on our business and financial results.

OUR BUSINESS AND FINANCIAL RESULTS DEPEND UPON FACTORS THAT AFFECT THE VACATION
RENTAL AND PROPERTY MANAGEMENT INDUSTRY.

Our business and financial results are dependent upon various factors
affecting the vacation rental and property management industry. Factors such as
the following could have a negative impact on our business and financial
results:

- reduction in the demand for vacation properties, particularly for beach,
island and mountain resort properties;

- adverse changes in travel and vacation patterns;

- adverse changes in the tax treatment of second homes;

- a downturn in the leisure and tourism industry;

- an interruption of airline service;

- increases in gasoline or airfare prices; and

- adverse weather conditions or natural disasters, such as hurricanes, tidal
waves or tornadoes.

OUR OPERATING RESULTS ARE HIGHLY SEASONAL.

Our business is highly seasonal. The financial results of each of our
operating companies have been subject to quarterly fluctuations caused primarily
by the combination of seasonal variations and when revenue is recognized in the
vacation rental and property management industry. Peak seasons for our operating
companies depend upon whether the resort is primarily a summer or winter
destination. During 1998, we derived approximately 26.6% of our pro forma
revenues and 44.1% of our pro forma

operating income in the first quarter and 28.8% of our pro forma revenues and
40.5% of our pro forma operating income in the third quarter. Although the
seasonality of our financial results may be partially mitigated by the
geographic diversity of the existing operating companies and any future
acquisitions, we expect a significant seasonal factor with respect to our
financial results to continue.

Our quarterly financial results may also be subject to fluctuations as a
result of the timing and cost of acquisitions, the timing of real estate sales,
changes in relationships with travel providers, extreme weather conditions or
other factors affecting leisure travel and the vacation rental and property
management industry. Unexpected variations in our quarterly financial results
could adversely affect the price of our common stock which in turn could
adversely affect our proposed acquisition strategy.

OUR BUSINESS DEPENDS UPON THE EFFORTS OF THIRD PARTIES TO MAINTAIN RESORT
FACILITIES AND TO MARKET OUR HAWAIIAN PROPERTIES.

We manage properties that are generally located in destination resorts which
depend upon third parties to maintain resort amenities such as golf courses and
chair lifts. The failure of third parties to continue to maintain resort
amenities could have a material adverse effect on the rental value of our
properties and, consequently, on our business and financial results.

We also depend on travel agents, package tour providers and wholesalers for
a substantial portion of our revenues. During 1998, we derived approximately
17.0% of our consolidated pro forma revenues from sales made through travel
intermediaries. Failure of travel intermediaries to continue to recommend or
package our vacation properties could result in a material adverse effect on our
business and financial results.

OUR BUSINESS COULD BE HARMED IF THE MARKET FOR LEISURE AND VACATION TRAVEL DOES
NOT CONTINUE TO GROW.

Although travel and tourism expenditures in the United States grew at a
compounded annual rate of 6.1% between 1987 and 1997, there have been years in
which spending has declined. We cannot assure you that we or the total market
for vacation property rentals will continue to experience growth. Factors
affecting our ability to continue to experience internal growth include our
ability to:

- maintain existing relationships with property owners;

- expand the number of properties under management;

- increase rental rates and cross-sell among our operating companies; and

- sustain continued demand for our rental inventory.

OUR OPERATIONS ARE CONCENTRATED IN THREE GEOGRAPHIC AREAS.

We manage properties that are significantly concentrated in beach and island
resorts located in Florida and Hawaii and mountain resorts located in Colorado
and Utah. The following table sets forth the December 31, 1998 consolidated pro
forma revenues and percentage of total pro forma revenues derived from each
region (dollars in thousands).

CONSOLIDATED
PRO FORMA % OF TOTAL
REGION REVENUES REVENUES
- -------------------------------------------------------------------- ------------ -----------

Florida............................................................. $ 38,318 38.0%
Hawaii.............................................................. 21,874 21.7
Colorado and Utah................................................... 14,164 14.1
Other(1)............................................................ 26,395 26.2
------------ -----------
Total......................................................... $ 100,751 100.0%
------------ -----------
------------ -----------

- ------------------------

(1) Includes revenues of First Resort Software.

Adverse events or conditions which affect these areas in particular, such as
economic recession, changes in regional travel patterns, extreme weather
conditions or natural disasters, would have a more significant adverse effect on
our operations, than if our operations were more geographically diverse.

OUR BUSINESS DEPENDS ON ATTRACTING AND RETAINING HIGHLY CAPABLE MANAGEMENT AND
EMPLOYEES.

Our business substantially depends on the efforts and relationships of David
C. Sullivan, Chairman and Chief Executive Officer, the other executive officers
of ResortQuest and the senior management of our operating companies.
Furthermore, we will likely be dependent on the senior management of any
businesses acquired in the future. If any of these persons becomes unable or
unwilling to continue in his or her role, or if we are unable to attract and
retain other qualified employees, it could have a material adverse effect on our
business and financial results. Although we have entered into employment
agreements with each of our executive officers and the majority of the managers
of our operating companies, we cannot assure you that any of these individuals
will continue in his or her present capacity for any particular period of time.

POTENTIAL CHANGES IN REQUIRED ACCOUNTING METHODOLOGY COULD NEGATIVELY IMPACT OUR
FUTURE REPORTED FINANCIAL RESULTS.

In April 1999, the Financial Accounting Standards Board preliminarily agreed
to eliminate the use of the pooling of interests method of accounting for
business combinations. Additionally, the Financial Accounting Standards Board is
considering substantially reducing the amortization period for goodwill. We
expect that these changes in accounting treatment will apply to any acquisition
closed after January 1, 2001. The Financial Accounting Standards Board expects
to issue an Exposure Draft in the third quarter of 1999, with a final standard
issued in the fourth quarter of 2000, effective January 1, 2001. Both of these
positions, when issued, could have an adverse effect on our ability to make
future acquisitions and could have a material negative effect on our future
financial results which, in turn, could have a material adverse effect on the
market price of our common stock.

THE SUBSTANTIAL AMOUNT OF GOODWILL RESULTING FROM OUR ACQUISITIONS COULD
ADVERSELY AFFECT OUR FINANCIAL AND OPERATING RESULTS.

Approximately $150.3 million or 69.5% of our total assets at March 31, 1999
is net goodwill, which represents the excess of what we paid over the estimated
fair market value of the net assets we acquired in business combinations
accounted for as purchases. We amortize goodwill on a straight-line basis over a
period of 40 years, except for First Resort Software, whose goodwill is being
amortized over 15 years. The amount of goodwill amortized in a particular period
constitutes a non-cash expense that reduces our net income.

Amortization of goodwill resulting from substantially all of our past
acquisitions, and additional goodwill recorded in certain future acquisitions,
may not be deductible for tax purposes. In addition, we periodically evaluate
the recoverability of goodwill by reviewing the anticipated undiscounted future
cash flows from operations and comparing such cash flows to the carrying value
of the associated goodwill. If goodwill becomes impaired, we would be required
to write down the carrying value of the goodwill and incur a related charge to
our income. A reduction in net income resulting from a write-down of goodwill
would currently affect our financial results and could have a material adverse
impact upon the market price of our common stock.

IF VACATION RENTAL PROPERTY OWNERS DO NOT RENEW A SIGNIFICANT NUMBER OF PROPERTY
MANAGEMENT CONTRACTS OUR BUSINESS WOULD BE ADVERSELY AFFECTED.

We provide rental and property management services to property owners
pursuant to management contracts which generally have one year terms. The
majority of such contracts contain automatic renewal provisions but also allow
property owners to terminate the contract at any time. If property owners do not
renew a significant number of management contracts or we are unable to attract
additional property owners, it would have a material adverse effect on our
business and financial results. In addition, although most of our contracts are
exclusive, industry standards in certain geographic markets dictate that rental
services be provided on a non-exclusive basis. Less than 1% of our revenues for
1998 on a consolidated pro forma basis were derived from rental services
provided on a non-exclusive basis. We are unable to determine the percentage of
the national rental services market that is provided on a non-exclusive basis.

IF HOMEOWNERS' ASSOCIATIONS TERMINATE MANAGEMENT AGREEMENTS, WE COULD LOSE SOME
OF OUR COMPETITIVE ADVANTAGE IN THESE MARKETS.

We currently provide management services at numerous condominium
developments pursuant to contracts with the homeowners' associations. We
frequently provide rental management services for a significant percentage of
the condominiums within these developments. Providing management services for
homeowners' associations frequently leads the associations to request that we
manage and control the front desk operations, laundry facilities and other
related services of the condominium developments. Controlling these services
often gives us a competitive advantage over other vacation rental and property
management companies in retaining the condominiums we currently manage and in
attracting new property owners.

We cannot assure you that a homeowners' association will not terminate its
management agreement with us. If a homeowners' association terminates a
management agreement, we could lose control or management of the front desk and
related services in that condominium development, thereby eliminating our
competitive advantage in that development. If a number of terminations occur, it
could have a material adverse effect on our business and financial results.

WE MAY BE NEGATIVELY AFFECTED BY THE YEAR 2000 PROBLEM.

The vacation property management industry uses complex software. The
potential impact upon our business of Year 2000 issues is greatest in the areas
of property management systems, telecommunications and financial accounting and
reporting. We are in the process of evaluating these various components of our
operating environment and embedded technology. We expect to complete the
analysis and implement any corrective measures by mid-1999.

Although we believe that the consequences of the Year 2000 issues upon our
results of operations will not be material, we will have contingency plans in
place designed to mitigate the impact of Year 2000 issues. All contingency plans
are expected to be developed, tested and implemented by the end of the third
quarter of 1999.

If we should fail to identify or fix all such issues in our operations, or
if we are affected by the inability of a sole-source supplier or a major
customer to continue operations due to such a problem, our operations could be
adversely affected.

COMPETITION COULD RENDER OUR SERVICES UNCOMPETITIVE.

The vacation rental and property management industry is highly competitive
and has low barriers to entry. The industry has two distinct customer groups:
vacation property renters and vacation property owners. We compete for
vacationers and property owners primarily with local vacation rental and
property management companies located in our markets. Some of these competitors
are affiliated with the owners or operators of resorts where these competitors
provide their services. Certain of these competitors may have lower cost
structures and may provide their services at lower rates.

We also compete for vacationers with large hotel and resort companies. Many
of these competitors are large companies that have greater financial resources
than we do, enabling them to finance acquisition and development opportunities,
pay higher prices for the same opportunities or develop and support their own
operations. In addition, many of these companies can offer vacationers services
not provided by vacation rental and property management companies, and they may
have greater name recognition among vacationers. If such companies chose to
compete in the vacation rental and property management industry, they would
constitute formidable competition for our business. Such competition could cause
us to lose management contracts, increase expenses or reduce management fees
which could have a material adverse effect on our business and financial
results.

EXISTING MANAGEMENT, DIRECTORS AND THEIR AFFILIATES OWN ENOUGH SHARES TO
EXERCISE SUBSTANTIAL INFLUENCE OVER MATTERS REQUIRING A VOTE OF STOCKHOLDERS.

Management, directors and affiliated entities, as of March 31, 1999, owned
shares of common stock representing approximately 39% of the total voting power
of the common stock. They would own approximately 41% of the voting power of the
common stock if all shares of voting-restricted common stock, which are entitled
to one-half vote per share, were converted into unrestricted common stock. These
persons, if acting together, will likely be able to exercise substantial
influence over our affairs, to elect all of the directors and to control the
disposition of any matter submitted to a vote of stockholders.

ANY ADVERSE CHANGE IN THE REAL ESTATE MARKET COULD ADVERSELY AFFECT OUR
FINANCIAL AND OPERATING RESULTS.

We derived approximately 11% of our consolidated pro forma revenues for 1998
from net real estate brokerage commissions. Any factors which adversely affect
real estate sales, such as a downturn in general economic conditions or changes
in interest rates, the tax treatment of second homes or property values, could
have a material adverse effect on our business and financial results.

WE ARE SUBJECT TO GOVERNMENTAL REGULATION OF THE VACATION RENTAL AND PROPERTY
MANAGEMENT INDUSTRY.

Our operations are subject to various federal, state, local and foreign laws
and regulations, including licensing requirements applicable to real estate
operations and the sale of alcoholic beverages, laws and regulations relating to
consumer protection and local ordinances. Many states have adopted specific laws
and regulations which regulate our activities, such as:

- anti-fraud laws;

- real estate and travel services
provider license requirements;

- environmental laws;

- telemarketing laws;

- labor laws; and

- the Fair Housing Act.

We believe that we are in material compliance with all federal, state, local
and foreign laws and regulations to which we are currently subject. However, we
cannot assure you that the cost of qualifying under applicable regulations in
all jurisdictions in which we desire to conduct business will not be significant
or that we are actually in compliance with all applicable federal, state, local
and foreign laws and regulations. Compliance with or violation of any current or
future laws or regulations could require us to make material expenditures or
otherwise have a material adverse effect on our business and financial results.

TRANSACTIONS BETWEEN OUR OPERATING COMPANIES AND THEIR AFFILIATES MAY RESULT IN
CONFLICTS OF INTEREST.

Several lease agreements, management contracts and other agreements with
stockholders of our operating companies and entities controlled by them
continued after the closing of the acquisitions of our operating companies. We
have also entered into certain similar agreements that became effective upon
such acquisitions. In addition, we may enter into similar agreements in the
future. Other than a loan agreement with the former principal stockholder of
Aston Hotels & Resorts, a founding company, we believe existing agreements with
related persons are, and that all future agreements will be, on terms no less
favorable to us than we could obtain from unrelated third parties. Conflicts of
interests may arise between us and these related persons.

At March 31, 1999, the former principal stockholder of Aston owed us
approximately $4.3 million, either directly or through entities controlled by
him, including properties managed by Aston. Of this amount, $4.0 million is
fully collateralized by cash or cash equivalents and real estate or by the
former principal stockholder's personal guarantee, which guarantee may not
exceed $1.0 million.

THE NUMBER OF SHARES AVAILABLE FOR SALE AFTER THIS OFFERING COULD CAUSE OUR
STOCK PRICE TO DECLINE.

The market price of our common stock could drop as a result of the sale of
substantial amounts of our common stock in the public market, or the perception
that such sales could occur.

Of the 3,000,000 shares of common stock that we have registered for use as
consideration in our future acquisitions, we have issued 1,514,754 shares in
connection with the 12 acquisitions which closed since the initial public
offering. All of these shares were registered under the Securities Act and
147,374 of these shares are subject to certain contractual transfer restrictions
expiring between May 30, 1999 and February 1, 2001. The remaining 1,367,380
registered shares are generally freely tradeable after issuance, unless the
resale thereof is contractually restricted or unless the holders thereof are
subject to the restrictions on resale provided in Rule 145 under the Securities
Act.

ResortQuest stockholders, who include representatives of Alpine Consolidated
II, LLC and Capstone Partners, LLC (entities which initially capitalized
ResortQuest), former stockholders of the founding companies, directors and
management have agreed not to sell, transfer or otherwise dispose of 8,497,282
shares for a period beginning on May 26, 1999 and ending 90 days from the date
of this prospectus without the prior written consent of Salomon Smith Barney
Inc. Of the 8,497,282 shares, Salomon Smith Barney Inc. has waived the lock-up
with respect to 1,962,311 shares to be sold by the selling stockholders in this
offering. The remaining 37,689 shares being sold by the selling stockholders
were not subject to any lock-up agreements. Upon completion of this offering and
expiration of the lock-up agreements, an aggregate of 6,534,971 additional
shares will be available for sale to the public upon expiration of any Rule 145
restrictions and subject to any limitations imposed by Rule 144.

OUR STOCK PRICE MAY BE ADVERSELY AFFECTED BY MARKET VOLATILITY.

The following factors, among others, may cause the market price of our
common stock to significantly increase or decrease:

- variations in our annual or quarterly financial results or the financial
results of our competitors;

- changes by financial research analysts in their estimates of our earnings;

- our failure to meet financial research analysts' estimates of our
earnings;

- conditions in the general economy, or the vacation and property rental
management or leisure and travel industries in particular;

- unfavorable publicity about us or our industry; and

- significant price and volume volatility in the stock market in general for
reasons unrelated to us.

DELAWARE LAW, OUR CHARTER DOCUMENTS AND STOCKHOLDER RIGHTS PLAN CONTAIN
PROVISIONS THAT MAY HAVE AN ANTI-TAKEOVER EFFECT.

We are subject to Section 203 of the Delaware General Corporation Law, which
generally prohibits us from engaging in a broad range of business combinations
with an interested stockholder for a period of three years after such a person
first becomes an interested stockholder. Interested stockholders include our
affiliates, associates and anyone who owns 15% or more of our outstanding voting
stock. The provisions of Section 203 could delay or prevent a change of control
of ResortQuest.

Provisions of our certificate of incorporation could make it more difficult
for a third party to acquire control of ResortQuest, even if such change in
control would be beneficial to stockholders. The

directors are allowed to issue preferred stock without stockholder approval.
Such issuances could make it more difficult for a third party to acquire
ResortQuest. Our bylaws contain provisions that may have an anti-takeover
effect, such as the requirement that we must receive notice of nomination of
directors not less than 60 nor more than 90 days prior to the date of the annual
meeting.

On February 25, 1999, our board of directors adopted a stockholder rights
plan designed to protect our stockholders in the event of takeover action that
would deny them the full value of their investment. Under this plan, a dividend
distribution of one right for each share of common stock was declared to holders
of record at the close of business on March 15, 1999. The rights will also
attach to common stock issued after March 15, 1999. The rights will become
exercisable only in the event, with certain exceptions, an acquiring party
accumulates 15% or more of our voting stock, or if a party announces an offer to
acquire 15% or more of our voting stock. The rights will expire on March 15,
2009. Each right will entitle the holder to buy one one-hundredth of a share of
a new series of preferred stock at a price of $87.00. In addition, upon the
occurrence of certain events, holders of the rights will be entitled to purchase
either our stock or shares in an "acquiring entity" at half of market value. We
generally will be entitled to redeem the rights at $0.01 per right at any time
until the date on which a 15% position in our voting stock is acquired by any
person or group.

The rights plan is designed to prevent the use of coercive and/or abusive
takeover techniques and to encourage any potential acquiror to negotiate
directly with our board of directors for the benefit of all stockholders. In
addition, the rights plan is intended to provide increased assurance that a
potential acquiror would pay an appropriate control premium in connection with
any acquisition of ResortQuest. Nevertheless, the rights plan could be utilized,
under certain circumstances, as a method of discouraging, delaying or preventing
a change of control.

FORWARD-LOOKING STATEMENTS

This prospectus contains statements about activities, events or developments
which we expect or anticipate will or may occur in the future, including:

- business strategies;

- market potential;

- acquisitions of assets and businesses;

- industry trends;

- financial performance; and

- other matters.

We also use in this prospectus the words "intend to," "anticipate," "expect,"
and similar expressions to identify those types of forward-looking statements.
These statements are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based on
certain assumptions and analyses we have made in light of our perception of
historical trends, current business and economic conditions and expected future
developments as well as other factors. However, whether actual results and
developments will conform with our expectations and predictions is subject to a
number of risks and uncertainties beyond our control, including:

- the risk factors discussed in this prospectus;

- general economic, market or business conditions;

- changes in laws or regulations;

- business opportunities, or lack thereof, that may be presented to and
pursued by us; and

- other factors.

Consequently, we cannot assure you that the actual results or developments we
anticipate will be realized or, even if substantially realized, that they will
have the expected consequences to or effects on us.

USE OF PROCEEDS

The net proceeds we will receive from the sale of the 2,000,000 shares of
common stock we offer in this prospectus, assuming an offering price of $14.69
per share, will be approximately $27.4 million after deducting estimated
underwriting discounts and commissions and the estimated offering expenses. We
expect to use these proceeds primarily for:

- strategic acquisitions;

- working capital; and

- general corporate purposes.

The amounts we actually spend may vary significantly and will depend on a number
of factors, including future revenues and the various uncertainties about our
business described under "Risk Factors." Accordingly, our management has broad
discretion in the allocation of the net proceeds. Pending such uses, the net
proceeds of this offering will be invested in short-term, interest-bearing
investment-grade securities.

The net proceeds the selling stockholders will receive from their sale of
the 2,000,000 shares of common stock they offer in this prospectus, assuming an
offering price of $14.69 per share, will be approximately $27.8 million ($36.2
million if the underwriters' over-allotment option is exercised in full) after
deducting estimated underwriting discounts and commissions. We will not receive
any proceeds from the sale of shares sold by the selling stockholders.

PRICE RANGE OF COMMON STOCK

Our common stock trades on the New York Stock Exchange under the symbol
"RZT." We completed our initial public offering in May 1998 at a price of $11.00
per share. The following table sets forth the high and low sales prices for the
common stock for the second, third and fourth quarters of the fiscal year ended
December 31, 1998, and for the first and part of the second quarter of the
fiscal year ending December 31, 1999.

HIGH LOW
----------- -----------

Fiscal Year Ended December 31, 1998
Second Quarter (from May 20, 1998).............................. $ 18.7500 $ 13.9375
Third Quarter................................................... 17.1250 8.8125
Fourth Quarter.................................................. 14.7500 6.5000
Fiscal Year Ending December 31, 1999
First Quarter................................................... 22.9375 13.9375
Second Quarter (through May 20, 1999)........................... 17.5000 14.5000

On May 20, 1999, the last reported sales price of the common stock on the
NYSE was $14.69 per share. On May 20, 1999, there were 233 holders of record of
common stock, although we believe the number of beneficial holders is
substantially greater.

DIVIDEND POLICY

We intend to retain all of our earnings, if any, to finance the expansion of
our business and for general corporate purposes, including future acquisitions,
and do not anticipate paying any cash dividends on our common stock for the
foreseeable future. In addition, our credit facility includes restrictions on
our ability to pay dividends without the consent of the lenders.

CORPORATE INFORMATION

Our executive offices are located at 530 Oak Court Drive, Suite 360,
Memphis, Tennessee 38117, and our telephone number is (901) 762-0600.
Information contained in our web site, RESORTQUEST.COM, is not part of this
prospectus. We have filed applications to register each of the following
servicemarks in each of the United States, Canada and European Union:
ResortQuest, ResortQuest International, QuestClub, ResortQuest International's
star logo and Vacation Rentals From Sand to Snow.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 1999 on an
actual basis and on an as adjusted basis to give effect to the receipt of the
net proceeds from our sale of the 2,000,000 shares of common stock we offer in
this prospectus at an assumed offering price of $14.69 per share and the receipt
of the net proceeds from our pending placement of $50 million of senior secured
notes, expected to close by June 1, 1999. You should read this table together
with the Consolidated Financial Statements and the related Notes included later
in this prospectus.

AS OF MARCH 31, 1999
----------------------------------------

ACTUAL ADJUSTMENTS AS ADJUSTED
---------- ------------- -------------

(IN THOUSANDS, EXCEPT SHARE DATA)

Current maturities of long-term debt................................... $ 906 $ -- $ 906
Long-term debt, less current maturities................................ 49,214 2,000 51,214
---------- ------------- -------------
50,120 2,000 52,120
---------- ------------- -------------
Stockholders' equity:
Common stock, $0.01 par value, 50,000,000 shares authorized, 17,389,645
shares outstanding and 19,389,645 shares outstanding, as adjusted
(1).................................................................. 174 20 194
Additional paid-in capital............................................. 140,781 27,413 168,194
Excess distributions................................................... (29,500) -- (29,500)
Retained earnings...................................................... 2,806 -- 2,806
---------- ------------- -------------
Total stockholders' equity......................................... 114,261 27,433 141,694
---------- ------------- -------------
Total capitalization........................................... $ 164,381 $ 29,433 $ 193,814
---------- ------------- -------------
---------- ------------- -------------

- ------------------------

(1) Excludes 1,886,851 shares of common stock issuable upon exercise of
outstanding options.

SELECTED CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

On May 26, 1998, we consummated our initial public offering and the
acquisition of our 13 founding companies. For financial statement presentation
purposes, Aston was designated as the "accounting acquiror." We also completed
five additional acquisitions in 1998 after the initial public offering and seven
additional acquisitions in 1999. The historical consolidated financial statement
data include the financial results of Aston and our three acquisitions accounted
for as poolings of interests prior to the acquisition of the 13 founding
companies and the initial public offering, and include the combined balances and
transactions of ResortQuest and the 13 founding companies only since May 26,
1998. The financial results of our remaining nine acquisitions completed since
the initial public offering have been reflected since their respective dates of
acquisition. The following consolidated statements of pro forma income present
certain data for ResortQuest, excluding income from discontinued operations, as
adjusted for:

- the effects of our acquisition of the 13 founding companies as if they had
occurred on January 1, 1998;

- the effects of our acquisition of Abbott Resorts as if it had occurred on
January 1, 1998;

- the effects of an assumed comparable corporate expense for each of the
four quarters ended December 31, 1998, based on actual corporate expense
incurred for the three months ended March 31, 1999;

- the effects of goodwill amortization, which is principally not deductible
for income tax purposes, recorded as a result of the acquisitions of the
13 founding companies and Abbott Resorts;

- the effects of the provision for federal and state income taxes relating
to converting certain operations to C Corporation status and the tax
impact of pro forma adjustments;

- the effects of excluding certain depreciation and interest expense related
to certain assets and liabilities not acquired from the 13 founding
companies and Abbott Resorts.

Our shares used in computing pro forma net income per share include:

- 6,119,656 shares issued to owners of the 13 founding companies;

- 3,134,630 shares issued to our management and founders;

- 392,780 shares used in the purchase of our three acquisitions accounted
for as poolings of interests;

- 757,040 shares used in the purchase of Abbott Resorts;

- the weighted average effect of issuing 315,539 shares used in the purchase
of our remaining acquisitions; and

- the dilutive effect of options outstanding in calculating diluted pro
forma net income per share.

You should read this information together with the Consolidated Financial
Statements and the related Notes included elsewhere in this prospectus.

THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- --------------------
1995 1996 1997 1998 1998 1999
--------- --------- --------- --------- --------- ---------
1994
---------
(UNAUDITED) (UNAUDITED)

HISTORICAL CONSOLIDATED STATEMENTS OF
INCOME DATA:
Revenues............................... $ 24,966 $ 24,031 $ 25,670 $ 26,753 $ 55,359 $ 8,666 $ 31,656
Direct operating expenses.............. 13,947 12,482 14,860 13,635 31,596 4,411 14,469
General and administrative expenses,
including depreciation and
amortization......................... 8,297 8,171 6,840 7,613 18,273 1,729 10,995
--------- --------- --------- --------- --------- --------- ---------
Operating income....................... 2,722 3,378 3,970 5,505 5,490 2,526 6,192
Interest and other expense, net........ 224 728 342 86 507 233 647
Provision for income taxes............. -- -- 90 90 1,518 28 2,505
--------- --------- --------- --------- --------- --------- ---------
Income from continuing operations...... $ 2,498 $ 2,650 $ 3,538 $ 5,329 $ 3,465 $ 2,265 $ 3,040
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------

YEAR ENDED THREE MONTHS ENDED MARCH 31,
DECEMBER 31, ------------------------------
1998 1998 1999
----------------- -------------- --------------

CONSOLIDATED STATEMENTS OF PRO FORMA INCOME (UNAUDITED):
Revenues:
Property management fees.................................... $ 52,942 $ 16,437 $ 18,364
Service fees................................................ 25,852 6,098 7,717
Other....................................................... 21,957 4,292 5,528
----------------- -------------- --------------
100,751 26,827 31,609
Direct operating expenses..................................... 52,290 12,435 14,427
General and administrative expenses........................... 29,779 7,282 8,966
Depreciation and amortization................................. 5,746 1,401 1,558
----------------- -------------- --------------
Operating income.............................................. 12,936 5,709 6,658
Interest and other expense, net............................... 2,082 592 647
----------------- -------------- --------------
Income before income taxes.................................... 10,854 5,117 6,011
Provision for income taxes.................................... 5,457 2,278 2,682
----------------- -------------- --------------
Net income.................................................... $ 5,397 $ 2,839 $ 3,329
----------------- -------------- --------------
----------------- -------------- --------------
Basic net income per share.................................... $ 0.32 $ 0.17 $ 0.19
----------------- -------------- --------------
----------------- -------------- --------------
Shares used in computing basic pro forma net income per
share....................................................... 17,075,661 17,074,106 17,353,989
----------------- -------------- --------------
----------------- -------------- --------------
Diluted net income per share.................................. $ 0.31 $ 0.17 $ 0.19
----------------- -------------- --------------
----------------- -------------- --------------
Shares used in computing diluted pro forma net income per
share....................................................... 17,215,083 17,074,106 17,786,211
----------------- -------------- --------------
----------------- -------------- --------------

AS OF DECEMBER 31, AS OF MARCH 31, 1999
----------------------------------------------------- ----------------------
1994 1995 1996 1997 1998 ACTUAL AS ADJUSTED
--------- --------- --------- --------- --------- --------- -----------

(UNAUDITED)
BALANCE SHEET DATA:
Working capital (deficit) surplus.. $ (4,076) $ (3,384) $ (1,940) $ (4,579) $ (2,080) $ (4,868) $ 23,665
Total assets....................... 10,873 15,760 16,658 19,072 188,219 216,239 245,672
Long-term debt, net of current
maturities....................... 2,582 2,378 3,060 4,122 38,098 49,214 51,214
Stockholders' (deficit) equity..... (195) 268 (54) (397) 106,855 114,261 141,694

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION SHOULD BE READ WITH "SELECTED CONSOLIDATED
FINANCIAL DATA" AND THE CONSOLIDATED FINANCIAL STATEMENTS AND RELATED NOTES
APPEARING ELSEWHERE IN THIS PROSPECTUS.

OVERVIEW

ResortQuest was founded in September 1997 but conducted no operations and
generated no revenues prior to our initial public offering in May 1998, when we
simultaneously acquired the 13 founding companies, consisting of 12 vacation
rental and property management companies and one software company. Since May
1998, we have completed 12 additional vacation rental and property management
acquisitions, five in 1998 and seven in 1999. The additional 1998 acquisitions
included approximately 3,000 vacation rental condominiums and homes under
management, located in two existing markets and three new markets. These
acquisitions cost $45.0 million and were financed through a combination of stock
and cash. The seven additional 1999 acquisitions included approximately 1,600
vacation rental condominiums and homes under management, located in one existing
market and six new markets. The 1999 acquisitions cost $24.2 million and were
financed through a combination of stock and cash. We now manage approximately
15,000 condominiums and homes throughout the United States and in Canada at 30
premier destination resort locations. In addition, 11 of our operating companies
offer real estate brokerage services. First Resort Software is a leading
provider of integrated management services and reservations and accounting
software for the vacation rental and property management industry.

Our revenues are derived primarily from property rental fees on vacation
condominium and home rentals, and service fees from additional services provided
to vacationers and property owners. We receive property rental fees when the
properties are rented, which are generally a percentage of the rental price of
the vacation property. Rental fees range from approximately 3% to over 40% based
on:

- the market;

- the type of services provided to the property owner;

- the type of rental unit managed; and

- which party bears responsibility for operating expenses.

Our revenues are recognized based on our proportionate share of the total rental
price of the vacation condominium or home, and are recognized ratably over the
rental period.

Direct operating expenses include direct compensation, telecommunication
expenses, housekeeping supplies, printing, marketing and food & beverage costs.
Compensation includes salary, wages, bonus and benefits for employees involved
with the rental or maintenance of the rental units, housekeeping, reservations,
marketing and the food & beverage facilities. Telecommunication costs result
primarily from the cost of toll-free numbers, as well as the cost of telephone
service we provide to property owners in certain markets. General and
administrative expenses consist primarily of salary, wages, bonus and benefits
for senior management, general managers and other non-operational personnel,
fees for professional services, rent and other general office expenses.

Before we acquired our operating companies, they operated as independent,
privately-owned entities, and their results of operations reflect varying tax
structures, including some S Corporations and some C Corporations, which have
influenced the historical level of owners' compensation. Our operating
companies' owners and key employees agreed to certain, and in some cases
substantial, reductions in their salary, bonus and benefits in connection with
our acquisitions of the operating companies.

In July 1996, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 97 relating to business combinations immediately prior to an
initial public offering. Staff Accounting

Bulletin No. 97 requires that these combinations be accounted for using the
purchase method of acquisition accounting. Under the purchase method, one of the
combining companies must be designated as the accounting acquiror. Aston was
identified as the accounting acquiror for financial statement presentation
purposes and therefore Aston's financial statements were carried over at
historical basis. For the remaining founding companies, $72.7 million,
representing the excess of the fair value of the merger consideration received
over the fair value of the net assets acquired, was recorded as "goodwill" on
our balance sheet. In addition, goodwill of $25.5 million was recorded and
attributed to the voting-restricted common stock issued to our management and
consultants. Additionally, we recorded additional goodwill of $33.8 million in
conjunction with the five additional acquisitions completed in 1998 and $21.1
million in conjunction with the seven additional acquisitions completed during
the three months ended March 31, 1999. Goodwill is being amortized as a non-cash
charge to the income statement over a 40-year period other than the goodwill
associated with the acquisition of First Resort Software, which is being
amortized over a 15-year period. We recognized $1.8 million of goodwill
amortization in 1998 and $977,000 for the three months ended March 31, 1999. In
addition, the $29.5 million paid to the owners of Aston in conjunction with the
acquisition of the founding companies has been reflected as excess distributions
in the Consolidated Statements of Changes in Stockholders' Equity.

RESULTS OF CONTINUING OPERATIONS--ACTUAL

Our historical consolidated financial information for periods prior to the
initial public offering include the operating results of Aston, which was
identified as the accounting acquiror for financial reporting purposes, and the
historical results of our three acquisitions accounted for under the pooling of
interests method. Since May 26, 1998, the historical consolidated financial
information include the combined balances and transactions of ResortQuest, our
13 founding companies and our acquisitions completed from their respective dates
of acquisition. Comparability of historical results of operations for the
periods presented may be misleading and are not necessarily indicative of future
results of the combined operations.

The following table sets forth our actual consolidated results of operations
for the years ended December 31, 1996, 1997 and 1998 and the three months ended
March 31, 1998 and 1999.

YEARS ENDED DECEMBER 31,
---------------------------------------------------------------------------------------------------

(dollars in thousands) 1996 1997 1998

------------------------------- --------------------------------- -------------------------------

Revenues................. $ 25,670 100.0 % $ 26,753 100.0 % $ 55,359 100.0 %
Direct operating
expenses............... 14,860 57.9 13,635 51.0 31,596 57.1
General and
administrative
expenses............... 6,415 25.0 7,092 26.5 15,125 27.3
Depreciation and
amortization........... 425 1.6 521 1.9 3,148 5.6
--------- ------- ----------- ------- --------- -------
Operating income......... $ 3,970 15.5 % $ 5,505 20.6 % $ 5,490 10.0 %
--------- ------- ----------- ------- --------- -------
--------- ------- ----------- ------- --------- -------

THREE MONTHS ENDED MARCH 31,
------------------------------------------------------------------

(dollars in thousands) 1998 1999
------------------------------- ---------------------------------
(UNAUDITED)

Revenues................. $ 8,666 100.0 % $ 31,656 100.0 %
Direct operating
expenses............... 4,411 50.9 14,469 45.7
General and
administrative
expenses............... 1,614 18.6 9,437 29.8
Depreciation and
amortization........... 115 1.4 1,558 4.9
--------- ------- ----------- -------
Operating income......... $ 2,526 29.1 % $ 6,192 19.6 %
--------- ------- ----------- -------
--------- ------- ----------- -------

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31,
1998--ACTUAL

REVENUES. Revenues increased $23.0 million, or 265.3%, from $8.7 million in
1998 to $31.7 million in 1999, which was primarily due to the revenue impact of
our acquisition of the 13 founding companies and our additional acquisitions
completed since our initial public offering. For the three months ended March
31, 1999, revenues from our acquisitions for the Hawaii, Mountain, Beach, Desert
and Other segments were $489,000, $10.6 million, $9.7 million, $1.3 million and
$867,000, respectively.

DIRECT OPERATING EXPENSES. Direct operating expenses increased $10.1
million, or 228.0%, from $4.4 million in 1998 to $14.5 million in 1999, which
was primarily due to the expense impact of our acquisition of the 13 founding
companies and our additional acquisitions completed since our initial public
offering. As a percentage of revenues, direct operating expenses decreased from
50.9% in 1998 to 45.7% in 1999. For the three months ended March 31, 1999,
direct operating expenses from our

acquisitions for the Hawaii, Mountain, Beach, Desert and Other segments were
$162,000, $4.3 million, $5.9 million, $63,000 and $466,000, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses,
including depreciation and amortization, increased $9.3 million, or 535.9%, from
$1.7 million in 1998 to $11.0 million in 1999, which was primarily due to the
expense impact of our acquisition of the 13 founding companies, our additional
acquisitions completed since our initial public offering and incremental
public-company expenses. Depreciation and amortization expense increased
primarily due to goodwill amortization arising from our acquisitions. As a
percentage of revenues, general and administrative expenses increased from 18.6%
in 1998 to 29.8% in 1999. For the three months ended March 31, 1999, general and
administrative expenses, including depreciation and amortization, from our
acquisitions for the Hawaii, Mountain, Beach, Desert and Other segments were
$101,000, $1.3 million, $4.3 million, $463,000 and $2.7 million, respectively.

TWELVE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1997--ACTUAL

REVENUES. Revenues increased $28.6 million, or 106.9%, from $26.8 million
in 1997 to $55.4 million in 1998, primarily due to the revenue impact of our
acquisition of the 13 founding companies and our five additional acquisitions
completed in 1998. Revenues for 1998 related to Aston and our acquisitions
accounted for as poolings of interests were relatively flat as compared to the
prior year despite the continued pressures, related to Aston, from the troubled
Asian inbound market. Revenues from our additional acquisitions completed in
1998 for the Hawaii, Mountain, Beach and Other segments were $800,000, $5.4
million, $21.8 million and $2.0 million, respectively.

DIRECT OPERATING EXPENSES. Direct operating expenses increased $18.0
million, or 131.7%, from $13.6 million in 1997 to $31.6 million in 1998,
primarily due to the expense impact of our acquisition of the 13 founding
companies and our five additional acquisitions completed in 1998. Direct
operating expenses for 1998 related to Aston and our acquisitions accounted for
as poolings of interests increased $332,000, as compared to the prior year,
primarily due to an increase in guaranteed payments made under some contracts.
The timing, size and location of acquisitions have a significant impact on
operating margins. Direct operating expense margins increased 6.1 percentage
points, from 51.0% in 1997 to 57.1% in 1998. The Mountain segment and southern
Florida peak seasons are reflected in the first quarter and the Beach segment
peak season is reflected in the third quarter. Direct operating expenses from
our 1998 acquisitions for the Hawaii, Mountain, Beach and Other segments were
$200,000, $4.6 million, $11.8 million and $1.1 million, respectively.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses,
including depreciation and amortization, increased $10.7 million, or 140.0%,
from $7.6 million in 1997 to $18.3 million in 1998, primarily due to the expense
impact of our acquisition of the 13 founding companies, our five additional
acquisitions completed in 1998, and incremental public-company expenses. General
and administrative expenses for 1998 related to Aston and our acquisitions
accounted for as poolings of interests decreased $1.1 million as compared to the
prior year, primarily due to the implementation of cost control measures.
Depreciation and amortization expense increased primarily due to goodwill
amortization arising from our acquistions. General and administrative expenses,
including depreciation and amortization, from our 1998 acquisitions for the
Hawaii, Mountain, Beach and Other segments were $500,000, $2.3 million, $5.9
million and $3.1 million, respectively.

TWELVE MONTHS ENDED DECEMBER 31, 1997 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1996--ACTUAL

REVENUES. Revenues increased $1.1 million, or 4.2%, from $25.7 million in
1996 to $26.8 million in 1997.

DIRECT OPERATING EXPENSES. Direct operating expenses decreased
approximately $1.2 million, or 8.2%, from $14.9 million in 1996 to $13.6 million
in 1997, primarily due to a reduction in salaries, bonuses, and promotional and
marketing expenses. As a percentage of revenues, direct operating expenses
decreased from 57.9% in 1996 to 51.0% in 1997.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $677,000, or 10.6%, from $6.4 million in 1996 to $7.1 million in 1997.
As a percentage of revenues, operating income increased from 15.5% in 1996 to
20.6% in 1997.

OTHER--ACTUAL

The following table sets forth other historical items affecting consolidated
net income for the three years ended December 31, 1996, 1997 and 1998 and the
three months ended March 31, 1998 and 1999.

THREE MONTHS
YEARS ENDED DECEMBER ENDED MARCH
31, 31,
---------------------- ------------
(dollars in thousands) 1996 1997 1998 1998 1999
----- ------- ------ ----- -----
(UNAUDITED)

Interest expense................................................................ $ 736 $ 763 $ 403 $ 233 $ 889
Other income (expense).......................................................... 394 677 (104) -- 242
Income (loss) from discontinued operations...................................... 455 (1,494) 1,347 1,557 --
Effective tax rate.............................................................. 2.5% 1.7% 30.5% 1.2% 45.2%

Aston's operations were primarily financed through working capital and
long-term debt resulting in higher levels of interest expense prior to our
acquisition of the 13 founding companies. Concurrent with our initial public
offering, we assumed $30,000 of Aston's debt. We also assumed approximately $5.7
million of debt from some of the 13 founding companies, which was paid off by us
after the initial public offering. The cash portion of the purchase price for
our acquisitions completed since the initial public offering increased
borrowings under our credit facility, which caused interest expense to increase
during the fourth quarter 1998 and the three months ended March 31, 1999.

We have decided that we will no longer continue or enter into leasing
arrangements for lodging facilities. Accordingly, for all periods presented, the
results of operations for the leased operations are reflected as discontinued
operations. Concurrent with the acquisition of the 13 founding companies, Aston
assigned such leases to a corporation owned by Aston's principal stockholder. On
May 27, 1998, we entered into a contract with this corporation to manage these
facilities for a fee.

ResortQuest's effective tax rate for the period ended March 31, 1999 was
impacted by the amortization of goodwill, most of which is not deductible for
income tax purposes. ResortQuest's effective tax rate for the year ended
December 31, 1998 was impacted by:

- earnings prior to May 26, 1998 which were not included in our consolidated
income tax returns;

- amortization of goodwill which is principally not deductible for income
tax purposes; and

- the recording of a one-time cumulative deferred income tax entry for
Aston, which was previously taxed under S Corporation status.

The effective tax rate for the years ended December 31, 1997 and 1996 and the
three months ended March 31, 1998 were not impacted by Aston as it qualified and
filed as an S Corporation. The effective tax rate was impacted by the income
taxes related to our acquisitions accounted for as poolings of interests.

RESULTS OF OPERATIONS--PRO FORMA

Due to the significance of the acquisitions completed since our initial
public offering in May 1998, a comparison of pro forma results for the year
ended December 31, 1998 and the three months ended March 31, 1999 against pro
forma results for the comparable prior periods is necessary to provide better
comparability of our results of operations. The unaudited pro forma information
presented

below includes all adjustments necessary in management's opinion to present
fairly the effects of these transactions and is not necessarily indicative of
the results of operations that we would have realized for the periods indicated,
nor does it purport to represent our financial condition or results of
operations as of any future date or for any future period.

For the three months ended March 31, 1999 and the year ended December 31,
1998, ResortQuest recognized $18.4 million and $52.9 million, respectively, of
property management fees representing 58.1% and 52.6%, respectively, of our
consolidated pro forma revenues. Additional services provided to vacationers,
such as reservations, housekeeping, long-distance telephone, lift tickets, beach
equipment and pool cleaning are charged separately and recorded as service fees
by ResortQuest. For the three months ended March 31, 1999 and the year ended
December 31, 1998, we recognized $7.7 million and $25.9 million, respectively,
of service fees representing 24.4% and 25.7%, respectively, of our consolidated
pro forma revenues. Our remaining $5.5 million and $22.0 million of consolidated
pro forma revenues for the three months ended March 31, 1999 and the year ended
December 31, 1998, respectively, were derived from other sources, including
management of homeowners' associations, the sale and service of vacation rental
and property management software, net broker commissions on real estate sales
and food & beverage sales. These other revenues represented 17.5% and 21.8% of
our consolidated pro forma revenues for the three months ended March 31, 1999
and the year ended December 31, 1998, respectively.

The consolidated statements of pro forma income present data for
ResortQuest, excluding income or loss from discontinued operations, as adjusted
for:

- the effects of our acquisition of the 13 founding companies as if they had
occurred on January 1, 1997;

- the effects of our acquisition of Abbott Resorts as if it had occurred on
January 1, 1997;

- the effects of an assumed comparable corporate expense for each of the
four quarters ended December 31, 1997 and 1998, based on actual corporate
expense incurred for the three months ended March 31, 1999;

- the effects of goodwill amortization, which is principally not deductible
for income tax purposes, recorded as a result of the acquisitions of the
13 founding companies and Abbott Resorts;

- the effects of the provision for federal and state income taxes relating
to converting certain operations to C Corporation status and the tax
impact of pro forma adjustments;

- the effects of excluding certain depreciation and interest expense related
to certain assets and liabilities not acquired from the 13 founding
companies and Abbott Resorts.

HAWAIIAN RESORTS--PRO FORMA

The following table sets forth the Hawaiian resorts' consolidated pro forma
results of operations for the years ended December 31, 1997 and 1998 and the
three months ended March 31, 1998 and 1999.

YEARS ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------ ------------------------------------------
(dollars in thousands) 1997 1998 1998 1999
-------------------- -------------------- -------------------- --------------------

Revenues............... $ 21,960 100.0% $ 21,874 100.0% $ 7,257 100.0% $ 6,425 100.0%
Operating expenses..... 14,322 65.2 15,713 71.8 4,073 56.1 3,820 59.5
--------- --------- --------- --------- --------- --------- --------- ---------
Operating income....... $ 7,638 34.8% $ 6,161 28.2% $ 3,184 43.9% $ 2,605 40.5%
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31,
1998--HAWAII

REVENUES. Revenues decreased $832,000, or 11.5%, from $7.3 million in 1998
to $6.4 million in 1999, primarily due to fewer units under management in 1999,
reflecting normal turnover in properties under management as a result of real
estate sales in the market. The average daily rate in Hawaii was down slightly
due to the continued pressures from the Asian economic crisis, but occupancy was
up 5.0 percentage points.

OPERATING EXPENSES. Operating expenses decreased $253,000, or 6.2%, from
$4.1 million in 1998 to $3.8 million in 1999. As a percentage of revenues,
operating expenses increased from 56.1% in 1998 to 59.5% in 1999. This increase
was primarily attributable to new management contracts which were entered into
since March 31, 1998 and have not yet completely benefited from our marketing
initiatives.

TWELVE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1997--HAWAII

REVENUES. Revenues in 1997 include a $677,000 gain from the sale of our
interest in a Hawaiian hotel. Excluding this gain, revenues increased $591,000,
or 2.8%, from $21.3 million in 1997 to $21.9 million in 1998, primarily due to a
slight increase in average daily rate that helped maintain revenue per available
unit.

Hawaii overall was impacted in 1998 by the Northwest Airlines strike during
third quarter 1998 and the continued pressures from the troubled Asian inbound
market. Northwest Airlines accounts for approximately 15% of the available
airline seating into the Hawaiian Islands. Occupancy rates in the third quarter
declined compared to the prior year. However, Aston was not as negatively
impacted by the Asian crisis as compared to the overall market. Inbound
vacationers from Asia account for about one-third of Hawaii's visitors. These
vacationers seem to prefer Waikiki Beach, which is on the Hawaiian Island of
Oahu. For several years, Aston shifted most of its business to the United States
mainland wholesalers and increased its inventory of management contracts on the
neighbor islands away from Waikiki Beach.

OPERATING EXPENSES. Operating expenses increased $1.4 million, or 9.8%,
from $14.3 million in 1997 to $15.7 million in 1998. As a percentage of
revenues, operating expenses increased from 65.2% in 1997 to 71.8% in 1998,
primarily due to the Northwest Airlines strike in the third quarter of 1998.

MOUNTAIN RESORTS--PRO FORMA

The following table sets forth the mountain resorts' consolidated pro forma
results of operations for the years ended December 31, 1997 and 1998 and the
three months ended March 31, 1998 and 1999.

Revenues.................. $ 17,514 100.0% $ 18,186 100.0% $ 9,658 100.0% $ 12,397 100.0%
Operating expenses........ 15,533 88.7 15,442 84.9 4,946 51.2 6,678 53.9
--------- --------- --------- --------- --------- --------- --------- ---------
Operating income.......... $ 1,981 11.3% $ 2,744 15.1% $ 4,712 48.8% $ 5,719 46.1%
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31,
1998--MOUNTAIN

REVENUES. Revenues increased $2.7 million, or 28.3%, from $9.7 million in
1998 to $12.4 million in 1999, primarily due to $1.6 million in revenues from
acquisitions completed in the three months ended March 31, 1999. Also favorably
impacting revenues was an increase in units under management in Whistler, B.C.
and a strong ski season in Whistler and in Park City, Utah, which offset the
snow drought in Colorado. The mountain resorts also experienced an increase in
revenue per available unit of 10.1%.

OPERATING EXPENSES. Operating expenses increased $1.7 million, or 35.0%,
from $4.9 million in 1998 to $6.7 million in 1999, primarily due to $827,000 in
operating expenses related to new acquisitions. The remaining increase is
primarily attributable to the cost of managing additional units.

TWELVE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1997--MOUNTAIN

REVENUES. Revenues increased $672,000, or 3.8%, from $17.5 million in 1997
to $18.2 million in 1998, primarily due to an increase in property rental fees,
resulting from an 8.3% increase in rental units under management.

OPERATING EXPENSES. Operating expenses were relatively flat as compared to
the prior year. However, as a percentage of revenues, operating expenses
decreased from 88.7% in 1997 to 84.9% in 1998, primarily due to a slight
reduction in direct operating costs.

BEACH RESORTS--PRO FORMA

The following table sets forth the beach resorts' (excluding Hawaii)
consolidated pro forma results of operations for the years ended December 31,
1997 and 1998 and the three months ended March 31, 1998 and 1999.

Revenues.................... $ 47,893 100.0% $ 57,386 100.0% $ 9,084 100.0% $ 10,661 100.0%
Operating expenses.......... 41,118 85.8 45,668 79.6 9,475 104.3 11,200 105.1
--------- --------- --------- --------- --------- --------- --------- ---------
Operating income (loss)..... $ 6,775 14.2% $ 11,718 20.4% $ (391) (4.3)% $ (539) (5.1)%
--------- --------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- --------- ---------

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31,
1998--BEACH

REVENUES. Revenues increased $1.6 million, or 17.4%, from $9.1 million in
1998 to $10.7 million in 1999, due to a greater number of units under management
and the acquisition of Worthy Rentals, Inc. on February 1, 1999.

OPERATING EXPENSES. Operating expenses increased $1.7 million, or 18.2%,
from $9.5 million in 1998 to $11.2 million in 1999. This increase was primarily
attributable to increased costs associated with Worthy Rentals for the period
from February 1 through March 31, 1999.

TWELVE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1997--BEACH

REVENUES. Revenues increased $9.5 million, or 19.8%, from $47.9 million in
1997 to $57.4 million in 1998, due to an 15.1% increase in lodging revenues that
resulted from an 8.5% increase in average daily rate and a 6.5% increase in
number of units under management.

OPERATING EXPENSES. Operating expenses increased $4.6 million, or 11.1%,
from $41.1 million in 1997 to $45.7 million in 1998, due primarily to the
expense impact of our five additional acquisitions completed in 1998 and
increased salaries and wages to service the increased units under management.

DESERT--PRO FORMA

The desert resort segment represents a new addition to our portfolio of
vacation opportunities in 1999 and provides additional geographic diversity. The
addition of Cove Realty Management Services, Inc. in Palm Desert, California and
Scottsdale Resort Accommodations Inc. in Scottsdale, Arizona added another
winter vacation segment. The consolidated results of operations of the two
desert properties are included for the three months ended March 31, 1999 but are
not reflected in the prior year.

THREE MONTHS ENDED
(dollars in thousands) MARCH 31, 1999
-------------------------------

Revenues.................................................................................... $ 1,259 100.0 %
Operating expenses.......................................................................... 526 41.8 %
-
--------- ---------
Operating income............................................................................ $ 733 58.2 %
-
-
--------- ---------
--------- ---------

OTHER OPERATIONS--PRO FORMA

The following table sets forth the other consolidated pro forma results of
operations for the years ended December 31, 1997 and 1998 and the three months
ended March 31, 1998 and 1999, which includes First Resort Software and
corporate.

Revenues................ $ 2,864 100.0% $ 3,305 100.0% $ 828 100.0% $ 867 100.0%
Operating expenses...... 10,496 nm 10,992 nm 2,624 nm 2,727 nm
--------- --------- --------- ---------
Operating loss.......... $ 7,632 nm $ 7,687 nm $ 1,796 nm $ 1,860 nm
--------- --------- --------- ---------
--------- --------- --------- ---------

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31,
1998--OTHER

Revenues and operating expenses were relatively flat as compared to the
prior year.

TWELVE MONTHS ENDED DECEMBER 31, 1998 COMPARED TO TWELVE MONTHS ENDED DECEMBER
31, 1997--OTHER

REVENUES. Revenues increased $441,000, or 15.4%, from $2.9 million in 1997
to $3.3 million in 1998, due primarily from increased sales of software and
software service fees.

OPERATING EXPENSES. Operating expenses were relatively flat as compared to
prior years.

LIQUIDITY AND CAPITAL RESOURCES

We are a holding company that conducts all of our operations through our
operating companies. Accordingly, the primary internal source of our liquidity
is through the cash flows realized from our subsidiaries, our $55 million credit
facility and our common stock.

We generated cash flows from operating activities of $4.7 million in the
three months ended March 31, 1999 primarily due to income from continuing
operations, an increase in reservation and escrow deposits and an increase in
accounts payable and accrued liabilities. Cash used in investing activities was
approximately $10.1 million in the three months ended March 31, 1999, due
primarily to the cash portions of our 1999 acquisitions. In the three months
ended March 31, 1999, cash provided by financing activities totaled $9.7
million, which included $10.1 million net borrowings under our credit facility.
At March 31, 1999, we had approximately $30.5 million in cash and cash
equivalents, of which $18.8 million represents cash held in escrow. The cash
held in escrow is released at varying times in accordance with state
regulations, generally based upon the guest stay, or for real estate sale
deposits when the property is sold. At March 31, 1999, we had a working capital
deficit of $4.9 million, $49.2 million of outstanding long-term debt and $7.0
million available under our credit facility. We anticipate that our cash flow
from operations will provide cash in excess of our normal working capital
levels, debt service requirements and planned capital expenditures for the
foreseeable future. Total capital expenditures for 1999 are anticipated to be
between $3.5 million and $4.0 million, of which approximately $600,000 will be
for software development, with the balance going to furniture, fixtures and
equipment.

We generated cash flows from operating activities of $13.3 million in 1998
primarily due to income from continuing operations and an increase in
reservation and escrow deposits partially offset by a decrease in accounts
payable and accrued liabilities. Cash used in our investing activities was
approximately $39.5 million in 1998, due primarily to the cash portions of the
acquisition of the 13 founding companies and the five additional acquisitions
completed in 1998. During 1998, our cash provided by financing activities
totaled $47.8 million, which included $60.0 million in net proceeds from our
initial public offering and $32.0 million in borrowings under our credit
facility, partially offset by $29.5 million in distributions to Aston's
stockholders in conjunction with our initial public offering.

At December 31, 1998, we had approximately $26.2 million in cash and cash
equivalents, of which $14.3 million represented cash held in escrow. The cash
held in escrow is released at varying times in accordance with state
regulations, generally based upon the guest stay, or for real estate sale
deposits when the property is sold. Some assets, including real estate, personal
property, receivables and cash, that were not used in the operations of the
founding companies prior to their acquisition by us were retained by the
respective stockholders of such founding companies. At December 31, 1998, we had
a working capital deficit of $2.1 million, $39.3 million of outstanding
long-term debt and $23.0 million available under our credit facility.

At December 31, 1998, the former principal stockholder of Aston was indebted
to us in the aggregate amount of $4.2 million. Of this amount, $4 million is
fully collateralized with real estate, cash and cash equivalents, including
shares of our common stock pledged to us, or by the former principal
stockholder's personal guarantee, which guarantee may not exceed $1.0 million.

On May 26, 1998, we issued an aggregate of 9,254,286 shares of common stock
in connection with the acquisition of the 13 founding companies, of which
1,708,333 shares were issued to Aston's stockholders and 7,545,953 shares were
issued to the remaining stockholders involved with the acquisition of the other
founding companies. Simultaneously, we issued 6,670,000 shares of common stock
in connection with the initial public offering. Shares issued in the initial
public offering were sold at a price to the public of $11.00 per share. The net
proceeds to us from our initial public offering, after deducting underwriting
discounts, commissions and offering expenses, were approximately $60.0 million.
Pursuant to the acquisition of the 13 founding companies, we consummated the

acquisitions of the founding companies for an aggregate of approximately $54.9
million in cash, 6,119,656 shares of common stock and the assumption of $5.7
million in debt. As of December 31, 1998, the net proceeds had been used as
follows: (1) $54.9 million to pay the cash portion of the consideration for the
acquisition of the 13 founding companies, and (2) $5.2 million to pay off
assumed indebtedness.

We entered into a $30 million credit facility on May 26, 1998 with
NationsBank, N.A. and First Tennessee Bank National Association. On September
30, 1998, our credit facility was amended to allow for our acquisition of Abbott
Resorts. On December 7, 1998, our credit facility was amended for a second time
to increase the facility to $55 million and to add two additional lenders,
Societe Generale and Union Planters Bank, N.A. On April 16, 1999, our credit
facility was amended for a third time to allow for the refinancing of existing
loans of a subsidiary. Our credit facility may be used for letters of credit not
to exceed $2.5 million, acquisitions, capital expenditures and for general
corporate purposes. Our credit facility requires us to comply with various loan
covenants, which include maintenance of certain financial ratios, restrictions
on additional indebtedness and restrictions on liens, guarantees, advances,
capital expenditures, sale of assets and dividends. Interest on outstanding
balances of our credit facility is computed at our election, on the basis of
either the Prime Rate or the Eurodollar Rate plus a spread ranging from 1.25% to
2.00%, depending on certain financial ratios. Availability fees ranging from
0.25% to 0.50% per annum, depending on certain financial ratios, are payable on
the unused portion of our credit facility.

At March 31, 1999, borrowings under our credit facility totaled $48.0
million, resulting primarily from our acquisitions. The weighted average
interest rate for the three months ended March 31, 1999, based on our
outstanding credit facility borrowings, including the applicable LIBOR spread,
was 7.3% per annum. Our credit facility has a three-year term and is secured by
substantially all of our assets and the assets of our subsidiaries, including
the stock in the founding companies and any future material subsidiaries, as
defined. ResortQuest, each of the 13 founding companies and all other current
and future material subsidiaries are required to guarantee repayment of all
amounts due under our credit facility. At March 31, 1999, we were in compliance
with applicable loan covenants.

We have commenced a placement of $50 million of senior secured notes to a
limited number of institutional investors, which is expected to close by June 1,
1999, with $40 million funded at closing and the remaining $10 million funded on
July 15, 1999. These notes will have a final maturity and average life of five
years from the date of the closing, will be secured on the same terms as our
credit facility and will rank equally with our credit facility. We plan to use
the proceeds from the issuance of these notes to pay down the outstanding
balance on our credit facility.

We intend to pursue attractive acquisition opportunities. There can be no
assurance that we will be able to identify, acquire or profitably manage
additional businesses or successfully integrate acquired businesses without
substantial costs, delays or other operational or financial problems. Increased
competition for acquisition candidates may develop, in which event there may be
fewer acquisition opportunities available to us, as well as higher acquisition
prices. Further, acquisitions involve a number of special risks, including the
failure of acquired companies to achieve anticipated results, diversion of
management's attention, failure to retain key personnel, risks associated with
unanticipated events or liabilities and amortization of acquired intangible
assets, some or all of which could have a material adverse effect on our
business, financial condition and results of operations.

YEAR 2000 COMPLIANCE

The vacation property management industry uses a complex suite of software.
The areas of greatest risk of software failure due to Year 2000 problems are:

- property management systems, including guest services and back-office
accounting;

- reservations and inventory management;

- hardware BIOS, which is the software that runs "beneath" the operating
system;

- analysis and/or management reporting tools; and

- embedded control systems, including HVAC, elevator controls, etc.

We are in the process of evaluating the various components of our operating
environment, such as personal computer workstations and related equipment,
network servers, telephone and data communication equipment, point of sale
devices, both third party and internally developed software applications, and of
our embedded technology such as micro controllers. We expect to complete the
analysis, and implement any corrective measures, by mid-1999. The Year 2000
project is not expected to delay or supercede other planned information
technology projects.

Based upon the information gathered to date, we estimate the cost of Year
2000 compliance to be approximately $600,000. A significant portion of the total
potential expense estimate relates to the cost of replacement of personal
computer hardware, servers and telecommunications equipment. Funding of Year
2000 costs is expected to be provided by cash flows from operations.

The impact upon us by Year 2000 issues is greatest in the areas of property
management systems, telecommunications and financial accounting/reporting. We
believe that the consequences of Year 2000 issues with respect to the adverse
impact upon our results of operations will not be material.

We will have contingency plans in place designed to mitigate the impact of
Year 2000 issues. The contingency plan will include items such as:

- offsite and/or manual reservations and inventory management;

- property management, such as guest services, back-office functions, and
work order administration;

- financial accounting and reporting; and

- management reporting.

All contingency plans are expected to be developed, tested and implemented by
the end of third quarter 1999.

NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS

In April 1999, the Financial Accounting Standards Board preliminarily agreed
to eliminate the use of the pooling of interests method of accounting for
business combinations. Additionally, the Financial Accounting Standards Board is
considering substantially reducing the amortization period for goodwill. We
expect that these changes in accounting treatment will apply to any acquisition
closed after January 1, 2001. The Financial Accounting Standards Board expects
to issue an Exposure Draft in the third quarter of 1999, with a final standard
issued in the fourth quarter of 2000, effective January 1, 2001. Management
believes that both of these positions, when issued, will not have a material
adverse effect on our ability to make future acquisitions.

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivatives, including
certain derivative instruments embedded in other contracts, collectively
referred to as derivatives, and for hedging activities. It requires that an
entity recognize all derivatives either as assets or liabilities in the
statement of financial position and measure those instruments at fair value.

This statement is effective for all fiscal quarters of fiscal years
beginning after September 15, 1999. The adoption of SFAS No. 133 is not
anticipated to have a material impact on our financial position or results of
operations.

SEASONALITY AND QUARTERLY FLUCTUATIONS

Our business is highly seasonal. The results of operations of each of our
operating companies are subject to quarterly fluctuations caused primarily by
the seasonal variations in the vacation rental and property management industry,
with peak seasons dependent on whether the resort is primarily a summer or
winter destination. During 1998, we derived approximately 26.6% of our
consolidated pro forma revenues and 44.1% of our consolidated pro forma
operating income in the first quarter and 28.8% of our consolidated pro forma
revenues and 40.5% of our consolidated pro forma operating income in the third
quarter. Although the seasonality of our revenues and earnings may be partially
mitigated by the geographic diversity of the existing operating companies and
any future acquisitions, there is likely to continue to be a significant
seasonal factor with respect to our revenues and earnings.

Our quarterly results of operations may also be subject to fluctuations as a
result of the timing and cost of acquisitions, the timing of real estate sales,
changes in relationships with travel providers, extreme weather conditions or
other factors affecting leisure travel and the vacation rental and property
management industry. Unexpected variations in quarterly results could also
adversely affect the price of the common stock, which in turn could adversely
affect our proposed acquisition strategy.

MARKET RISK

We are exposed to market risk on our floating interest rate debt, which is
defined as a 10% change in interest rates.

INFLATION

Inflation did not have a significant effect on the results of operations of
our operating companies for 1996, 1997 or 1998.

PERFORMANCE STATISTICS (1)

THREE
MONTHS
YEARS ENDED DECEMBER ENDED
31, MARCH 31,
----------------------- INCREASE/ ----------
1997 1998 (DECREASE) 1998
---------- ---------- ----------- ----------

HAWAII
Lodging revenues (2)........................................ $ 142,637 $ 139,814 (2.0) % $ 40,114
Occupancy................................................... 72.5% 72.1% (0.4) pts 78.7%
Average daily rate.......................................... $ 104.47 $ 104.97 0.5 % $ 113.44
Revenue per available unit.................................. $ 75.78 $ 75.66 (0.2) % $ 89.32
Total units................................................. 5,145 5,124 (0.4) % 5,090
MOUNTAIN
Lodging revenues (2)........................................ $ 32,728 $ 34,720 6.1 % $ 20,044
Occupancy................................................... 34.8% 35.5% 0.7 pts 62.9%
Average daily rate.......................................... $ 153.81 $ 152.65 (0.8) % $ 196.92
Revenue per available unit.................................. $ 53.60 $ 54.24 1.2 % $ 123.77
Total units................................................. 1,895 2,052 8.3 % 1,991
BEACH
Lodging revenues (2)........................................ $ 91,102 $ 104,833 15.1 % $ 15,318
Occupancy................................................... 54.6% 54.6% 0.0 pts 62.0%
Average daily rate.......................................... $ 121.54 $ 131.90 8.5 % $ 73.76
Revenue per available unit.................................. $ 66.33 $ 72.01 8.6 % $ 45.74
Total units................................................. 4,702 5,009 6.5 % 4,845
TOTAL
Lodging revenues (2)........................................ $ 266,468 $ 279,367 4.8 % $ 75,477
Occupancy................................................... 60.2% 59.7% (0.5) pts 70.1%
Average daily rate.......................................... $ 114.48 $ 118.67 3.7 % $ 113.83
Revenue per available unit.................................. $ 68.92 $ 70.83 2.8 % $ 79.79
Total units................................................. 11,742 12,185 3.8 % 11,926

INCREASE/
1999 (DECREASE)
---------- -----------

HAWAII
Lodging revenues (2)........................................ $ 38,749 (3.4) %
Occupancy................................................... 83.7% 5.0 pts
Average daily rate.......................................... $ 106.97 (5.7) %
Revenue per available unit.................................. $ 89.55 0.3 %
Total units................................................. 4,966 (2.4) %
MOUNTAIN
Lodging revenues (2)........................................ $ 22,292 11.2 %
Occupancy................................................... 70.8% 7.9 pts
Average daily rate.......................................... $ 192.47 (2.3) %
Revenue per available unit.................................. $ 136.29 10.1 %
Total units................................................. 1,992 0.1 %
BEACH
Lodging revenues (2)........................................ $ 16,477 7.6 %
Occupancy................................................... 57.5% (4.5) pts
Average daily rate.......................................... $ 76.55 3.8 %
Revenue per available unit.................................. $ 43.98 (3.8) %
Total units................................................. 5,090 5.1 %
TOTAL
Lodging revenues (2)........................................ $ 77,518 2.7 %
Occupancy................................................... 71.4% 1.3 pts
Average daily rate.......................................... $ 111.80 (1.8) %
Revenue per available unit.................................. $ 79.84 0.1 %
Total units................................................. 12,048 1.0 %

- ------------------------

(1) These statistics have been restated to include the effects of the Abbott
Resorts acquisition and our three pooling of interests acquisitions. These
statistics exclude Houston & O'Leary, The Maury People, Columbine,
Ridgepine, Ryan's Golden Eagle, Cove Management Services, Worthy Rentals,
and Scottsdale Resorts Accommodations units of approximately 3,400. Also
excluded from these statistics are owner use nights and renovation nights
which were approximately 12.1%, 12.2%, 11.9% and 10.6% of gross available
nights in the three months ended March 31, 1999, the three months ended
March 31, 1998, the year ended December 31, 1998, and the year ended
December 31, 1997, respectively.

(2) Lodging revenues are in thousands and represent the total property rental
fees charged to property owners as a percentage of the vacationer's total
rental rate. Our revenue represents from 3% to over 40% of the lodging
revenues based on the services provided by us.

BUSINESS

GENERAL

We commenced operations on May 26, 1998, concurrent with our initial public
offering and the acquisition of 12 leading vacation rental and property
management companies and the industry's leading management software company.
Since that time, we have completed 12 additional vacation rental and property
management acquisitions, five in 1998 and seven in 1999. These acquisitions
contain a total of more than 4,500 rental units, which represents a 44% increase
in our initial portfolio of vacation rental condominiums and homes. We currently
manage approximately 15,000 condominiums and homes in 30 premier destination
resorts throughout the United States and in Canada.

Most vacationers seeking to rent a condominium or home at a popular
destination resort typically have relied on local vacation rental and property
management firms to inquire about availability and make reservations.
Vacationers made rental choices with limited information and, as a result, faced
great uncertainty concerning the quality of their rental. To address this need,
we established the ResortQuest brand to provide vacationers with access to
quality condominium and home rentals intended to consistently meet their
expectations. The ResortQuest brand is designed to ensure that a vacation rental
meets customer expectations by providing a standardized, basic level of products
and services throughout our extensive national network of quality condominiums
and homes in premier destination resorts and by consistently categorizing
accommodations based on quality, appearance and features.

We also offer vacationers a single-source from which they can easily access
information about and make reservations for our condominium and home rentals. In
January 1999, we launched RESORTQUEST.COM, one of the most comprehensive web
sites in the vacation industry based on its breadth of locations, property
information and functionality. RESORTQUEST.COM enables vacationers to search
through all of our vacation home and condominium rentals, view extensive
information about each rental property, including photographs and floor plans,
check availability and rental rates and make real-time reservations directly
on-line. In addition, for customers interested in buying or selling a vacation
home, RESORTQUEST.COM provides multiple location real estate listings for homes
and condominiums located in 15 of our resort locations. Vacationers also have
the option of obtaining information from and making reservations through our
24-hour toll-free reservations line, which is staffed by agents who are familiar
with the specific condominiums and homes.

- - the market;

- - the type of services provided to
the property owner;

- - the type of rental unit managed;
and

- - which party bears responsibility
for operating expenses.

On a pro forma basis for the three months ended March 31, 1999 and the year
ended December 31, 1998, we generated total revenues of approximately $31.6
million and $100.8 million, respectively, which includes $18.4 million and $52.9
million, respectively, of revenues from property management fees, and net income
of $3.3 million and $5.4 million, respectively. We believe that a national brand
and superior management services, which are designed to enhance rental income
for property owners, will provide us with a competitive advantage in attracting
additional high quality condominiums and homes in our markets.

INDUSTRY OVERVIEW

The United States is the largest market in the world for the travel and
tourism business, representing an estimated 20% of total worldwide travel and
tourism expenditures. From 1987 to 1997, the U.S. market has consistently grown
at a compounded annual rate of 6.1%. In 1997, expenditures for tourism in the
United States reached approximately $482 billion, or approximately 6% of 1997's
gross domestic product, making the U.S. travel and tourism industry one of the
largest sectors in the U.S. economy. Expenditures for tourism are expected to
continue to increase and reach $594 billion by 2001. The travel and tourism
industry can be segmented into a number of categories depending on the purpose
of travel.

The two primary categories are business travel, including both personal and
work related, and pleasure travel. According to the Department of
Transportation's 1995 American Travel Survey, pleasure travel represented 63% of
total trips taken by Americans. We focus on a subsegment of the pleasure travel
area, specifically the leisure segment. The leisure segment represents all trips
taken for vacation purposes other than those trips to visit family or friends.

Within the leisure segment, the total market for vacation condominium, home
and apartment rentals, which are marketed predominantly by vacation rental and
property management companies, was over $10 billion in 1996, representing over
20 million vacation property rentals. Rental revenues grew 8.7% from 1995 to
1996, and we believe that this growth has been, and will continue to be, driven
by two primary factors: the overall growth in the leisure travel and tourism
industry, which reflected a 16.1% increase in revenues from 1995 to 1997, and
the increasing number of vacationers seeking to rent vacation condominiums and
homes. We believe this data reflects the most recently available industry
information.

Destination resort vacationers primarily have three alternatives for
overnight accommodations: commercial lodging establishments, timeshare resorts
and privately-owned vacation condominiums and homes. For many vacationers,
particularly those with families, a lengthy stay at a quality commercial lodging
establishment can be expensive. Vacation condominium and home rentals generally
offer families greater space and convenience than a resort hotel room, including
separate living, sleeping and eating quarters. As a result, families generally
have more privacy and greater flexibility in a vacation condominium or home.
Furthermore, with full kitchens available in most properties, vacationers can
also save on dining costs in a vacation condominium or home rental. In addition,
vacation condominium and home rentals frequently include access to private
yards, swimming pools, tennis courts and other recreational facilities, and
generally offer a greater variety of locations, accommodations and price ranges
within a market to meet a vacationer's desires.

Vacation property rentals are also a less expensive and more flexible
alternative to timeshare interests. Unlike vacation property rentals, timeshare
interests require the purchase of an ownership interest in a vacation residence
and continuing annual maintenance payments. A timeshare owner has the right to
use the same vacation residence for the same length of time each year. Subject
to availability and the payment of a membership fee and a variable exchange fee
to join a timeshare exchange program, a timeshare owner may request that his
timeshare interval be exchanged for a timeshare interval at another
participating resort. Owners are generally limited to timeshare intervals at
participating resorts and to those units which have been assigned an equal or
lower rating by the exchange program based on the location, size and quality of
the unit, the quality of the resort and the time of year requested.

Most vacation condominiums and homes are second homes owned by individuals
who reside in different locations and are unable to manage the rental process
easily. Vacation rental and property management companies facilitate the rental
process by handling all interaction with vacationers, including:

- accepting reservations;

- collecting rental payments and security deposits;

- operating check-in and check-out locations; and

- arranging for inspections, security and maintenance.

The publishing of catalogs, print advertising and other marketing activities of
a successful vacation rental and property management company also can enhance
the vacation condominium or home's occupancy rate and increase rental income to
the property owner.

The vacation rental and property management industry is highly fragmented,
with an estimated 3,000 vacation rental and property management companies in the
United States. Most vacation rental condominiums and homes are managed by and
booked through local vacation rental and property management firms, whose
principal means of attracting property owners and vacationers are by referral,
word of mouth, limited local advertising and direct mailings. Before
ResortQuest, there was no central reservations service for vacationers or travel
agents to obtain information regarding most condominium or home rental
opportunities at popular destination resorts nationwide or for booking such
rentals once a destination was selected. We believe the vacation rental and
property management industry is highly inefficient and presents a significant
market opportunity for a well-capitalized company offering a national branded
network of high quality vacation condominiums and homes with superior levels of
customer service.

BUSINESS STRATEGY

Our objective is to enhance our position as a leading provider of premier
destination resort condominium and home rentals by pursuing the following
elements of our business strategy:

CONTINUE TO BUILD THE RESORTQUEST BRAND. Prior to ResortQuest, there had
been no national brand for vacation condominium and home rentals, no industry
standards for quality and a general lack of access to reliable information
regarding rental opportunities for vacationers. We have increased the
information available to vacationers, established the only national brand in the
fragmented vacation rental industry and continue to provide vacationers with
high quality condominium and home rentals. The ResortQuest brand is designed to
ensure that a vacation rental meets customer expectations by providing a basic,
standardized level of products and services and by consistently categorizing
accommodations based on quality, appearance and amenities.

CAPITALIZE ON TECHNOLOGY. We believe that investment in technology,
especially that related to the Internet, will create a significant competitive
advantage and be critical in building our national brand, increasing revenue,
reducing costs and managing vacationer, owner, employee and investor
expectations. Our commitment to technology is evidenced by (1) RESORTQUEST.COM,
our comprehensive web site which enables consumers to search through our
vacation rentals, to check availability and to make reservations on-line, and
(2) First Resort Software, which is a leading provider of integrated software
for the vacation rental and property management industry. We plan to use First
Resort Software to link our existing and future acquired companies' databases in
order to enhance our cross-selling and direct marketing efforts. We also intend
to develop proprietary data mining tools in order to enhance our cross-selling
and direct marketing efforts.

OFFER VACATIONERS SUPERIOR CUSTOMER SERVICE. We believe that maintaining
superior levels of customer service is critical to developing a reputation for
high quality condominiums and homes and for attracting new customers.
Vacationers typically rent vacation condominiums and homes for greater space and
flexibility, but these customers also frequently desire many of the amenities
and services of hotel accommodations. As a result, we require each operating
company to deliver a standardized, basic level of amenities and services
designed to enhance the vacationer's overall experience. We have established a
detailed listing of basic standards relating to conveniently located check-in
and check-out locations, efficient check-in and check-out procedures, extended
front desk hours, cleanliness of units and access to emergency contact and
maintenance personnel. We also strive to offer maximum flexibility to meet the
varied needs of our vacationers and in most markets can arrange for services
such as golf tee times, bicycle rentals, ski lift tickets, grocery delivery or
restaurant reservations. By offering the convenience and accommodations of a
condominium or home while providing many of the amenities and services of a
hotel, we believe we will continue to strengthen the loyalty of our existing
customers and attract new vacationers into the vacation condominium and home
rental market.

ENHANCE VALUE FOR PROPERTY OWNERS. We provide property owners with superior
management services by combining local management expertise with the marketing
power and resources of a leading brand, which work to increase rental income
through increased occupancy and rental rates. Since substantially all of the
condominiums and homes managed by us are second homes with absentee owners, we
offer a range of high quality vacation rental and property management services
designed to meet the broad real estate needs of these owners. In most markets,
we will assume broad responsibility for the condominium or home, from marketing
and handling all aspects involved in renting the individual condominium or home
to managing the common properties and homeowners' association. In addition, we
provide owners with concise, timely and accurate monthly statements and payments
for the rental and management of their condominiums and homes. We believe that
our reputation for high quality, comprehensive management services will be a key
competitive advantage in increasing the number of condominiums and homes under
our management within our existing markets.

CAPITALIZE ON THE EXPERIENCE OF SENIOR MANAGEMENT. Our senior management
team has a proven track record of building and operating successful brands, and
the breadth of experience necessary to execute our business plan effectively.
Our senior management team averages 23 years of lodging-related experience.

- DAVID C. SULLIVAN, Chairman and Chief Executive Officer, is the former
Chief Operating Officer of Promus Hotel Corporation, where he was
responsible for developing, expanding and managing the Hampton Inn,
Homewood Suites and Embassy Suites hotel brands, all leaders in their
respective market segments.

- DAVID L. LEVINE, President and Chief Operating Officer, is the former
President and Chief Operating Officer of Equity Inns, Inc., a leading real
estate investment trust specializing in hotel acquisitions. Concurrently
he served as President and Chief Operating Officer of Trust Management,
Inc. which operated Equity Inns properties.

- JEFFERY M. JARVIS, Senior Vice President and Chief Financial Officer, has
over 20 years of related finance and accounting experience. Mr. Jarvis is
the former Vice President, Controller of Promus Hotel Corporation and
spent over 12 years with Arthur Andersen LLP.

- W. MICHAEL MURPHY, Senior Vice President and Chief Development Officer,
leads our mergers and acquisitions effort. Mr. Murphy has been involved
with real estate acquisition businesses and the hospitality industry for
more than 25 years.

- JOHN K. LINES, Senior Vice President, General Counsel and Secretary, is
the former General Counsel and Secretary of Insignia Financial Group,
Inc., a publicly-traded commercial property management and brokerage
company.

- JULES S. SOWDER, Senior Vice President and Chief Marketing Officer, leads
our marketing strategy. Ms. Sowder is the former Vice President, Marketing
for Promus Hotel Corporation, where she had overall responsibility for
marketing the Hampton Inn, Homewood Suites and Embassy Suites hotel
brands.

- FREDERICK L. FARMER, Senior Vice President and Chief Information Officer,
has more than 20 years of experience working for Fortune 500 companies.
Mr. Farmer most recently spent 12 years with Marriott International as
Senior Vice President, Internet and Desktop Services and was responsible
for positioning Marriott for Internet commerce.

LEVERAGE LOCAL RELATIONSHIPS AND EXPERTISE. Our local management teams have
extensive experience in their respective resort areas, and many of the
individuals are very active in their local communities. The management teams
have a valuable understanding of their respective markets and businesses and
have developed strong local relationships. These relationships are critical in
attracting additional condominiums and homes for rental and enable us to provide
additional concierge-type services to our vacationers. Accordingly, our
decentralized management strategy is designed to allow local managers to utilize
their knowledge and expertise about the condominiums and homes available for
rent, the offerings of local competitors and the desires of vacationers in their
areas to provide superior customer service to both property owners and
vacationers.

GROWTH STRATEGY

We believe we can enhance our position as a leading provider of vacation
condominium and home rentals in premier destination resorts by growing both
internally and through an active acquisition program.

INTERNAL GROWTH

The primary elements of our internal growth strategy include:

FULLY IMPLEMENT OUR NATIONAL MARKETING STRATEGY. We have implemented a
multi-faceted national marketing program designed to increase vacationer
awareness of the ResortQuest brand, while promoting the unique characteristics
of our individual resorts. This comprehensive marketing program targets
consumers and the travel trade through high-profile advertising, direct mail,
e-mail marketing, public relations, promotional programs and RESORTQUEST.COM.
This program is designed to attract new customers as well as to cross-sell
additional services and locations to existing customers, thereby increasing
customer loyalty by offering customers similar properties and services in our
other resorts that meet the vacationer's expectations based, in part, on their
previous experiences with us. We believe the integrated marketing efforts of our
operating companies will increase customer awareness of the ResortQuest brand,
lead to an increased demand for our rentals and result in higher occupancy and
rental rates for our condominium and home owners. We also believe that the
anticipated increase in rental income for owners will ultimately be a
competitive advantage in attracting new property owners.

INCREASE MARKET SHARE WITHIN EXISTING MARKETS. A key element of our growth
strategy is to increase our selection of condominiums and homes in order to
expand our market share and strengthen the local brands of each of our operating
companies. We intend to attract new property owners by achieving high occupancy
rates through effective national marketing, cross-selling and offering
additional incentives to property owners, such as QuestClub, our new travel
benefits program for owners of properties we manage. In addition, in order to
capture a higher portion of the rental business from new condominiums and homes
being built in our markets, we will focus on building and strengthening our
relationships with both local and national resort developers as well as real
estate brokerage companies.

EXPAND PROFIT MARGINS. Through the implementation of the best management
practices of our operating companies, we believe there are numerous
opportunities to improve our overall profit margins. We continue to improve the
efficiency of certain basic services such as reservations, housekeeping and
laundry. We also believe that larger inventories of condominiums and homes in
our markets will provide certain economies of scale in advertising, check-in
locations, management, housekeeping and other services. We have already begun to
achieve savings through company-wide contracts for long distance telephone
service, credit card fees and insurance. We believe that enhanced efficiency and
economies of scale will reduce overall operating costs and allow us to achieve
increased margins by spreading operating and corporate overhead costs over a
larger revenue base. In addition, several of our operating companies have
developed unique additional revenue opportunities, such as assisting property
owners in refurbishing their properties, offering trip cancellation insurance
and charging fees for certain concierge-type services, several of which can be
replicated by our other operating companies.

USE ADDITIONAL MARKETING CHANNELS. Historically, most vacationers have
located vacation condominiums and homes through referrals, word-of-mouth,
limited local advertising and direct mailings. We believe there are significant
opportunities to expand the use of additional marketing channels. We plan to
capitalize on our extensive market presence by increasing the use of other
marketing channels such as the Internet, travel agents and national print media,
which are difficult for local vacation rental and property management companies
to use in a cost-effective manner. Given our size and presence in premier
destination resorts, we believe we are an attractive partner to travel agents,
tour package operators and other travel providers. These relationships should
continue to be a significant source of new customers and, in particular, will be
a valuable marketing channel for off-peak seasons.

PURSUE STRATEGIC ACQUISITIONS

In addition to pursuing our internal growth strategy, we are building our
national market presence through an active acquisition program. While we seek to
acquire leading companies in each new market we enter, we also plan to pursue
tuck-in acquisitions through which we can expand our selection of rental
inventory in our existing markets. We believe that we provide acquisition
candidates with a number of significant benefits, including:

- affiliation with a national brand;

- the ability to cross-sell to customers of other vacation rental and
property management companies within the ResortQuest network;

- the ability to increase liquidity as a result of our financial strength as
a public company and access to additional sources of capital; and

- the ability to increase profitability as a result of our centralization of
certain administrative functions and other economies of scale.

Many acquisition candidates use the software developed by First Resort
Software. We believe their use of this software system will enhance our ability
to integrate quickly such companies upon acquisition.

Since the acquisition of the 13 founding companies in May 1998, we have
successfully completed the following 12 additional vacation rental and property
management acquisitions for an aggregate purchase price of $69.2 million:

NUMBER EXISTING
OF OR
RESORT DATE ACQUIRED LOCATION UNITS(1) NEW MARKET
----------------------------------------------------------- ------------- ------------------- -------- ----------

Goldpoint.................................................. July 1998 Breckenridge, CO 27 Existing
Plantation Resort Management............................... Aug. 1998 Gulf Shores, AL 383 New
Whistler Exclusive......................................... Sept. 1998 Whistler, BC 46 Existing
Abbott Resorts............................................. Sept. 1998 Destin, FL 2,379 New
Columbine Management....................................... Dec. 1998 Dillon, CO 140 New
Ridgepine.................................................. Jan. 1999 Sunriver, OR 142 New
Ryan's Golden Eagle........................................ Jan. 1999 Big Sky, MT 210 New
Cove Management............................................ Jan. 1999 Palm Desert, CA 311 New
Worthy Rentals............................................. Feb. 1999 Hilton Head, SC 360 New
Scottsdale Resort Accommodations........................... Feb. 1999 Scottsdale, AZ 169 New
High Country Resorts....................................... Mar. 1999 Crested Butte, CO 132 New
Mountain High Management................................... Mar. 1999 Whistler, BC 275 Existing
--------
Total.................................................. 4,574
--------
--------

- ------------------------

(1) As of March 31, 1999.

We continue to seek companies with strong reputations and a commitment to high
quality condominiums and homes and customer service.

MARKETS
We currently manage condominiums and homes in 30 premier Hawaiian, mountain,
beach and desert resorts throughout the United States and in Canada. The table
below sets forth the resort locations at which we manage vacation condominium
and home properties and the aggregate number of properties managed in each of
the following states at March 31, 1999.

HAWAIIAN RESORTS
Hawaii: Hawaii, Kauai, Maui and Oahu.............................. 4,966

MOUNTAIN RESORTS
Colorado: Aspen, Breckenridge, Crested Butte, Dillon and
Telluride....................................................... 1,187
British Columbia: Whistler........................................ 728
Utah: The Canyons, Deer Valley and Park City...................... 347
Montana: Big Sky.................................................. 210
Oregon: Sunriver.................................................. 142

BEACH RESORTS
Florida: Captiva Island, Destin, Fort Myers, Okaloosa Island,
Sanibel Island and South Walton Beach........................... 3,210
Massachusetts: Nantucket.......................................... 1,200
Delaware: Bethany Beach........................................... 595
North Carolina: The Outer Banks................................... 511
Georgia: St. Simons Island........................................ 391
Alabama: Gulf Shores.............................................. 383
South Carolina: Hilton Head Island................................ 360

DESERT RESORTS
California: Palm Desert and Palm Springs.......................... 311
Arizona: Scottsdale/Phoenix....................................... 169
---------

TOTAL........................................................... 14,710
---------
---------

SERVICES OFFERED

SERVICES OFFERED TO VACATIONERS. We provide services to vacationers during
all stages of the rental process from the selection and reservation of a
condominium or home to the vacationers' arrival and throughout their stay. To
make the selection and reservation process as simple and convenient as possible,
in January 1999 we launched RESORTQUEST.COM, an on-line, single-source,
interactive web site that provides consumers with instant access to our
inventory of approximately 15,000 vacation rental properties. Vacationers can
check availability and rental rates, view extensive information about each
property, including photographs and floor plans, obtain information about
special offers and promotions and make real-time reservations directly on-line.
Vacationers can customize their searches of our rental inventory based upon
either type of resort destination, including beach, mountain, island and desert,
or type of activity, including golf, skiing, tennis and fishing. Since the
inception of RESORTQUEST.COM, monthly site hits have increased from 500,000 in
January 1999 to over 8 million in March 1999, generating approximately $2
million of on-line bookings during the first quarter of 1999.

We are constantly improving and updating our web site. By June, vacationers
will be able to take a virtual tour of a representative sample of our
condominium and home rental units on RESORTQUEST.COM. The virtual tour will
allow vacationers to move from room to room in a particular unit and view the
outside surroundings. In addition, we are in the process of enhancing
RESORTQUEST.COM's search engine to enable vacationers to search for rental units
in several different resort locations simultaneously.

In addition to on-line access to our rental properties, we also provide
vacationers with catalogs containing color photographs and descriptions of
available condominiums or homes in most of our resort locations. Also,
vacationers may choose to make reservations through our 24-hour toll-free
reservations line staffed by agents who are familiar with the specific
condominiums and homes at all of our resort locations.

Because of the variety of our resort locations and the diversity of rental
prices throughout our rental pool, we are able to target a broad range of
vacationers, including families, couples and individuals. For vacationers, we
offer the convenience and accommodations of a condominium or home, while
providing many of the amenities and services of a hotel. Vacation condominium
and home rentals generally offer greater space and convenience than resort hotel
rooms, including separate living, sleeping and eating quarters. As a result,
vacationers generally have more privacy and greater flexibility in a vacation
condominium or home.

Upon the vacationer's arrival, we offer conveniently located check-in and
check-out locations, many of which are located on-site at the front desk of our
condominium properties. Off-site check-in locations are typically centrally
located and easily accessible in their respective resort communities. In most
destination resort communities, we maintain more than one centrally located
check-in facility. During their stay, vacationers at most locations are offered
frequent cleaning and housekeeping services and access to emergency contact and
maintenance personnel. In most locations, we offer more specialized concierge
services such as bicycle and ski equipment rentals, ski lift tickets sales,
shuttles to ski areas, golf tee times and restaurant reservations. We typically
receive a fee for providing these services.

To help ensure that vacationers' expectations are met, we implemented a
comprehensive quality standard program in November 1998. As part of this
program, each of our operating companies is required to deliver a standardized,
basic level of products and services that affect the overall experience of
vacationers. We have established a detailed listing of standards relating to:

- - the reservation, check-in and
check-out processes;

- - the provisions included in each
rental unit;

- - the services and amenities
provided during the vacationer's
stay;

- - the maintenance of the grounds
and facilities surrounding the
rental unit; and

- - the response of employees to
problems raised by vacationers.

To promote consistency across all of our locations, we have evaluated, based
on our proprietary rating criteria, substantially all of our vacation
condominiums and homes and segmented them into the following five proprietary
accommodation categories:

- - Quest Home: an exclusive group of extraordinary accommodations which we
believe are so luxurious and unique that they are in a class of
their own;

- - Platinum: exceptional accommodations marked by distinctive design that offer
superior-quality furnishings, luxury features, designer
appointments and top-of-the-line kitchens, baths and amenities;

- - Gold: upscale, well-appointed accommodations with a designer touch that
feature excellent furnishings, special features and top-quality
kitchens, baths and amenities;

- - Silver: inviting, pleasing accommodations that are tastefully decorated
and feature quality furnishings and contemporary kitchens and
baths; and

- - Bronze: comfortable, pleasant accommodations that provide many of the
comforts and conveniences of home.

We have developed specific, detailed criteria for each of our accommodation
categories, based on quality, appearance and features of the rental properties
including property furnishings, soft goods, flooring, kitchen/appliances,
televisions and stereos, bathrooms, decor and other features such as swimming
pools and exercise facilities. Similarly, we have standardized the use of
property location descriptions. We will perform annual on-site reviews of each
of our rental properties to update our accommodation category ratings.

SERVICES OFFERED TO CONDOMINIUM AND HOME OWNERS. We provide condominium and
home owners a comprehensive set of high-quality vacation rental and property
management services by combining local management expertise and attention with
the marketing resources of a national brand. In most markets, we will assume
complete responsibility for rental management of the condominium or home,
including marketing, renting and maintaining the specific property as well as
managing the common areas and homeowners' associations. We currently engage in
extensive marketing activities, including our interactive web site,
RESORTQUEST.COM, print advertising in high-profile national publications and
e-mail marketing, as well as direct catalog mailings to prior and prospective
vacationers and direct solicitations of travel agents and wholesalers. We also
handle all interaction with vacationers, including accepting reservations,
collecting rental payments and security deposits, operating check-in and
check-out locations and offering linen, housekeeping and other services.
Property owners are paid rental income each month for rental activity in the
preceding month and are given a concise, timely and accurate monthly statement
which details the rental activity and management of their condominiums and
homes.

Property maintenance services are provided by both our employees and third
party independent contractors. Services are either regularly scheduled, or
provided on an "as needed" basis, depending on the service and resort location.
In most markets, we perform periodic inspections and make recommendations to
property owners for maintenance, refurbishments and renovations necessary to
maintain the quality of their condominiums and homes. In several of our
destination resort markets, we provide professional interior design and
refurbishment services to property owners to assist with the upkeep and
appearance of their condominiums and homes. We include routine maintenance
services, such as replacing light bulbs or broken china, as part of an all
inclusive commission structure in certain locations. In other markets, we
collect fees from property owners for maintenance services through service and
maintenance agreements and fees for service arrangements.

For owners desiring to sell their vacation condominium or home, we offer
traditional real estate brokerage services in 15 resort locations, including
listing and showing the property. Also, RESORTQUEST.COM provides multiple
location real estate listings for these resort locations. We believe that
providing real estate brokerage services gives us a competitive advantage in
identifying and securing properties for our rental management services and
allows us to meet all of the needs of vacation property owners.

Owners of condominiums and homes we manage may participate in QuestClub, an
exclusive travel benefits program initiated in December 1998. QuestClub members
receive a 70% savings on vacation condominium and home rentals for stays of up
to 28 days each year at other QuestClub member properties. The availability of
QuestClub privileges is limited during extremely popular times to preserve the
revenue potential for each participating homeowner. The QuestClub annual
membership fee is $129.

MARKETING

The marketing efforts of traditional vacation rental and property management
companies are primarily through word of mouth, including both vacationers and
property owners, print advertising primarily in local newspapers and regional
magazines and direct mail solicitations and catalogs sent to prior customers.
Potential customers typically call as a result of a referral or in response to
an advertisement or other promotion and are assisted by reservation agents in
selecting the appropriate vacation property and making the reservation.

In contrast, our marketing strategy is aimed at building awareness of the
ResortQuest brand name and image, cross-selling our destinations and promoting
RESORTQUEST.COM. Since our initial public offering, we have developed a
comprehensive, national marketing campaign targeting consumers and the travel
trade through direct mail, e-mail marketing, public relations, promotional
programs and high-profile print advertising in publications such as USA TODAY,
CONDE NAST TRAVELER, TRAVEL & LEISURE, SKI, GOLF MAGAZINE, COASTAL LIVING,
MIDWEST LIVING, SOUTHERN LIVING and SUNSET. We also market to travel agents
primarily through advertisements in trade publications and attendance at
national and regional travel industry trade shows. Tour package operators
typically combine transportation to a destination resort with our vacation
condominiums and homes and a car rental. Tour packages are distributed almost
exclusively through travel agents.

We believe that our most important marketing resource is our web site,
RESORTQUEST.COM, which was launched in January 1999. For the first time,
consumers can use a single source to visit resort destinations throughout the
United States and in Canada, view photographs and floor plans and make real-time
reservations directly on-line. We believe that a national marketing campaign
should increase the effectiveness of the existing operating companies and
companies to be acquired in the future, and expand the universe of potential
customers for each resort location in which we operate.

We intend to capitalize on our extensive market presence and further
increase our use of the Internet, travel agents and print media. We believe that
our extensive selection of vacation condominiums and homes make us an attractive
partner to travel agents, tour package operators and other travel providers.
These relationships should continue to be a significant source of new customers
and, in particular, will be a valuable marketing channel for off-peak seasons.

FIRST RESORT SOFTWARE

First Resort Software is a leading provider of integrated management,
reservations and accounting software for the vacation rental and property
management industry. Sixteen of our operating companies and over 700 other
vacation rental and property management companies use the software programs
developed by First Resort Software. These programs were developed to overcome
problems encountered by rental property managers in attempting to use software
programs developed for the hotel industry. The basic software developed by First
Resort Software allows vacation rental and property management companies to
automate and computerize their reservations, billings, rental management and
accounting tasks. Vacation rental and property management companies can use the
software developed by First Resort Software to generate current rates on
individual condominiums and homes and access specific descriptions of those
condominiums and homes for potential customers. The software also allows
companies to generate monthly revenue reports for property owners and to
coordinate maintenance and housekeeping schedules. First Resort Software also
offers additional modules and interfaces, including a work order generator,
activities management system, credit card interface and on-line booking
interface through the Internet. First Resort Software is developing a JAVA
Client/Server based graphical reservations application that will allow users of
its software to completely integrate their reservations systems with the
Internet, as well as a JAVA Client/Server based version of all of its existing
software applications.

We intend to rely on the products and management expertise of First Resort
Software to enhance our technology strategy. We believe that investment in
technology is critical in building a national, branded vacation rental and
property management company for premier destination resorts and will provide us
with a significant competitive advantage in the future. The software developed
by First Resort Software will allow us to quickly link our existing operating
companies' and future acquired companies' databases. We also intend to develop
proprietary data mining tools in order to enhance our cross-selling and direct
marketing efforts.

COMPETITION

- market share and visibility;

- quality, cost and breadth of services and properties provided; and

- long-term customer relationships.

The principal competitive factors in attracting vacation property owners are the
ability to generate higher rental income and to provide comprehensive management
services at competitive prices. We compete for vacationers and property owners
primarily with approximately 3,000 owner-operated companies that typically
operate in a limited geographic area. Some of our competitors are affiliated
with the owners or operators of resorts in which such competitors provide their
services. Certain of these smaller competitors may have lower overhead cost
structures and may be able to provide their services at lower rates.

We also compete for vacationers with large hotel and resort companies. Many
of these competitors have greater financial resources than we have, enabling
them to finance acquisition and development opportunities, to pay higher prices
for the same opportunities or to develop and support their own operations. In
addition, many of these companies can offer vacationers services not provided by
vacation rental and property management companies, and they may have greater
name recognition among vacationers. These companies might be willing to
sacrifice profitability to capture a greater portion of the market for
vacationers or pay higher prices than we would for the same acquisition
opportunities. Consequently, we may encounter significant competition in our
efforts to achieve our internal and acquisition growth objectives as well as our
operating strategies focused on increasing the profitability of our existing
operating companies and subsequent acquisitions.

EMPLOYEES

We had approximately 2,600 year-round, full-time employees and approximately
400 year-round, part-time employees as of March 31, 1999. We also rely
significantly on approximately 1,300 seasonal employees to meet peak season
demands. As of March 31, 1999 we had approximately 3,900 total employees. In the
course of performing service and maintenance work, we also utilize the services
of independent contractors. We believe our relationships with our employees and
independent contractors are good.

LEGAL PROCEEDINGS

We are involved in various legal actions arising in the ordinary course of
business. We believe that none of these actions will have a material adverse
effect on our business, financial condition or results of operations.

FACILITIES

As of March 31, 1999, our offices and our maintenance, laundry and storage
facilities were located in 119 properties in 14 states and 28 cities in the
United States and Canada. We consider all of our owned and leased properties to
be suitable and adequate for the conduct of our business.

GOVERNMENTAL REGULATION

Our operations are subject to various federal, state and local laws and
regulations, including licensing requirements applicable to real estate
operations and laws and regulations relating to consumer protection. On a
federal level, the Federal Trade Commission has taken the most active regulatory
role through the Federal Trade Commission Act, which prohibits unfair or
deceptive acts or competition in interstate commerce. Other federal legislation
to which we are or may be subject includes the Real Estate Settlement Procedures
Act, the Fair Debt Collection Practices Act, the Interstate Land Sales Full
Disclosure Act, Telephone Consumer Protection Act, Telemarketing and Consumer
Fraud and Abuse Prevention Act, Fair Housing Act, and the Civil Rights Acts of
1964 and 1968. Many state and local regulations governing real estate services
require permits and licenses to be held by individuals. In some cases, a
required permit or license held by a single individual may be sufficient to
authorize specified activities for all our employees who work in the state or
county that issued the permit or license. In addition, certain international
laws and regulations may also be applicable to our international operations. We
believe that we are in material compliance with all federal, state, local and
foreign laws and regulations to which we are currently subject.

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information concerning our directors,
executive officers and certain key employees.

NAME AGE POSITION
- -------------------------------------- --- --------------------------------------------------------------------

David C. Sullivan..................... 59 Chairman; Chief Executive Officer; Director
David L. Levine....................... 51 President; Chief Operating Officer; Director
Jeffery M. Jarvis..................... 43 Senior Vice President; Chief Financial Officer
W. Michael Murphy..................... 53 Senior Vice President; Chief Development Officer
Jules S. Sowder....................... 42 Senior Vice President; Chief Marketing Officer
John K. Lines......................... 39 Senior Vice President; General Counsel; Secretary
Frederick L. Farmer................... 49 Senior Vice President; Chief Information Officer
William W. Abbott, Jr................. 53 Director
Elan J. Blutinger..................... 43 Director
D. Fraser Bullock..................... 44 Director
Joshua M. Freeman..................... 34 Director
Heidi O'Leary Houston................. 46 President-Houston and O'Leary; Director
Michael D. Rose....................... 57 Director
Andre S. Tatibouet.................... 58 President-Aston; Director
Joseph V. Vittoria.................... 64 Director
Theodore L. Weise..................... 55 Director

DAVID C. SULLIVAN became our Chairman and Chief Executive Officer and one of
our directors in May 1998. From April 1995 to December 1997, Mr. Sullivan was
the Executive Vice President and Chief Operating Officer, and a director, of
Promus Hotel Corporation, a publicly traded hotel franchiser, manager and owner
of hotels whose brands include Hampton Inn, Homewood Suites and Embassy Suites.
From 1993 to 1995, Mr. Sullivan was the Executive Vice President and Chief
Operating Officer of the Hotel Division of The Promus Companies Incorporated. He
was the Senior Vice President of Development and Operations of the Hampton
Inn/Homewood Suites Hotel Division of The Promus Companies from 1991 to 1993.
From 1990 to 1991, Mr. Sullivan was the Vice President of Development of the
Hampton Inn Hotel Division of The Promus Companies. Mr. Sullivan is also a
director of Winston Hotels, Inc.

DAVID L. LEVINE became our President and Chief Operating Officer and one of
our directors in May 1998. Mr. Levine was President and Chief Operating Officer
of Equity Inns, Inc., a real estate investment trust that specializes in hotel
acquisitions, from June 1994 to April 1998. Mr. Levine was also President and
Chief Operations Officer of Trust Management Inc., which operated Equity Inns
properties, from June 1994 until November 1996. Prior to that, he was President
of North American Hospitality, Inc., a hotel management and consulting company,
which he formed in 1985.

JEFFERY M. JARVIS became our Senior Vice President and Chief Financial
Officer in May 1998. From April 1995 to January 1998, Mr. Jarvis was the Vice
President, Controller and Principal Accounting Officer of Promus Hotel
Corporation. From September 1994 to April 1995, Mr. Jarvis was the Director of
Special Projects for The Promus Companies. He was the Director of Finance of
Harrah's St. Louis Riverport from June 1994 to September 1994, and was the
Assistant Controller of The Promus Companies from 1992 to 1994. From 1979 to
1992, Mr. Jarvis was a Senior Audit Manager of Arthur Andersen LLP.

W. MICHAEL MURPHY became our Senior Vice President and Chief Development
Officer in May 1998. Mr. Murphy was President of Footprints International, a
company involved in the planning of resort properties in the Bahamas, from 1996
to 1997. From 1994 to 1996, he was a Senior Managing Director of Geller & Co., a
Chicago-based hotel advisory and asset management firm. Prior to joining Geller
& Co. he acted as a hotel consultant from 1992 to 1994. Mr. Murphy was a
founding partner of the hotel investment firm of Moeckel Murphy (1990-1992) and
a founding general partner of Metric Partners (1981-1990), a real estate
investment company that was a joint venture between the partners of The Fox
Group and Metropolitan Life Insurance Company. Prior to that time, he was the
Director of Real Estate for Holiday Inns, Inc. from 1973 to 1981.

JULES S. SOWDER became our Senior Vice President and Chief Marketing Officer
in May 1998. Ms. Sowder was Vice President of Marketing for Promus Hotel
Corporation from 1995 to January 1998. From 1993 to 1995, she served as the Vice
President of Marketing for the Hampton Inn division of Promus Hotel Corporation.
She served as Director of Marketing for the Hampton Inn division from 1990 to
1993. Ms. Sowder has been recognized by Travel Agent Magazine as one of the Top
10 most successful women in the hotel industry.

JOHN K. LINES became our Senior Vice President, General Counsel and
Secretary in May 1998. Mr. Lines was General Counsel and Secretary of Insignia
Financial Group, Inc., a publicly-traded commercial property management and
brokerage company from 1994 until March 1998. He also served as Vice President
and Secretary of Insignia Properties Trust from 1996 until March 1998. From May
1993 until June 1994, Mr. Lines was employed as Assistant General Counsel and
Vice President of Ocwen Financial Corporation, a unitary thrift holding company.
From October 1991 until April 1993, Mr. Lines was employed as Senior Attorney of
Bank One Corporation in Columbus, Ohio.

FREDERICK L. FARMER became our Senior Vice President and Chief Information
Officer in May 1998. Mr. Farmer was Senior Vice President for Internet and
Desktop Services of Marriott International from November 1996 to April 1998. He
also served as Vice President of Data Resources & Services for Marriott
International from March 1992 to November 1996.

WILLIAM W. ABBOTT, JR. became one of our directors in November 1998 and is
also one of our consultants. He previously served as Vice Chairman of Abbott
Resorts, Inc. from March 1997 to November 1998. He served as President and
Chairman of the board of directors of Abbott Resorts from 1976 to March 1997.

ELAN J. BLUTINGER has been one of our directors since our formation in
September 1997. He is a co-founder and a Managing Director of Alpine
Consolidated II, LLC and a partner in Alpine Consolidated III, LLC, each a
merchant bank specializing in the consolidation of fragmented industries. He is
a director and co-founder of Travel Services International, Inc. and is Chairman
of its Compensation Committee. From 1987 until 1995, he was the Chief Executive
Officer of Shoppers Express, which became "OnCart" in 1997, an electronic
retailing service, which he founded. From 1983 until its acquisition in 1986 by
Independent Distribution Incorporated, Mr. Blutinger was Chief Executive Officer
of DSI, a wholesale software distributor.

D. FRASER BULLOCK has been one of our directors since our formation in
September 1997. He is a Managing Director of Alpine Consolidated II, LLC and
Alpine Consolidated III, LLC. He is a director and co-founder of Travel Services
International, Inc. and is Chairman of its Audit Committee. From its inception
in 1994 to 1996, he was the President and Chief Operating Officer of VISA
Interactive, a wholly-owned subsidiary of VISA International. In 1993, Mr.
Bullock became the President and Chief Operating Officer of U.S. Order, Inc., a
provider of remote electronic transaction processing, until it was acquired by
VISA International in 1994. From 1991 to 1992, Mr. Bullock was the Senior Vice
President of U.S. Order, Inc. From 1986 to 1991, he was the Chief Financial
Officer and Executive Vice President of World Corp., Inc., a holding company
with various operating subsidiaries including World Airways, Inc. Mr. Bullock
was a founding partner of Bain Capital, a Manager of Bain and Company, and a
founder of MediVision, Inc., a company involved in consolidating eye surgery
centers.

JOSHUA M. FREEMAN became one of our directors in May 1998. He has served
since 1998 as Chairman, and from 1992 to 1998 served as the President and Chief
Operating Officer of Carl M. Freeman Associates, Inc., a real estate development
and management company. From 1996 to 1998 he also served as President and
managing member of Coastal Resorts Realty, L.L.C. and as President and a
director of Coastal Resorts Management, Inc.

HEIDI O'LEARY HOUSTON became one of our directors in May 1998. She formed
Houston and O'Leary Company in 1986 and has served as President and principal
broker since that time. She formed her own real estate brokerage and development
company in 1976. From 1976 to 1986 she consulted on redevelopment projects in
Denver and developed residential and commercial real estate in Denver and Aspen.

MICHAEL D. ROSE became one of our directors in May 1998. He served as
Chairman of Promus Hotel Corporation from April 1995 to December 1997. From June
1995 to December 1996, he was Chairman of the board of directors of Harrah's
Entertainment, Inc. Prior to that, Mr. Rose served as Chairman of the board of
directors from 1989 to 1995 and Chief Executive Officer and President from 1989
to 1991 of the Promus Companies, Inc. From 1984 to 1990 he was the Chairman of
the board of directors and from 1988 to 1990 he was the President and Chief
Executive Officer of Holiday Corporation. Mr. Rose is also a director of
Ashland, Inc., Darden Restaurants, Inc., FelCor Lodging Trust, Inc., First
Tennessee National Corporation, General Mills, Inc. and Stein Mart, Inc.

ANDRE S. TATIBOUET became one of our directors in May 1998. He has been
President of Aston Hotels & Resorts since October 1998. He served as Chairman
and Chief Executive Officer of Aston from 1967 to 1998. Mr. Tatibouet is a
director of the Hawaii Hotel Association, a director and former president of the
Hawaii Visitors Bureau, and a director of the American Hotel & Motel
Association.

JOSEPH V. VITTORIA became one of our directors in May 1998. He has been the
Chairman and Chief Executive Officer of Travel Services International, Inc., a
leading single source distributor of specialized leisure travel services, since
July 1997. From September 1987 to February 1997, Mr. Vittoria was the Chairman
and Chief Executive Officer of Avis, Inc., a multinational auto rental company.
Mr. Vittoria serves on the board of directors of Carey International, Inc., CD
Radio, Inc., Transmedia Europe and Transmedia Asia.

THEODORE L. WEISE became one of our directors in May 1998. Since February
1998, Mr. Weise has been the President and Chief Executive Officer of Federal
Express Corporation, one of the world's largest transportation companies. He was
previously Executive Vice President and Chief Operating Officer of Federal
Express Corporation from February 1996 to January 1998. From August 1991 to
February 1996 he served as Senior Vice President of Air Operations for Federal
Express.

SELLING STOCKHOLDERS

The following table sets forth the beneficial ownership of our shares as of
May 20, 1999, and is adjusted to reflect the sale of shares of common stock in
this offering by all stockholders selling shares in this offering. This table
assumes that the underwriters have not exercised their over-allotment option.

SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
OFFERING NUMBER OFFERING
------------------------ OF SHARES ------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT BEING OFFERED NUMBER PERCENT
- ---------------------------------------------------------- --------- ------------- ------------- --------- -------------

Luis Alonso (1)(2)(3)..................................... 124,250 * 100,000 24,250 *
ATSJ Robinson Investment Company Ltd.(4).................. 25,000 * 8,526 16,474 *
B&LR Investment Company(4)................................ 294,367 1.7% 54,154 240,213 1.2%
Daniel C. Blair (3)....................................... 83,333 * 20,000 63,333 *
Elan J. Blutinger (5)(6)(7)............................... 608,538 3.5% 142,102 466,436 2.4%
Douglas R. Brindley (2)(3)(8)............................. 196,167 1.1% 60,000 136,167 *
D. Fraser Bullock (5)(6)(7)(9)............................ 629,568 3.6% 144,470 485,098 2.5%
Pat Hodnett Cooper (3).................................... 52,225 * 27,225 25,000 *
Patrick Curry (3)......................................... 88,111 * 33,000 55,111 *
William DeArman........................................... 22,848 * 10,822 12,026 *
Paul T. Dobson (2)(3)..................................... 85,334 * 20,000 65,334 *
Sharon Benson Doucette (3)(10)............................ 150,000 * 75,000 75,000 *
Joshua D. Freeman (3)(5)(7)(11)........................... 1,061,990 6.1% 109,555 952,435 4.9%
Stephen Garchik (12)...................................... 30,027 * 14,223 15,804 *
Evan H. Gull (2)(3)....................................... 88,111 * 30,000 58,111 *
Roy Hodnett (3)........................................... 136,691 * 87,141 49,550 *
Brenda Lopez Ibanez (3)................................... 32,333 * 20,000 12,333 *
Thomas A. Leddy (3)....................................... 114,545 * 25,000 89,545 *
William J. Lynch (13)..................................... 224,744 1.3% 23,684 201,060 1.0%
James George Lynch (13)................................... 197,880 1.1% 23,684 174,196 *
J. Patrick McCurdy (2)(3)(14)............................. 135,152 * 26,000 109,152 *
Daniel Meehan (2)(3)(15).................................. 98,633 * 25,000 73,633 *
Ana Maria Moreira (3)..................................... 32,333 * 20,000 12,333 *
Domingo A. Moreira (3).................................... 32,333 * 20,000 12,333 *
Domingo R. Moreira (3).................................... 185,918 1.1% 100,000 85,918 *
Leonard A. Potter (5)(13)................................. 263,583 1.5% 94,735 168,848 *
Stuart & Carole Potter.................................... 17,787 * 7,105 10,682 *
Steven A. Schein (3)...................................... 38,643 * 25,000 13,643 *
Daniel Shaw (3)........................................... 28,219 * 24,000 4,219 *
John D. Sullivan.......................................... 14,000 * 5,000 9,000 *
Brian S. Sullivan......................................... 14,000 * 5,000 9,000 *
Andre S. Tatibouet (3)(7)................................. 1,708,333 9.8% 427,083 1,281,250 6.6%
Austin Trupp (3).......................................... 52,225 * 10,000 42,225 *
Hans F. Trupp (2)(3)...................................... 651,142 16) 3.7% 60,000 466,776 17) 2.4%
Carolyn Williams (3)...................................... 58,154 * 45,000 13,154 *
Other selling stockholders (18)........................... 169,591 * 77,491 92,100 *

- ------------------------------
* Less than 1.0%
(1) Includes 3,000 shares held by his spouse as custodian for his minor
children.
(2) Director of ResortQuest from its inception through May 13, 1999.
(3) Former stockholder of a ResortQuest founding company.
(4) Mr. Robinson, who controls this company, served as a Managing Director of
Alpine Consolidated II, which initially capitalized ResortQuest.
(5) Includes 10,000 shares which may be acquired upon the exercise of options.
(6) Served as a Managing Director of Alpine Consolidated II.
(7) Director of ResortQuest from its inception to the present.
(8) Includes 97,500 shares owned by his spouse.
(9) Includes 5,000 shares held by Mr. Bullock as custodian of his minor
children.
(10) Director of ResortQuest from its inception through February 23, 1999.
(11) Includes 477,750 shares owned by CMF Coastal Resorts L.L.C., in which Mr.
Freeman has a 98% membership interest, 33,000 shares held by the Carl M.
Freeman Foundation, Inc., of which Mr. Freeman is a trustee, and 193,383
shares owned by CMF RQI Holdings L.L.C. Mr. Freeman is the managing member
of CMF RQI Holdings and has sole voting and dispositive power for 118,633
shares and no voting and sole dispositive power for an additional 74,750
shares held by CMF RQI Holdings. Mr. Freeman disclaims beneficial ownership
of 9,555 shares held by CMF Coastal Resorts, 33,000 shares held by the
Freeman Foundation and 74,750 shares held by CMF RQI Holdings.
(12) Excludes 36,000 shares held in trusts for Mr. Blutinger's children as to
which Mr. Garchik is trustee, of which 17,052 shares are being offered for
sale in this offering and are included under Other selling stockholders.
(13) Served as a Managing Director of Capstone Partners, which initially
capitalized ResortQuest.
(14) Includes 569 shares held in trust for his minor children.
(15) Includes 300 shares owned by his minor children.
(16) Includes 264,450 shares for which he has sole voting power pursuant to a
revocable proxy.
(17) Includes 140,084 shares for which he will have sole voting power after the
offering pursuant to a revocable proxy.
(18) Includes stockholders who, in the aggregate, own fewer than 1% of
outstanding shares.

SHARES ELIGIBLE FOR FUTURE SALE

We had 17,439,040 shares of our common stock outstanding as of May 20, 1999.
The 6,670,000 shares of our common stock sold in the initial public offering are
freely tradeable unless held by our affiliates, or subject to contractual
transfer restrictions described below. Simultaneous with the closing of the
acquisition of the 13 founding companies, the stockholders of the 13 founding
companies received, in the aggregate, 6,119,656 shares, and our management and
founders received 3,134,630 shares. These 9,254,286 shares have not been
registered under the Securities Act of 1933, and, therefore, may not be sold
unless registered under the Securities Act or sold pursuant to an exemption from
registration, such as the exemption provided by Rule 144. These stockholders
also have demand registration rights beginning two years after the initial
public offering, which generally entitles them to require us to register their
shares, and piggyback registration rights, which entitles them to require us to
register their shares if we propose to register any other shares under the
Securities Act, other than a registration effected solely to implement an
employee benefit plan or a transaction to which Rule 145 under the Securities
Act applies.

In general, under Rule 144 as currently in effect, if one year has elapsed
since the later of the date of the acquisition of the restricted shares of
common stock from either us or any of our affiliates, the acquiror or subsequent
holder thereof may sell, within any three-month period commencing 90 days after
the date of the prospectus relating to the initial public offering, a number of
shares that does not exceed the greater of 1% of the then outstanding shares of
the common stock, or the average weekly trading volume of the common stock on
the New York Stock Exchange during the four calendar weeks preceding the date on
which notice of the proposed sale is sent to the Securities and Exchange
Commission. Sales under Rule 144 are also subject to certain manner of sale
provisions, notice requirements and the availability of current public
information about us. If two years have elapsed since the later of the date of
the acquisition of restricted shares of common stock from us or any of our
affiliates, a person who is not deemed to have been an affiliate of ResortQuest
at any time for 90 days preceding a sale would be entitled to sell such shares
under Rule 144 without regard to the volume limitations, manner of sale
provisions or notice requirements.

We have registered 3,000,000 shares of common stock under the Securities Act
for use as consideration in acquisitions. These shares will be, upon issuance
thereof, freely tradable unless contractually restricted or acquired by parties
to the acquisition or affiliates of such parties, other than the issuer, in
which case they may be sold pursuant to Rule 145 under the Securities Act. Rule
145 permits such persons to resell immediately securities acquired in
transactions covered under the Rule, as long as such securities are resold in
accordance with the public information, volume limitations and manner of sale
requirements of Rule 144. If a period of one year has elapsed since the date
such securities were acquired in such transaction and if the issuer meets the
public information requirements of Rule 144, Rule 145 permits a person who is
not an affiliate of the issuer to freely resell such securities.

Of the 3,000,000 shares of common stock that we have registered for use as
consideration in acquisitions, we have issued 1,514,754 shares in connection
with the 12 acquisitions which have closed since the initial public offering.
All of these shares were registered under the Securities Act and 147,374 of
these shares are subject to certain contractual transfer restrictions expiring
between May 30, 1999 and February 1, 2001. The remaining 1,367,380 registered
shares are generally freely tradeable after issuance, unless the resale thereof
is contractually restricted or unless the holders thereof are subject to the
restrictions on resale provided in Rule 145 under the Securities Act.

ResortQuest stockholders, who include representatives of Alpine Consolidated
II and Capstone Partners (entities who initially capitalized ResortQuest),
former stockholders of the founding companies, directors and management have
agreed not to sell, transfer or otherwise dispose of 8,497,282 shares for a
period beginning on May 26, 1999 and ending 90 days from the date of this
prospectus without the prior written consent of Salomon Smith Barney Inc. Of the
8,497,282 shares, Salomon Smith Barney Inc. has waived the lock-up with respect
to 1,962,311 shares to be sold by the selling stockholders in this offering. The
remaining 37,689 shares being sold by the selling stockholders were not subject
to any lock-up agreements. Upon completion of this offering and expiration of
the lock-up agreements, an aggregate of 6,534,971 additional shares will be
available for sale to the public upon expiration of any Rule 145 restrictions
and subject to any limitations imposed by Rule 144.

Sales, or the availability for sale of, substantial amounts of our common
stock in the public market could adversely affect prevailing market prices and
our ability to raise equity capital in the future.

UNDERWRITING

Subject to the terms and conditions stated in the underwriting agreement
dated the date hereof, each underwriter named below has severally agreed to
purchase, and we and the selling stockholders have agreed to sell to such
underwriter, the number of shares set forth opposite the name of such
underwriter.

NAME NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------

Salomon Smith Barney Inc...................................................
ING Baring Furman Selz LLC.................................................
Morgan Keegan & Company, Inc...............................................
Raymond James & Associates, Inc............................................
The Robinson-Humphrey Company, LLC.........................................
SG Cowen Securities Corporation............................................
-------
Total..................................................................
-------
-------

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares included in this offering are subject to
approval of certain legal matters by counsel and to certain other conditions.
The underwriters are obligated to purchase all the shares (other than those
covered by the over-allotment option described below) if they purchase any of
the shares.

The underwriters, for whom Salomon Smith Barney Inc., ING Baring Furman Selz
LLC, Morgan Keegan & Company, Inc., Raymond James & Associates, Inc., The
Robinson-Humphrey Company, LLC, and SG Cowen Securities Corporation are acting
as representatives, propose to offer some of the shares directly to the public
at the public offering price set forth on the cover page of this prospectus and
some of the shares to certain dealers at the public offering price less a
concession not in excess of $ per share. The underwriters may allow, and such
dealers may reallow, a concession not in excess of $ per share on sales to
certain other dealers. If all of the shares are not sold at the initial offering
price, the representatives may change the public offering price and the other
selling terms.

The selling stockholders have granted to the underwriters an option,
exercisable for 30 days from the date of this prospectus, to purchase up to
600,000 additional shares of common stock at the public offering price less the
underwriting discount. The underwriters may exercise such option solely for the
purpose of covering over-allotments, if any, in connection with this offering.
To the extent such option is exercised, each underwriter will be obligated,
subject to certain conditions, to purchase a number of additional shares
approximately proportionate to such underwriter's initial purchase commitment.

ResortQuest stockholders, who include representatives of Alpine Consolidated
II and Capstone Partners, former stockholders of the founding companies,
directors and management have agreed not to sell, transfer or otherwise dispose
of 8,497,282 shares for a period beginning on May 26, 1999 and ending 90 days
from the date of this prospectus without the prior written consent of Salomon
Smith Barney Inc. Salomon Smith Barney Inc. in its sole discretion may release
any of the securities subject to lock-up agreements at any time without notice.
Of the 8,497,282 shares, Salomon Smith Barney Inc. has waived the lock-up with
respect to 1,962,311 shares to be sold by the selling stockholders in this
offering. The remaining 37,689 shares being sold by the selling stockholders
were not subject to any lock-up agreements.

The common stock is listed on the New York Stock Exchange under the symbol
"RZT."

The following table shows the underwriting discounts and commissions to be
paid to the underwriters by ResortQuest and the selling stockholders in
connection with this offering. These amounts are shown assuming both no exercise
and full exercise of the underwriters' option to purchase additional shares of
common stock.

PAID BY SELLING
PAID BY RESORTQUEST STOCKHOLDERS
-------------------------- --------------------------

FULL FULL
NO EXERCISE EXERCISE NO EXERCISE EXERCISE
------------ ------------ ------------ ------------
Per Share............................ $ $ $ $
Total................................ $ $ $ $

In connection with the offering, Salomon Smith Barney Inc., on behalf of the
underwriters, may purchase and sell shares of common stock in the open market.
These transactions may include over-allotment, syndicate covering transactions
and stabilizing transactions. Over-allotment involves syndicate sales of common
stock in excess of the number of shares to be purchased by the underwriters in
the offering, which creates a syndicate short position. Syndicate covering
transactions involve purchases of the common stock in the open market after the
distribution has been completed in order to cover syndicate short positions.
Stabilizing transactions consist of certain bids or purchases of common stock
made for the purpose of preventing or retarding a decline in the market price of
the common stock while the offering is in progress.

The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Salomon Smith Barney Inc., in covering syndicate short positions or making
stabilizing purchases, repurchases shares originally sold by that syndicate
member.

Any of these activities may cause the price of the common stock to be higher
than the price that otherwise would exist in the open market in the absence of
such transactions. These transactions may be effected on the New York Stock
Exchange or in the over-the-counter market, or otherwise and, if commenced, may
be discontinued at any time.

ResortQuest estimates that the total expenses of this offering will be
$400,000. The selling stockholders will not bear any of the expenses of this
offering.

ResortQuest and the selling stockholders have severally agreed to indemnify
the underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the underwriters may be
required to make in respect of any of those liabilities.

Societe Generale, an affiliate of SG Cowen Securities Corporation, is a
co-agent for ResortQuest's credit facility. In connection with the credit
facility, in addition to interest payments based on outstanding amounts from
time to time, Societe Generale receives an adjustable quarterly commitment fee
based on the ratio of funded debt to pro forma EBITDA. Societe Generale received
a $40,000 fee in December 1998 when it became one of the credit facility
lenders.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for our common stock is American Stock
Transfer & Trust Company.

LEGAL MATTERS

The validity of the issuance of the shares of common stock offered by this
prospectus will be passed upon for us by Akin, Gump, Strauss, Hauer & Feld,
L.L.P., Washington, D.C. Certain legal matters in connection with this offering
will be passed upon for the underwriters by Locke Liddell & Sapp LLP, Dallas,
Texas.

EXPERTS

Our audited financial statements, included elsewhere or incorporated by
reference in this prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports, and are included
in this prospectus in reliance upon the authority of Arthur Andersen LLP as
experts in giving said reports.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement of which this prospectus forms a
part. The registration statement, including the attached exhibits and schedules,
contain additional relevant information about our common stock. The rules and
regulations of the SEC allow us to omit some of the information included in the
registration statement from this prospectus.

In addition, we have filed reports, proxy statements and other information
with the SEC under the Securities Exchange Act. You may read and copy any of
this information at the following locations of the SEC:

Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois
60661-2511

You may obtain information on the operation of the SEC's Public Reference
Room by calling the SEC at 1-800-SEC-0330.

The SEC also maintains an Internet web site that contains reports, proxy
statements and other information regarding issuers, like ResortQuest, that file
electronically with the SEC. The address of that site is http://www.sec.gov. The
SEC file number for our documents filed under the Securities Exchange Act is
1-14115.

The SEC allows us to "incorporate by reference" information into this
prospectus. This means we can disclose important information to you by referring
you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, except
for any such information that is superseded by information included directly in
this document.

This prospectus incorporates by reference the documents listed below that we
have previously filed or will file with the SEC. They contain important
information about us and our financial condition.

- Our Annual Report on Form 10-K for our fiscal year ended December 31,
1998, filed on March 29, 1999.

- Our definitive proxy statement for the 1999 annual meeting of stockholders
filed April 6, 1999.

- Our Quarterly Report on Form 10-Q for our fiscal quarter ended March 31,
1999, filed on May 17, 1999.

- All documents filed with the SEC by us under Sections 13(a), 13(c), 14 and
15(d) of the Securities Exchange Act after the date of this prospectus and
before the offering is terminated, are considered to be a part of this
prospectus, effective the date such documents are filed

- The description of our common stock set forth in our registration
statement filed under Section 12 of the Securities Exchange Act on Form
8-A on May 12, 1998, as incorporated by reference from our registration
statement on Form S-1, as amended (File No. 333-47867), the description of
the Preferred Stock Purchase Rights set forth in our Form 8-A (Amendment

No. 1) filed on March 12, 1999 and any amendment or report filed with the
SEC for purpose of updating such descriptions.

In the event of conflicting information in these documents, the information in
the latest filed document should be considered correct.

You can obtain any of the documents listed above from the SEC, through the
SEC's web site at the address described above, or directly from us, by
requesting them through our web site RESORTQUEST.COM by selecting the Investor
Relations icon.

We will provide a copy of any of these documents without charge, excluding
any exhibits unless the exhibit is specifically listed as an exhibit to the
registration statement of which this prospectus forms a part. If you request any
documents from us, we will mail them to you by first class mail, or another
equally prompt means, within two business days after we receive your request.

INDEX TO FINANCIAL STATEMENTS

PAGE
-----------

RESORTQUEST INTERNATIONAL, INC.:
Report of Independent Public Accountants................................................................ F-2
Consolidated Balance Sheets............................................................................. F-3
Consolidated Statements of Income....................................................................... F-4
Consolidated Statement of Pro Forma Income.............................................................. F-5
Consolidated Statements of Changes in Stockholders' Equity.............................................. F-6
Consolidated Statements of Cash Flows................................................................... F-7
Notes to Consolidated Financial Statements.............................................................. F-8

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of ResortQuest International, Inc.:

We have audited the accompanying consolidated balance sheets of ResortQuest
International, Inc., (a Delaware corporation) and subsidiaries (the "Company"),
as of December 31, 1998 and 1997, and the related consolidated statements of
income, changes in stockholders' equity and cash flows for each of the three
years ended December 31, 1998 (after restatement for the acquisitions accounted
for under the pooling of interests method as discussed in Note 1). These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ResortQuest International,
Inc. and subsidiaries as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the three years ended December 31,
1998, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Memphis, Tennessee,
March 31, 1999.

F-2

RESORTQUEST INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

DECEMBER 31, MARCH 31,
--------------------- -----------

1997 1998 1999
--------- ---------- -----------

(RESTATED) (UNAUDITED)

ASSETS
CURRENT ASSETS
Cash and cash equivalents................................................... $ 4,637 $ 26,247 $ 30,517
Trade and other receivables, net of allowance............................... 1,459 3,929 6,352
Receivables from stockholders............................................... -- 5,209 5,523
Deferred income taxes....................................................... -- 1,297 1,297
Other current assets........................................................ 250 2,276 2,010
--------- ---------- -----------
Total current assets...................................................... 6,346 38,958 45,699
GOODWILL, NET................................................................. -- 130,214 150,345
PROPERTY AND EQUIPMENT, NET................................................... 2,547 16,649 17,217
DEFERRED INCOME TAXES......................................................... -- 211 213
ADVANCES TO STOCKHOLDER....................................................... 7,235 -- --
ADVANCES TO AFFILIATES, NET................................................... 1,799 -- --
OTHER ASSETS.................................................................. 1,145 2,187 2,765
--------- ---------- -----------
Total assets............................................................ $ 19,072 $ 188,219 $ 216,239
--------- ---------- -----------
--------- ---------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt........................................ $ 770 $ 1,234 $ 906
Customer deposits, deferred revenues and payable to property owners......... 1,447 24,639 31,500
Accounts payable and accrued liabilities.................................... 8,123 13,210 17,480
Payable to stockholders..................................................... -- 1,632 517
Other current liabilities................................................... 585 323 164
--------- ---------- -----------
Total current liabilities................................................. 10,925 41,038 50,567
LONG-TERM DEBT, NET OF CURRENT MATURITIES..................................... 4,122 38,098 49,214
OTHER LONG-TERM OBLIGATIONS................................................... 3,019 2,228 2,197
NET LIABILITIES OF DISCONTINUED OPERATIONS.................................... 1,403 -- --
--------- ---------- -----------
Total liabilities....................................................... 19,469 81,364 101,978
--------- ---------- -----------

COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.01 par value, 50,000,000 shares authorized, 1,708,333 and
16,891,927 shares outstanding, respectively............................... 21 171 174
Additional paid-in capital.................................................. 209 136,026 140,781
Excess distributions........................................................ -- (29,500) (29,500)
Retained earnings (accumulated deficit)..................................... (627) 158 2,806
--------- ---------- -----------
Total stockholders' equity (deficit)...................................... (397) 106,855 114,261
--------- ---------- -----------
Total liabilities and stockholders' equity.............................. $ 19,072 $ 188,219 $ 216,239
--------- ---------- -----------
--------- ---------- -----------

The accompanying notes are an integral part of these consolidated financial
statements.

F-3

RESORTQUEST INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------- --------------------
1996 1997 1998 1998 1999
--------- --------- --------- --------- ---------

(RESTATED)
------------------------------------------

(UNAUDITED)

REVENUES
Property management fees.................................. $ 11,283 $ 13,383 $ 27,022 $ 4,972 $ 18,412
Service fees.............................................. 9,872 9,790 15,603 3,108 7,716
Other..................................................... 4,515 3,580 12,734 586 5,528
--------- --------- --------- --------- ---------
Total revenues.......................................... 25,670 26,753 55,359 8,666 31,656

OPERATING EXPENSES
Direct operating.......................................... 14,860 13,635 31,596 4,411 14,469
General and administrative................................ 6,415 7,092 15,125 1,614 9,437
Depreciation and amortization............................. 425 521 3,148 115 1,558
--------- --------- --------- --------- ---------
Total operating expenses................................ 21,700 21,248 49,869 6,140 25,464

OPERATING INCOME............................................ 3,970 5,505 5,490 2,526 6,192

OTHER INCOME (EXPENSE)
Interest expense, net..................................... (736) (763) (403) (233) (889)
Other..................................................... 394 677 (104) -- 242
--------- --------- --------- --------- ---------
INCOME BEFORE INCOME TAXES.................................. 3,628 5,419 4,983 2,293 5,545

PROVISION FOR INCOME TAXES.................................. 90 90 1,518 28 2,505

INCOME FROM CONTINUING OPERATIONS........................... 3,538 5,329 3,465 2,265 3,040
INCOME (LOSS) FROM DISCONTINUED OPERATIONS.............. 455 (1,494) 1,347 1,557 --
--------- --------- --------- --------- ---------

NET INCOME.................................................. $ 3,993 $ 3,835 $ 4,812 $ 3,822 $ 3,040
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
EARNINGS PER SHARE
Basic
Continuing operations................................... $ 1.68 $ 2.53 $ 0.32 $ 1.08 $ 0.18
Discontinued operations................................. 0.22 (0.70) 0.12 0.74 --
--------- --------- --------- --------- ---------
Net income.............................................. $ 1.90 $ 1.83 $ 0.44 $ 1.82 $ 0.18
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Diluted
Continuing operations................................... $ 1.68 $ 2.53 $ 0.32 $ 1.08 $ 0.17
Discontinued operations................................. 0.22 (0.70) 0.12 0.74 --
--------- --------- --------- --------- ---------
Net income.............................................. $ 1.90 $ 1.83 $ 0.44 $ 1.82 $ 0.17
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

The accompanying notes are an integral part of these consolidated financial
statements.

F-4

RESORTQUEST INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF PRO FORMA INCOME

(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)

THREE MONTHS ENDED
YEAR ENDED MARCH 31,
DECEMBER 31, --------------------
1998 1998 1999
------------ --------- ---------

REVENUES
Property management fees................................................ $ 52,942 $ 16,437 $ 18,364
Service fees............................................................ 25,852 6,098 7,717
Other................................................................... 21,957 4,292 5,528
------------ --------- ---------
Total revenues........................................................ 100,751 26,827 31,609

OPERATING EXPENSES
Direct operating........................................................ 52,290 12,435 14,427
General and administrative.............................................. 29,779 7,282 8,966
Depreciation and amortization........................................... 5,746 1,401 1,558
------------ --------- ---------
Total operating expenses.............................................. 87,815 21,118 24,951

OPERATING INCOME.......................................................... 12,936 5,709 6,658

OTHER INCOME (EXPENSE)
Interest expense, net................................................... (2,082) (745) (889)
Other................................................................... -- 153 242
------------ --------- ---------
INCOME BEFORE INCOME TAXES................................................ 10,854 5,117 6,011
PROVISION FOR INCOME TAXES................................................ 5,457 2,278 2,682
------------ --------- ---------
NET INCOME................................................................ $ 5,397 $ 2,839 $ 3,329
------------ --------- ---------
------------ --------- ---------
EARNINGS PER SHARE
Basic................................................................... $ 0.32 $ 0.17 $ 0.19
------------ --------- ---------
------------ --------- ---------
Diluted................................................................. $ 0.31 $ 0.17 $ 0.19
------------ --------- ---------
------------ --------- ---------

The accompanying notes are an integral part of these consolidated financial
statements.

F-5

RESORTQUEST INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(RESTATED)

RETAINED
COMMON STOCK ADDITIONAL EARNINGS
------------------------- PAID-IN EXCESS (ACCUMULATED
SHARES AMOUNT CAPITAL DISTRIBUTIONS DEFICIT) TOTAL
------------ ----------- ---------- ------------ ------------- ----------

BALANCE, December 31, 1995................... 2,101,113 $ 21 $ 209 $ -- $ 38 $ 268
Net income................................. -- -- -- -- 3,993 3,993
Distributions.............................. -- -- -- -- (4,315) (4,315)
------------ ----- ---------- ------------ ------------- ----------

BALANCE, December 31, 1996................... 2,101,113 21 209 -- (284) (54)
Net income................................. -- -- -- -- 3,835 3,835
Distributions.............................. -- -- -- -- (4,178) (4,178)
------------ ----- ---------- ------------ ------------- ----------

BALANCE, December 31, 1997................... 2,101,113 21 209 -- (627) (397)
Net income................................. -- -- -- -- 4,812 4,812
Initial public offering.................... 6,670,000 67 59,954 -- -- 60,021
Distributions -- -- -- (29,500) (4,027) (33,527)
Stock issued in connection with
Combinations............................. 7,545,953 75 68,620 -- -- 68,695
Post-IPO acquisitions.................... 775,702 8 7,243 -- -- 7,251
------------ ----- ---------- ------------ ------------- ----------

BALANCE, December 31, 1998................... 17,092,768 $ 171 $ 136,026 $ (29,500) $ 158 $ 106,855
Net income (unaudited)..................... -- -- -- -- 3,040 3,040
Distributions (unaudited).................. -- -- -- -- (392) (392)
Stock issued in connection with
Combinations (unaudited)................. 296,877 3 4,755 -- -- 4,758
------------ ----- ---------- ------------ ------------- ----------

BALANCE, March 31, 1999 (unaudited).......... 17,389,645 $ 174 $ 140,781 $ (29,500) $ 2,806 $ 114,261
------------ ----- ---------- ------------ ------------- ----------
------------ ----- ---------- ------------ ------------- ----------

The accompanying notes are an integral part of these consolidated financial
statements.

F-6

RESORTQUEST INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------------- ---------------------

1996 1997 1998 1998 1999
--------- --------- ---------- --------- ----------
(RESTATED) (UNAUDITED)
-------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.............................................. $ 3,993 $ 3,835 $ 4,812 $ 3,822 $ 3,040
(Income) loss from discontinued operations.............. (455) 1,494 (1,347) (1,557) --
--------- --------- ---------- --------- ----------
Income from continuing operations..................... 3,538 5,329 3,465 2,265 3,040
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities
Depreciation and amortization....................... 425 521 3,148 115 1,558
Changes in operating assets and liabilities
Trade and other receivables....................... (205) 126 1,631 (981) (2,139)
Accounts payable and accrued liabilities.......... 995 1,217 (3,288) (1,615) 3,455
Customer deposits, deferred revenue and payable to
property owners................................. 305 115 10,471 (747) 1,098
Deferred income taxes............................. -- -- 503 -- --
Other............................................. (455) (101) (2,566) 1,495 (2,315)
--------- --------- ---------- --------- ----------
Cash provided by continuing operations.................. 4,603 7,207 13,364 532 4,697
Cash flows used in discontinued operations............ (253) (17) (56) -- --
--------- --------- ---------- --------- ----------
Net cash provided by operating activities........... 4,350 7,190 13,308 532 4,697
--------- --------- ---------- --------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Cash portion of acquisitions, net....................... -- -- (35,518) -- (9,330)
Purchases of property and equipment..................... (111) (380) (4,021) (23) (817)
Other................................................... 304 402 -- 517 --
--------- --------- ---------- --------- ----------
Net cash provided by (used in) investing
activities........................................ 193 22 (39,539) 494 (10,147)
--------- --------- ---------- --------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from public stock issuance................. -- -- 60,021 -- --
Distributions to stockholders........................... (4,315) (4,178) (33,527) (3,571) (392)
Net credit facility borrowings.......................... -- -- 32,000 -- 10,143
Payment of other long-term obligations.................. (1,180) (906) (10,380) (2,050) (31)
Other................................................... 2,165 (2,601) (274) 1,928 --
--------- --------- ---------- --------- ----------
Net cash (used in) provided by financing
activities........................................ (3,330) (7,685) 47,840 (3,693) 9,720
--------- --------- ---------- --------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS...... 1,213 (473) 21,609 (2,667) 4,270
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............ 3,898 5,111 4,638 4,638 26,247
--------- --------- ---------- --------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD.................. $ 5,111 $ 4,638 $ 26,247 $ 1,971 $ 30,517
--------- --------- ---------- --------- ----------
--------- --------- ---------- --------- ----------

The accompanying notes are an integral part of these consolidated financial
statements.

F-7

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 1998

1. BASIS OF PRESENTATION

FORMATION

ResortQuest International, Inc. (a Delaware Corporation, "ResortQuest" or
the "Company"), formerly known as Vacation Properties International, Inc., was
formed to create the first national branded provider of vacation condominium and
home rentals and management in premier destination resorts. Effective with the
closing of ResortQuest's initial public offering on May 26, 1998 (the "IPO"),
the Company acquired 12 vacation rental and property management companies (Hotel
Corporation of the Pacific, Inc. ("Aston"), Brindley & Brindley Realty, Inc. and
B&B on the Beach, Inc., Coastal Resorts Management, Inc., and Coastal Resorts
Realty, L.L.C., Collection of Fine Properties, Inc., Houston and O'Leary
Company, Maui Condo & Home Realty, Inc., The Maury People, Inc., Howey
Acquisition, Inc. and Priscilla Murphy Realty, Inc., Resort Property Management,
Inc., Telluride Resort Accommodations, Inc., Trupp-Hodnett Enterprises, Inc. and
THE Management Company, and Whistler Chalets Limited) and one leading vacation
rental and property management software company (First Resort Software, Inc.
("First Resort")) (collectively, the "Founding Companies") (the "Combinations").
However, for accounting and reporting purposes, Aston was identified as the
accounting acquiror and the remaining Founding Companies along with ResortQuest
were accounted for under the purchase method of accounting.

ResortQuest has completed three acquisitions since its IPO that were
accounted for under the pooling of interests method. These acquisitions were
Plantation Resort Management, Inc. ("Plantation Resort"), completed August 31,
1998, High Country Management, Inc. ("High Country"), completed March 31, 1999,
and Mountain High Management ("Mountain High"), completed March 31, 1999
(collectively, the "Poolings"). As prescribed by Accounting Principles Board
opinion No. 16, "Business Combinations", the historical financial statements of
ResortQuest have been restated for all periods presented on a combined basis to
reflect the Poolings. Accordingly, the historical consolidated financial
statements include the financial results of Aston and the Poolings prior to the
Combinations and the IPO, and include the combined balances and transactions of
ResortQuest and the Founding Companies only since May 26, 1998. Additionally,
the Company has included the combined balances and transactions of its remaining
acquisitions since their respective dates of acquisition. Comparability of
actual results for all actual periods presented may be misleading and are not
necessarily indicative of the results of the combined operations. The results of
operations for the separate companies and the restated combined results
presented in the accompanying consolidated financial statements are as follows:

THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------- --------------------
(IN THOUSANDS) 1996 1997 1998 1998 1999
--------- --------- --------- --------- ---------

(UNAUDITED)
Revenues
ResortQuest, as previously reported...................... $ 19,460 $ 19,554 $ 49,524 $ 6,078 $ 29,857
Pooled Combinations...................................... 6,210 7,199 5,835 2,588 1,799
--------- --------- --------- --------- ---------
Combined Revenues, as restated......................... $ 25,670 $ 26,753 $ 55,359 $ 8,666 $ 31,656
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Net Income
ResortQuest, as previously reported...................... $ 3,598 $ 3,591 $ 4,416 $ 3,254 $ 2,323
Pooled Combinations...................................... 395 244 396 568 717
--------- --------- --------- --------- ---------
Combined Net Income, as restated....................... $ 3,993 $ 3,835 $ 4,812 $ 3,822 $ 3,040
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------

F-8

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

PRO FORMA FINANCIAL INFORMATION

To provide better comparability, the consolidated statements of pro forma
income include the financial results of ResortQuest, the Combinations and the
acquisition of Abbott Realty, Inc. ("Abbott Resorts") as if such acquisitions
had occurred on January 1, 1998. The consolidated statements of pro forma
income, excluding income from discontinued operations, include: (i) the effects
of our acquisition of the Combinations; (ii) the effects of our acquisition of
Abbott Resorts; (iii) the effects of certain reductions in salary, bonuses and
benefits derived from contractual agreements which establish the compensation of
the former owners and certain key employees of the Combinations, Abbott Resorts
and our three acquisitions accounted for as poolings of interests as if they had
occurred on January 1, 1998; (iv) the effects of an assumed comparable corporate
expense for each of the four quarters ended December 31, 1998, based on actual
corporate expense incurred for the three months ended March 31, 1999; (v) the
effects of goodwill amortization, which is principally not deductible for income
tax purposes, recorded as a result of the acquisitions of the Combinations and
Abbott Resorts; (vi) the effects of the provision for federal and state income
taxes relating to converting certain operations to C Corporation status and the
tax impact of pro forma adjustments; (vii) the effects of additional revenue
that we would have realized related to certain property management contracts
with affiliates of the Combinations and Abbott Resorts, based on contractual
rates that were not reflective of market conditions; and (viii) the effects of
excluding certain depreciation and interest expense related to certain assets
and liabilities not acquired from the Combinations and Abbott Resorts.

POST-IPO ACQUISITIONS

Since the IPO, ResortQuest has completed five acquisitions: Goldpoint,
located in Breckenridge, Colorado, effective July 31, 1998; Plantation Resort,
located in Gulf Shores, Alabama, effective August 31, 1998; Whistler Exclusive
Properties, Ltd. ("Whistler Exclusive") located in Whistler, British Columbia,
Canada, effective September 3, 1998; Abbott Resorts, located in Destin, Florida,
effective September 30, 1998; and Columbine Management & Real Estate
("Columbine") located in Dillon, Colorado, effective December 1, 1998
(collectively "Post-IPO Acquisitions"). Goldpoint, Whistler Exclusive, Abbott
Resorts and Columbine were accounted for under the purchase method of
accounting, and accordingly, their results of operations have been included
since their respective dates of acquisition.

Nonrecurring acquisition costs incurred in connection with the Plantation
Resort transaction totaled approximately $134,000 and, in accordance with
Accounting Principles Bulletin Opinion No. 16, have been included as an expense
in the consolidated statement of income for 1998.

The acquisition of Abbott Resorts is considered significant to ResortQuest
for financial reporting purposes. ResortQuest paid $40.0 million in total
consideration to the prior stockholders of Abbott Resorts ($26.5 million in
cash, $6.6 million in Common Stock, and $6.8 million in assumed debt). The
purchase price was allocated to tangible assets and liabilities with the
remaining $32.2 million to goodwill. The following table presents pro forma
results of operations as though Abbott Resorts had been acquired on January 1,
1997. These pro forma results do not reflect any pro forma adjustments related
to the Founding Companies or the Post-IPO Acquisitions. The unaudited pro forma
results of

F-9

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

operations for the years ended December 31, 1997 and 1998 are not necessarily
indicative of the results to be expected for the full year.

YEARS ENDED DECEMBER
31,
--------------------

(IN THOUSANDS, EXCEPT SHARE AMOUNTS) 1997 1998
--------- ---------
(UNAUDITED)
Revenue............................................................. $ 53,101 $ 80,858
--------- ---------
--------- ---------
Net income.......................................................... $ 3,993 $ 6,414
--------- ---------
--------- ---------
Earnings per share
Basic............................................................. $ 1.40 $ 0.56
--------- ---------
--------- ---------
Diluted........................................................... $ 1.40 $ 0.56
--------- ---------
--------- ---------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

PROPERTY MANAGEMENT FEES

At December 31, 1998, ResortQuest has entered into 12,320 exclusive and
1,330 non-exclusive rental and management agreements with owners of condominium
and homes in 23 resort locations throughout North America. The exclusive
agreements entitle ResortQuest to receive a fee for renting and maintaining
these properties. ResortQuest requires certain minimum deposits, as reservations
are booked. These deposits are non-refundable and recorded as a component of
customer deposits, deferred revenue and payable to owners, along with remaining
rental prepayments. ResortQuest recognizes revenue from property rental and
management fees ratably over the term of guest stays. ResortQuest records
revenue for cancellations upon occurrence.

SERVICE FEES

ResortQuest internally provides or arranges through third parties other
services for property owners or guests. Other services include reservation,
housekeeping, long-distance telephone, ski rentals, lift tickets, beach
equipment and pool cleaning. Internally provided services are recognized as
service fee revenue when the service is provided. Services provided by third
parties are generally billed directly to property owners and are not included in
the accompanying consolidated financial statements.

OTHER

ResortQuest recognizes other revenues related to real estate broker
commissions, food & beverage sales and First Resort software and maintenance
sales. ResortQuest has real estate broker sales operations in the following
locations: Aspen, Colorado; Bethany Beach, Delaware; Islands of Captiva and
Sanibel, Fort Myers, Fort Walton Beaches and Destin, Florida; the Outer Banks,
North Carolina; St. Simons, Georgia; Gulf Shores, Alabama; and the Island of
Nantucket, Massachusetts. ResortQuest recognizes revenues on real estate sales
when such transactions are complete and such revenue is recorded net of the
related agent commission amount. ResortQuest also manages food & beverage
outlets in connection with the management of larger condominium complexes,
primarily in Hawaii and Florida. First Resort sells a fully integrated software
package specifically designed for the property rental business, along with
ongoing service contracts. First Resort recognizes software and maintenance

F-10

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

revenues when the systems are installed and ratably over the service period,
respectively. Other revenues were as follows:

YEARS ENDED DECEMBER 31,
-------------------------------

(IN THOUSANDS) 1996 1997 1998
--------- --------- ---------
Real estate brokerage commissions, net.......................... $ -- $ -- $ 4,858
Food & beverage................................................. 2,185 2,271 2,265
Software sales and service...................................... -- -- 1,954
Other........................................................... 2,330 1,309 3,657
--------- --------- ---------
$ 4,515 $ 3,580 $ 12,734
--------- --------- ---------
--------- --------- ---------

DIRECT OPERATING EXPENSES

Direct operating expenses include expenses related to housekeeping,
maintenance, reservations, marketing and advertising, and other costs associated
with rental and management. Direct operating expenses also include food &
beverage cost of sales and operating expenses as follows:

YEARS ENDED DECEMBER 31,
-------------------------------

(IN THOUSANDS) 1996 1997 1998
--------- --------- ---------
Rental and management........................................ $ 12,748 $ 11,683 $ 29,362
Food & beverage.............................................. 2,112 1,952 2,234
--------- --------- ---------
$ 14,860 $ 13,635 $ 31,596
--------- --------- ---------
--------- --------- ---------

GOODWILL

Goodwill is the excess of the purchase price over fair value of identified
net assets acquired in business combinations accounted for as purchases.
Goodwill is being amortized on a straight-line basis over 40 years, other than
that associated with the acquisition of First Resort, which is amortized over 15
years, representing the approximate remaining useful life of acquired intangible
assets. ResortQuest recognized $1.8 million of goodwill amortization in 1998. In
accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of," subsequent to an acquisition, ResortQuest continually evaluates
whether later events and circumstances have occurred that indicate the remaining
net book value may warrant revision or may not be recoverable. When factors
indicate that the net book value should be evaluated for possible impairment,
the Company uses an estimate of the related business' undiscounted cash flows,
in measuring whether such long-lived assets are recoverable.

INCOME TAXES

Prior to the IPO, Aston had elected S Corporation status as defined by the
Internal Revenue Code and state tax statutes. Under S Corporation status, the
former stockholders report their share of ResortQuest's taxable earnings or
losses in their personal tax returns for the periods prior to the Combinations.

In conjunction with the Combinations, the Company changed from an S
Corporation to a C Corporation for federal and state income tax reporting
purposes, which requires ResortQuest to

F-11

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

recognize the tax consequences of operations in its consolidated statements of
income. The unaudited consolidated statements of pro forma income reflect the
estimated impact of recognizing income tax expenses as if ResortQuest had been a
C Corporation for tax reporting purposes for the years ended December 31, 1997
and 1998.

Under the asset and liability method of accounting for income taxes,
deferred tax assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets, including net operating loss carryforwards,
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in which
those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period when the new rate is enacted.

CASH AND CASH EQUIVALENTS

For the purposes of the balance sheets and statements of cash flows,
ResortQuest considers all investments with original maturities of three months
or less to be cash equivalents. At December 31, 1998, cash and cash equivalents
include $14.3 million of cash held in escrow for prepaid rentals and pending
real estate sales transactions.

INVENTORIES

Inventories consist primarily of food and beverage items and are stated at
the lower of cost (first-in, first-out method) or market.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost or, in the case of equipment
acquired under capital leases, the present value of future lease payments.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets or the lease terms. Expenditures for repairs and
maintenance are charged to expense when incurred. Expenditures for major
renewals and betterments, which extend the useful lives of existing equipment,
are capitalized and depreciated. Upon retirement or disposition of property and
equipment, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recognized in the statements of
income.

FINANCIAL INSTRUMENTS

The carrying values of all financial instruments approximate their estimated
fair value.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

F-12

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

CONCENTRATION OF RISK

Prior to the Combinations, ResortQuest's operations were exclusively located
in the state of Hawaii and were subject to negative events that affect travel
patterns of visitors. After considering the pro forma impact of the Combinations
and Abbott Resorts, Hawaii only accounts for 22% of total revenues and 48% of
operating income of ResortQuest.

NEWLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This statement
establishes accounting and reporting standards for derivatives, including
certain derivative instruments embedded in other contracts (collectively
referred to as derivatives), and for hedging activities. It requires that an
entity recognize all derivatives either as assets or liabilities in the
statement of financial position and measure those instruments at fair value.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform with the 1998
presentation.

3. NOTE RECEIVABLE FROM STOCKHOLDER

In connection with the Combinations, Aston formalized its receivable
resulting from cash advances to its primary stockholder with a $4.0 million
promissory note (the "Note"). The Note bears interest at one-half of one percent
below prime rate of interest, but not less than six percent and not more than 10
percent. Payments under the Note are interest only, due and payable every
January and July 1st. The Note is due on demand with 180 days notice at any time
through May 26, 1999. If payment is not requested within the notice period, the
Note becomes due and payable on May 25, 2008.

Prior to the Combinations, advances were made to Aston affiliated companies
and principal stockholder. Advances to affiliates represent advances to
companies controlled by Aston's principal stockholder. The advances had no
scheduled repayment, and Aston suspended the accrual of interest. In 1996, one
affiliate made a $2.0 million repayment, $112,500 of which was recognized as
previously unrecorded interest. The remaining receivable balance was guaranteed
by Aston's principal stockholder and was repaid during 1998. Advances to Aston's
principal stockholder were primarily utilized relative to the stockholder's
investment in two hotels managed by the Company. The advances are not
collateralized, are non-interest bearing and have no scheduled repayments. The
stockholder made payments of approximately $1.5 million on these advances prior
to the Combinations.

F-13

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

4. DISCONTINUED OPERATIONS

ResortQuest has decided that they will no longer continue to enter into
leasing arrangements for lodging facilities. Accordingly, for all periods
presented in the accompanying financial statements, the financial position,
results of operations and cash flows of the leased assets are reflected as
discontinued operations. Concurrent with the Combinations, Aston assigned such
leases to AST Holdings, Inc., a corporation owned by Aston's principal
stockholder. On May 27, 1998, ResortQuest entered into a contract with AST
Holdings to manage these facilities for a fee.

Net assets (liabilities) of discontinued operations were as follows:

DECEMBER 31,
(IN THOUSANDS) 1997
------------

Current assets.................................................................. $ 2,955
Advances to affiliates.......................................................... 1
Other assets.................................................................... 193
Property and equipment.......................................................... 197
------------
Total assets.................................................................. 3,346
Current liabilities............................................................. (4,119)
Capital lease obligations....................................................... (53)
Other long-term obligations..................................................... (577)
------------
Net liabilities of discontinued operations.................................... $ (1,403)
------------
------------

Income (loss) from discontinued operations are as follows:

YEARS ENDED DECEMBER 31,
-------------------------------

(IN THOUSANDS) 1996 1997 1998
--------- --------- ---------
Revenue...................................................... $ 29,945 $ 30,848 $ 14,304
Operating expenses........................................... 22,833 24,826 10,120
General and administrative expense........................... 6,631 7,317 2,839
--------- --------- ---------
Operating income (loss).................................... 481 (1,295) 1,345
Other (expense) income....................................... (26) (33) 2
--------- --------- ---------
Net income (loss) from discontinued operations............... $ 455 $ (1,328) $ 1,347
--------- --------- ---------
--------- --------- ---------

In addition to the loss from discontinued operations, ResortQuest's
operating results for the year ended December 31, 1997 include a charge of
$166,000 for an expected loss resulting from the disposal of discontinued
operations.

F-14

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

5. SUPPLEMENTAL FINANCIAL INFORMATION

Trade and other receivables consisted of the following:

DECEMBER 31,
--------------------

(IN THOUSANDS) 1997 1998
--------- ---------
Receivable from managed properties....................................... $ 610 $ 1,073
Other.................................................................... 924 2,912
--------- ---------
Total.................................................................. 1,534 3,985
Less--Allowance for doubtful accounts.................................... (75) (56)
--------- ---------
$ 1,459 $ 3,929
--------- ---------
--------- ---------

Property and equipment consisted of the following:

ESTIMATED DECEMBER 31,
USEFUL LIFE --------------------
(IN THOUSANDS) IN YEARS 1997 1998
----------- --------- ---------

Land and improvements....................................... $ 36 $ 3,448
Building and improvements................................... 15-30 98 4,929
Furniture, fixtures and equipment........................... 3-10 2,186 8,665
Leased property............................................. 3-7 2,425 2,369
--------- ---------
4,745 19,411
Less--accumulated depreciation and amortization............. (2,198) (2,762)
--------- ---------
$ 2,547 $ 16,649
--------- ---------
--------- ---------

Accounts payable and accrued liabilities consisted of the following:

DECEMBER 31,
--------------------

(IN THOUSANDS) 1997 1998
--------- ---------
Accounts payable......................................................... $ 5,533 $ 8,427
Accrued payroll.......................................................... 1,226 986
Other accrued liabilities................................................ 1,364 3,797
--------- ---------
$ 8,123 $ 13,210
--------- ---------
--------- ---------

F-15

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

Supplemental cash flow information is as follows:

YEARS ENDED DECEMBER 31,
-------------------------------

(IN THOUSANDS) 1996 1997 1998
--------- --------- ---------
Supplemental disclosure of cash flow information
Cash paid for interest....................................... $ 577 $ 654 $ 658
--------- --------- ---------
--------- --------- ---------
Cash paid for income taxes................................... $ -- $ -- $ 721
--------- --------- ---------
--------- --------- ---------
Supplemental disclosure of non-cash flow information
Capital lease obligations.................................... $ 946 $ 940 $ 83
--------- --------- ---------
--------- --------- ---------
Common stock portion of Combinations......................... $ -- $ -- $ 68,695
--------- --------- ---------
--------- --------- ---------
Common stock portion of Post-IPO Acquisitions................ $ -- $ -- $ 7,251
--------- --------- ---------
--------- --------- ---------

6. LONG-TERM DEBT

ResortQuest entered into a credit agreement (the "Credit Agreement") as of
May 26, 1998 with NationsBank, N.A. and First Tennessee Bank National
Association, with respect to a $30 million revolving line of credit in
conjunction with the Credit Facility. On September 30, 1998, the Credit Facility
was amended to allow for the ResortQuest acquisition of Abbott Resorts. On
December 7, 1998, the Credit Facility was amended for a second time to increase
the facility to $55 million and added two additional lenders, Societe Generale
and Union Planters Bank, N.A. The Credit Facility may be used for letters of
credit not to exceed $2.5 million, acquisitions, capital expenditures, and for
general corporate purposes. The Credit Agreement requires ResortQuest to comply
with various loan covenants, which include maintenance of certain financial
ratios, restrictions on additional indebtedness and restrictions on liens,
guarantees, advances, capital expenditures, sale of assets and dividends.
Interest on outstanding balances of the Credit Facility is computed at
ResortQuest's election, on the basis of either the Prime Rate or the Eurodollar
Rate plus a margin ranging from 1.25% to 2.00%, depending on certain financial
ratios. Availability fees range from 0.25% to 0.50% per annum depending on
certain financial ratios are payable on the unused portion of the Credit
Facility. At December 31, 1998, borrowings under the Credit Facility totaled
$32.0 million, resulting primarily from the Abbott Resorts acquisition.
ResortQuest is paying a margin of 1.75% and availability fees of 0.375%, which
resulted in interest expense of approximately $517,000 in 1998. The weighted
average interest rate during 1998, based on outstanding ResortQuest Credit
Facility borrowings, including the applicable LIBOR spread, was 7.3%. The Credit
Facility has a three-year term and is secured by substantially all the assets of
ResortQuest and its subsidiaries, including the stock in the Founding Companies
and any future material subsidiaries, as defined. ResortQuest, each Founding
Company and all other current and future material subsidiaries are required to
guarantee repayment of all amounts due under the Credit Facility. At December
31, 1998, ResortQuest was in compliance with applicable loan covenants.

On September 30, 1998, ResortQuest executed a promissory note (the "Note
Agreement") maturing on January 31, 1999 in favor of NationsBank, N.A., with
respect to an additional $5.0 million revolving line of credit. The interest
rate on outstanding balances, the interest payment dates and the terms of
default under the Note Agreement were the same as those provided for in the
Credit Facility. The Note Agreement was secured on the same terms as the Credit
Facility. The Note Agreement was terminated effective December 7, 1998, when
ResortQuest secured additional availability under the

F-16

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

DECEMBER 31, 1998

Credit Facility. ResortQuest also has entered into discussions with NationsBank,
N.A. and certain other lenders to increase the size of the Credit Facility to
provide cash for future acquisitions.

At December 31, 1997 and 1998, long-term debt consisted of the following:

DECEMBER 31,
--------------------

(IN THOUSANDS) 1997 1998
--------- ---------
Credit facility.......................................................... $ -- $ 32,000
Various notes with banks, secured by certain assets, at interest rates
ranging from 7.125% to 9%, due between May 1999 and January 2013....... -- 5,246
Other notes.............................................................. 3,158 361
Long-term capital lease obligations...................................... 1,734 1,725
--------- ---------
Total.................................................................... 4,892 39,332
Less--current maturities................................................. (770) (1,234)
--------- ---------
Total non-current portion................................................ $ 4,122 $ 38,098
--------- ---------
--------- ---------

Annual maturities of long-term debt are: 1999, $1.2 million; 2000, $2.0 million;
2001, $33.7 million; 2002, $1.6 million; 2003, $402,000; and $407,000
thereafter.

7. OPERATING LEASES

ResortQuest has entered into non-cancelable operating leases for equipment,
operating space, office space, hotel properties and individual condominium units
within its managed properties. At December 31, 1998, future minimum lease
commitments under all non-cancelable operating leases are as follows:

(IN THOUSANDS) DECEMBER 31,
-------------

1999............................................................................ $ 1,240
2000............................................................................ 968
2001............................................................................ 881
2002............................................................................ 839
2003............................................................................ 662
Thereafter...................................................................... 1,481
------
$ 6,071
------
------

F-17

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

December 31, 1998

Under terms of the leases, ResortQuest is generally required to pay all
taxes, insurance and maintenance. Rent expense for the years ended December 31,
1996, 1997, and 1998, aggregated approximately $2.6 million, $5.6 million and
$5.0 million, respectively.

In conjunction with the Combinations and Post-IPO Acquisitions, ResortQuest
entered into several lease agreements with certain former owners for the use of
office space and facilities. Lease payments to former owners, who are also
stockholders and directors, during 1996, 1997 and 1998 were approximately
$114,000, $110,000 and $548,000, respectively.

As an accommodation to certain of the managed properties, the Company
assists in obtaining leases of operating equipment. In some instances, this
assistance includes entering into the leases as the technical lessee. The
managed properties perform all obligations under the leases, including the
making of lease payments and the provision of insurance coverage. ResortQuest
remains contingently liable under the leases until completion of the lease
terms. Because ResortQuest undertakes the role of a technical lessee simply as
an accommodation to the managed properties and because the leased equipment is
used only for and by the managed properties, these leases have not been recorded
on the Company's books.

8. COMMITMENTS AND CONTINGENCIES

GUARANTEES

Prior to the Combinations, Aston had guaranteed or co-signed debts of its
former principal stockholder, which primarily relates to mortgage loans on two
hotels managed by Aston. These guarantees were fully collateralized with real
estate, cash or cash equivalents, including shares of Common Stock, pledged
either to the lenders of such debt or Aston to secure such debt. As of December
31, 1998, the former principal stockholder of Aston has removed all guarantees.

Certain of Aston's management agreements contain provisions for guaranteed
levels of returns to owners. These agreements also contain force majeure clauses
to protect the Company from forces or occurrences beyond the control of
management. During 1996, 1997 and 1998, ResortQuest made payments in excess of
the management fees earned on these guaranteed agreements of $116,000, $327,000
and $840,000, respectively.

ACQUISITION INDEMNIFICATION

Subject to certain limitations, pursuant to the Agreement and Plan of
Organization entered into by and between each of the Founding Companies and
ResortQuest (each an "Agreement"), the stockholders of the Founding Companies
have indemnified ResortQuest against losses, claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses as a result
of or arising from (i) any breach of the representations and warranties in the
Agreement and its schedules and certificates by the stockholders of the Founding
Companies, (ii) any breach of any agreement on the part of the stockholders set
forth in the Agreement, (iii) any liability under the 1933 Act, the 1934 Act or
other federal or state law or regulation arising out of or based upon any untrue
statement of a material fact relating solely to the Founding Company or the
stockholders and (iv) certain other identified claims or litigation. In
addition, pursuant to each Agreement and subject to certain limitations,
ResortQuest agreed to indemnify the stockholders against losses, claims,
damages, actions, suits, proceedings, demands, assessments, adjustments, costs
and expenses incurred by the stockholders as a result of or arising from (i) any
breach by ResortQuest or of its representations and warranties in the Agreement
and its schedules and certificates, (ii) any breach of any agreement on the part
of

F-18

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

ResortQuest under this Agreement, (iii) any liability under the 1933 Act, the
1934 Act or other federal or state law or regulation, at common law or
otherwise, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact relating to ResortQuest or any of the other
Founding Companies contained in certain filings with the Securities and Exchange
Commission, or (v) the matters described in the schedules to the Agreement
relating to guarantees.

ResortQuest is not aware of any events that have or could have caused any
party to such indemnification under any of the Agreements during the periods
presented in the accompanying consolidated financial statements.

LITIGATION

ResortQuest and its subsidiaries are involved in various legal actions
arising in the ordinary course of business. Management does not believe that the
outcome of such legal actions will have a materially adverse effect on the
Company's consolidated financial position or results of operations.

INSURANCE

ResortQuest carries a broad range of insurance coverage, including general
and business auto liability, commercial property, workers' compensation and a
general umbrella policy. The Company has not incurred significant claims or
losses on any of its insurance policies during the periods presented in the
accompanying financial statements.

BENEFIT PLANS

As of December 31, 1998, ResortQuest had ten 401(k) profit sharing plans,
which existed prior to the IPO and the acquisition of the Founding Companies or
the Post-IPO Acquisitions. Under the plans currently in place, employees may
defer from 1% to 18% of eligible earnings, company matching contributions range
from 0% to 50% of the first 4% to 6% of employee contributions, and employee
vesting in Company matching contributions varies from immediate vesting in some
plans to seven or more years in other plans. Currently, in the aggregate of all
plans, there are approximately 1,800 eligible employees covered under the plans
and 1,200 active participants.

ResortQuest matching contributions to the plans were $107,000, $184,000 and
$231,000 in 1996, 1997 and 1998, respectively.

ResortQuest is currently in the process of establishing a new 401(k) profit
sharing plan, which will cover all domestic employees. The new 401(k) plan is
expected to be in place in second quarter 1999. Once this plan is in place, all
existing plans will be merged into the new 401(k) plan during 1999.

EMPLOYMENT AGREEMENTS

Effective with the Combinations and the Post-IPO Acquisitions, ResortQuest
entered into employment agreements with all senior corporate officers and
several key employees of the Operating Companies. Among other things, these
agreements allow for severance payments and some include acceleration of stock
option awards upon a change in control of ResortQuest, as defined under the
agreements. The maximum amount of compensation that would be payable under all
agreements if a change in control occurred without prior written notice as of
December 31, 1998, would be approximately $21.4 million.

F-19

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

9. STOCKHOLDERS' EQUITY

COMMON STOCK

On May 26, 1998, ResortQuest issued an aggregate of 9,254,286 shares of
Common Stock in connection with the Combinations (1,708,333 shares to Aston
stockholders and 7,545,953 shares to the remaining stockholders involved with
the Combinations) and 6,670,000 shares of Common Stock in connection with the
IPO. Shares issued in the Offering were sold at a price to the public of $11.00
per share. The net proceeds to ResortQuest from the Offering (after deducting
underwriting discounts, commissions and offering expenses) were approximately
$60.0 million. Subsequent to the IPO, ResortQuest issued 967,641 shares of
Common Stock in connection with the Post-IPO Acquisitions (191,939 shares to
Plantation Resort stockholders, 757,040 shares to Abbott Resorts stockholders
and 18,662 shares to Columbine stockholders). As of December 31, 1998,
ResortQuest had 17,092,768 restated shares of Common Stock issued and
outstanding (13,958,138 shares of Common Stock and 3,134,630 shares of
restricted Common Stock). The Common Stock and restricted Common Stock are
identical except that the holders of restricted Common Stock are only entitled
to one-half of one vote for each share on all matters.

On June 25, 1998, ResortQuest registered 3.0 million shares of Common Stock
with the Securities and Exchange Commission ("SEC") pursuant to a shelf
registration statement ("Shelf"). Common Stock registered under the Shelf is to
be used primarily for future acquisitions. Subsequently, the Shelf was re-filed
with the SEC to include the pro forma impact of the Abbott acquisition, which
was again deemed effective on November 6, 1998. At December 31, 1998, 967,641
shares covered by the Shelf have been issued in connection with the Post-IPO
Acquisitions.

PREFERRED STOCK

ResortQuest's authorized capital includes 10.0 million shares of
undesignated preferred stock with a $0.01 par value.

10. STOCK OPTIONS

In March 1998, ResortQuest's Board of Directors and stockholders approved
the Company's 1998 Long-Term Incentive Plan ("Incentive Plan"). The options vest
annually and ratably over a four-year period from the date of grant and expire
ten years after the grant date. ResortQuest has reserved 2,027,031 shares of
Common Stock for use in connection with the 1998 Long-Term Incentive Plan. In
connection with the IPO, options in the form of non-qualified stock options to
purchase a total of 1,695,000 shares of Common Stock of the Company at $11.00
per share were granted to management of the Founding Companies, corporate
management, certain stockholders, and non-employee directors. Subsequent to the
IPO, 179,351 non-qualified stock options have been granted to new employees at
the then ResortQuest Common Stock market value (ranging from $8.94 to $16.81).
The Incentive Plan also provides for the issuance of stock appreciation rights,
restricted or deferred stock, dividend equivalents, bonus shares and awards in
lieu of Company obligations to pay cash compensation, non-employee directors'
deferred shares, or other awards. The value of the options is based in whole or
in part upon the value of the Common Stock.

ResortQuest applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in accounting for
its stock option plan. Accordingly, no compensation cost has been recognized in
the consolidated statements of income for the Incentive

F-20

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

Plan. In accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation," ResortQuest has estimated the fair value of each option grant
using the Black-Scholes option-pricing model. Had compensation cost for awards
under the Plan been determined based on the fair value at the grant dates,
ResortQuest's net income and earnings per share would have been reduced to the
pro forma amounts indicated below:

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1996 1997 1998
--------- --------- ---------

Net income
As reported.................................................... $ 3,993 $ 3,835 $ 4,812
Pro forma...................................................... 3,993 3,835 4,136
Basic earnings per share
As reported.................................................... $ 1.90 $ 1.83 $ .44
Pro forma...................................................... 1.90 1.83 .38
Diluted earnings per share
As reported.................................................... $ 1.90 $ 1.83 $ .44
Pro forma...................................................... 1.90 1.83 .38

A summary of ResortQuest's stock option transactions, from May 26, 1998
through December 31, 1998, is as follows:

OPTIONS OUTSTANDING
-----------------------

WEIGHTED COMMON
AVERAGE STOCK
EXERCISE AVAILABLE
PRICE NUMBER FOR GRANT
----------- ---------- -----------
IPO - May 26, 1998........................................................... n/a -- 1,910,914
Increased availability common stock issued during the year................... n/a -- 116,117
Options granted.............................................................. $ 10.90 1,874,351 (1,874,351)
----------- ---------- -----------
Balance - December 31, 1998.................................................. $ 10.90 1,874,351 152,680
----------- ---------- -----------
----------- ---------- -----------

The $4.13 weighted average fair value of options granted by ResortQuest
during 1998 was based on the Black-Scholes option-pricing model. Assumptions
included an average risk-free interest rate of 5.5%; an average expected life of
2.6 years; a volatility factor of 54.6%; and no dividends. At December 31, 1998,
there were 1,874,351 options outstanding with an exercise price that ranges from
$8.94 to $16.81 and an average weighted exercise price of $10.90 and a weighted
average remaining contractual life of 9.5 years.

F-21

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

11. INCOME TAXES

Income tax expense attributable to income from continuing operations for the
year ended December 31, 1998 consisted of the following:

(IN THOUSANDS) 1998
---------

Current
Federal............................................................................ $ 909
State.............................................................................. 106
Deferred
Federal............................................................................ 448
State.............................................................................. 55
---------
Total............................................................................ $ 1,518
---------
---------

The difference between the statutory federal income tax rate and the
effective income tax rate expressed as a percentage of income from continuing
operations before income taxes for the year ended December 31, 1998 is as
follows:

1998
---------

Federal statutory rate............................................................... 34.0%
State income taxes, net of federal benefit........................................... 4.2
Goodwill and other permanent items................................................... 44.9
Pre-IPO earnings not taxable......................................................... (52.6)
---------
Effective income tax rate............................................................ 30.5%
---------
---------

As a result of the Combinations and the Post-IPO Acquisitions, the
allocation of the purchase price to the assets and liabilities for financial
reporting purposes significantly exceeds the tax basis carried over from the
predecessor entities. Accordingly, the acquisitions created significant
nondeductible goodwill and other temporary differences. The tax effects of
temporary differences that give rise to significant portions of the deferred tax
assets and liabilities as of December 31, 1998 are as follows:

(IN THOUSANDS) 1998
---------

Deferred tax assets
Claims and other reserves.......................................................... $ 977
Section 481 adjustment: Cash to accrual............................................ 671
State net operating losses......................................................... 310
Other.............................................................................. 45
---------
Total deferred tax assets........................................................ 2,003
---------
Deferred tax liabilities
Basis difference on fixed assets................................................... (342)
Other.............................................................................. (153)
---------
Total deferred tax liabilities................................................... (495)
---------
$ 1,508
---------
---------

F-22

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

12. EARNINGS PER SHARE

ACTUAL RESULTS

Earnings per share included in the consolidated statements of income
includes Aston's results of operations under its historical capital and income
tax structure for all periods prior to the Combinations, and the combined
balances and transactions of ResortQuest and the Founding Companies since May
26, 1998. The shares outstanding for Aston through May 25, 1998, and the shares
outstanding for ResortQuest from May 26, 1998 through December 31, 1998, were
used to calculate the 1998 weighted average shares outstanding. The following
table reflects ResortQuest's weighted average common shares outstanding and the
impact of its primary common share equivalents.

THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
------------------------------------ ------------------------
1996 1997 1998 1998 1999
---------- ---------- ------------ ---------- ------------

(UNAUDITED)
Basic weighted average common shares
outstanding.................................. 2,101,113 2,101,113 10,826,000 2,101,113 17,353,989
Effect of dilutive securities--stock options... -- -- 139,421 -- 432,222
---------- ---------- ------------ ---------- ------------
Diluted weighted average common shares
outstanding.................................. 2,101,113 2,101,113 10,965,421 2,101,113 17,786,211
---------- ---------- ------------ ---------- ------------
---------- ---------- ------------ ---------- ------------

PRO FORMA RESULTS

Pro forma earnings per share included in the consolidated statements of pro
forma income is based on pro forma net income after considering the adjustments
described in Note 1--Pro Forma Financial Information. The pro forma weighted
average common shares for all periods reflect the issuance of Common Stock in
connection with the Combinations, the IPO and to ResortQuest stockholders and
management as though such shares were outstanding for the entire periods. In
addition, the 1998 periods include the impact of Common Stock issued in
connection with the Post-IPO Acquisitions only from their respective acquisition
dates. However, the 1998 calculations also include the dilutive impact of
options outstanding from May 27, 1998 through December 31, 1998. The following
table reflects ResortQuest's pro forma weighted average common shares
outstanding and the impact of its primary common share equivalents.

THREE MONTHS ENDED MARCH
YEAR ENDED 31,
DECEMBER 31, --------------------------
1998 1998 1999
------------ ------------ ------------

(UNAUDITED)
Basic weighted average common shares outstanding... 17,075,661 17,074,106 17,353,989
Effect of dilutive securities--stock options....... 139,421 -- 432,222
------------ ------------ ------------
Diluted weighted average common shares
outstanding...................................... 17,215,082 17,074,106 17,786,211
------------ ------------ ------------
------------ ------------ ------------

F-23

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

13. SEGMENT REPORTING

On January 1, 1998, ResortQuest adopted the provisions of SFAS No. 131
"Disclosures about Segments of an Enterprise and Related Information." Under
SFAS No. 131, ResortQuest has one operating segment, property management, which
is managed as one business unit. The accounting policies of this segment are the
same as those described in the summary of significant accounting policies. The
all other segment includes First Resort and corporate. Approximately 79% of the
all other segment assets represents goodwill recorded for First Resort and
corporate. The following table presents the revenues, operating income and
assets of ResortQuest's reportable segment.

YEARS ENDED DECEMBER 31,
---------------------------------

(IN THOUSANDS) 1996 1997 1998
--------- ---------- ----------
Revenues
Property management...................................... $ 25,670 $ 26,753 $ 53,405
All other................................................ -- -- 1,954
--------- ---------- ----------
$ 25,670 $ 26,753 $ 55,359
--------- ---------- ----------
--------- ---------- ----------
Operating income
Property management...................................... $ 3,970 $ 5,505 $ 7,782
All other................................................ -- -- (2,292)
--------- ---------- ----------
$ 3,970 $ 5,505 $ 5,490
--------- ---------- ----------
--------- ---------- ----------
Assets
Property management...................................... $ 19,072 $ 149,883
All other................................................ -- 38,336
---------- ----------
$ 19,072 $ 188,219
---------- ----------
---------- ----------

14. RELATED-PARTY TRANSACTIONS

ResortQuest has unwritten and written consulting and management agreements
with certain stockholders and directors of the Founding Companies and Post-IPO
Acquisitions. Consulting services include assistance in operations, identifying
acquisitions, and involvement in local and governmental affairs. During 1996,
1997 and 1998, the Company incurred $221,000, $232,000 and $287,000,
respectively, relative to these consulting arrangements.

ResortQuest receives sales commissions for selling properties developed by
certain companies and partnerships owned or co-owned by former owners of the
Founding Companies and Post-IPO Acquisitions. These net commissions approximated
$1.9 million during 1998 and the Company had approximately $414,000 in
receivables at December 31, 1998 from these affiliates.

ResortQuest entered into numerous transactions with the former owner of
Aston ("Former Owner") who is now a director and stockholder of the Company.
ResortQuest provides management and centralized services (cooperative sales and
marketing, reservations, accounting services and other reimbursements) for four
hotels, of which two are owned by the Former Owner and two are managed for an
affiliate of the Former Owner. The management fees charged to these hotels
approximated $501,000, $506,000 and $1.5 million in 1996, 1997 and 1998,
respectively. ResortQuest also paid HCP, Inc., a company that is wholly owned by
the Former Owner, $481,000, $476,000 and $158,000 in

F-24

RESORTQUEST INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

DECEMBER 31, 1998

1996, 1997 and 1998, respectively, for sales representation and related
accounting services. Beginning in 1997, ResortQuest provides administrative
services to AST International LLC, which is controlled by the Former Owner.
Related to these services, the Company recognized $272,000 during 1998 and had
receivables of $420,000 and $208,000 as of December 31, 1997 and 1998,
respectively. ResortQuest also provides certain management and clerical
personnel for a development company owned by the Former Owner. During 1996, 1997
and 1998, ResortQuest incurred $125,000, $126,000 and $4,000, respectively, in
salaries and benefits costs relative to this development company. In return,
ResortQuest receives certain consulting and support services.

ResortQuest provides various management and consulting services for certain
companies and partnerships owned or co-owned by former owners of the Founding
Companies and Post-IPO Acquisitions. During 1998, ResortQuest received
approximately $275,000 for these services.

ResortQuest also manages vacation properties pursuant to its standard
management agreement that are owned or co-owned by certain directors and
employees of the Company.

15. INTERIM FINANCIAL STATEMENTS (UNAUDITED)

The interim financial statements as of March 31, 1999, and for the three
months ended March 31, 1999 and 1998 are unaudited, and certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted. In
the opinion of management, all adjustments, consisting only of normal recurring
adjustments, necessary to fairly present the financial position, results of
operations and cash flows with respect to the interim financial statements, have
been included. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year.

During the three months ended March 31, 1999, ResortQuest executed seven
additional acquisitions, which added 1,599 vacation rental condominiums and
homes to units under management (the "1999 Acquisitions") and are located in one
existing market and six new markets: Ridgepine Vacation Rentals, Inc. in
Sunriver Oregon, effective January 1, 1999; Cove Realty Management Services,
Inc. in Palm Desert, California, effective January 1, 1999; Ryan's Golden Eagle
Management Services, Inc. in Big Sky, Montana, effective January 5, 1999;
Scottsdale Resort Accommodations Inc. in Scottsdale, Arizona, effective February
1, 1999; Worthy Rentals, Inc. in Hilton Head Island, South Carolina, effective
February 1, 1999; High Country in Crested Butte, Colorado, effective March 31,
1999; and Mountain High in Whistler, British Columbia Canada, effective March
31, 1999. The 1999 Acquisitions cost $24.2 million and were financed through a
combination of stock and cash. The 1999 Acquisitions, excluding High Country and
Mountain High, were accounted for under the purchase method of accounting.

F-25

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with sale of the common stock being registered.

SEC Registration Fee..................................................... $ 18,709
New York Stock Exchange Listing Fee...................................... 16,100
NASD Filing Fee.......................................................... 7,230
Accounting Fees and Expenses............................................. 138,000
Printing Costs........................................................... 100,000
Legal Fees and Expenses.................................................. 100,000
Transfer Agent and Registrar Fees and Expenses........................... 10,000
Miscellaneous............................................................ 9,961
---------
Total................................................................ $ 400,000
---------
---------

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Subsection (a) of Section 145 of the General Corporation Law of the State of
Delaware empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.

Subsection (b) of Section 145 empowers a corporation to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been made to be liable
to the corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnify for such expenses which the Court of Chancery or such other court
shall deem proper.

Section 145 further provides (1) that to the extent a director or officer of
a corporation has been successful on the merits or otherwise in the defense of
any action, suit or proceeding referred to in subsections (a) and (b) of Section
145 in the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith; (2) that indemnification provided for
by Section 145 shall not be deemed

II-1

exclusive of any other rights to which the indemnified party may be entitled;
(3) that indemnification provided for by Section 145 shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators; and (4) that the corporation is
empowered to purchase and maintain insurance on behalf of a director or officer
of the corporation against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such whether or not
the corporation would have the power to indemnify him against such liabilities
under Section 145.

As permitted by Section 102(b)(7) of the General Corporation Law of the
State of Delaware, articles seventh and eighth of our certificate of
incorporation, as amended, provides that none of our directors shall be liable
to us or our stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability: (1) for any breach of the director's duty of
loyalty to ResortQuest or our stockholders; (2) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of the
law; (3) under Section 174; or (4) for any transaction from which the director
derived an improper personal benefit, we shall, to the fullest extent permitted
by Section 145, as amended from time to time, indemnify all persons whom we may
indemnify pursuant thereto.

In addition, Article VIII of our bylaws further provides that we shall
indemnify our officers, directors and employees to the fullest extent permitted
by law.

We have entered into indemnification agreements with each of our executive
officers and directors which indemnifies such person to the fullest extent
permitted by our amended and restated certificate of incorporation, our bylaws
and Delaware law. We also have obtained directors and officers liability
insurance.

II-2

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Exhibits

EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------

1.1 -- Form of Underwriting Agreement.

2.1(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., HCP Acquisition Corp., Hotel Corporation of the Pacific, Inc. and Andre S.
Tatibouet.

2.2(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., B&B Acquisition Corp., Brindley Acquisition Corp., B&B On The Beach, Inc.,
Brindley & Brindley Realty and Development, Inc., Douglas R. Brindley and Betty Shotton
Brindley.

2.3(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Coastal Realty Acquisition LLC, Coastal Management Acquisition Corp.,
Coastal Resorts Realty LLC, Coastal Resorts Management, Inc., Joshua M. Freeman, T. Michael
McNally and CMF Coastal Resorts, L.L.C.

2.4(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Collection of Fine Properties, Inc., Ten Mile Holdings, Ltd., Luis Alonso,
Domingo R. Moreira, Brenda M. Lopez Ibanez and Ana Maria Moreira.

2.5(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Houston and O'Leary Company and Heidi O'Leary Houston.

2.6(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Jupiter Acquisition Corp., Jupiter Property Management at Park City, Inc.
and Jon R. Brinton.

2.7(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Maui Acquisition Corp., Maui Condominium and Home Realty, Inc., Daniel C.
Blair and Paul T. Dobson.

2.8(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Maury Acquisition Corp., The Maury People, Inc. and Sharon Benson Doucette.

2.9(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Priscilla Acquisition Corp., Realty Consultants Acquisition Corp., Realty
Consultants, Inc., Howey Acquisition, Inc., Charles O. Howey and Dolores C. Howey.

2.10(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., RPM Acquisition Corp., Resort Property Management, Inc., Daniel L. Meehan,
Kimberlie C. Meehan and Nancy Hess.

II-3

EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------

2.11(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Telluride Acquisition Corp., Telluride Resort Accommodations, Inc., Steven
A. Schein, Michael E. Gardner, Park Brady, Daniel Shaw, Carolyn S. Shaw, Virginia C. Gordon,
Joyce Allred, Ronald D. Allred, A.J. Wells, Forrest Faulconer, Thomas McNamara, Donald J.
Peterson, Nancy McNamara, Charles E. Cobb, Jr., Sue M. Cobb, Stephen A. Martori, Anthony F.
Martori, Arthur John Martori and Alan Mishkin.

2.12(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Trupp Acquisition Corp., Management Acquisition Corp., Trupp-Hodnett
Enterprises, Inc., THE Management Company, Hans F. Trupp, Roy K. Hodnett, Pat Hodnett Cooper and
Austin Trupp.

2.13(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Whistler Holding Corp., Whistler Chalets Ltd. and J. Patrick McCurdy.

2.14(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., FRS Acquisition Corp., First Resort Software, Inc., Thomas A. Leddy, Evan
H. Gull and Daniel Patrick Curry.

2.15(4) -- Stock Purchase Agreement, dated September 11, 1998, by and among ResortQuest International,
Inc., Abbott Realty Services, Inc., Tops'L Sales Group Inc., William W. Abbott, Jr., Stephen J.
Abbott, James R. Steiner, Charles H. Van Driver, Sue C. Van Driver and Angus G. Andrews.

4.1(2) -- Specimen Common Stock Certificate.

4.2(3) -- Form of Restriction and Registration Rights Agreements between ResortQuest and each of Alpine
Consolidated II, LLC, Capstone Partners, LLC, John Przywara, David Marshall, Douglas W. Comfort,
Robert G. Falcone, Wayne Heller, Dwain Wall, Stephen J. Garchik, John Shaw, David Sullivan,
Jeffrey M. Jarvis, Frederick L. Farmer, W. Michael Murphy, Jules S. Sowder, John K. Lines, Brian
S. Sullivan, John D. Sullivan, the Sullivan Grandchildren's Trust, the David L. Levine
Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Whitney Monica Levine,
the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Ross
Michael Levine, the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27,
1998 f/b/o Keith Phillip Levine and the David L. Levine Revocable Trust Under Agreement dated
April 27, 1998.

4.3(5) -- Rights Agreement, dated as of February 25, 1999 between ResortQuest International, Inc. and
American Stock Transfer & Trust Company, as Rights Agent.

*5.1 -- Opinion of Akin, Gump Strauss, Hauer & Feld, L.L.P. as to the legality of the securities being
registered.

10.29 -- Third Amendment to Credit Agreement, dated April 16, 1999.

23.1 -- Consent of Arthur Andersen LLP.

23.2 -- Consent of Arthur Andersen LLP.

23.3 -- Consent of Morrison, Brown, Argiz and Company.

23.4 -- Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P (CONTAINED IN EXHIBIT 5.1).

II-4

EXHIBIT
NUMBER DESCRIPTION
- ----------- ------------------------------------------------------------------------------------------------

24.1 -- Power of Attorney (INCLUDED ON THE SIGNATURE PAGE TO THE REGISTRATION STATEMENT).

27.1 -- Financial Data Schedule for the Period Ended December 31, 1998.

99.2 -- Financial Statements of Howey Acquisition, Inc. (dba Priscilla Murphy Realty, Inc.) as of
December 31, 1997 and May 26, 1998 together with Report of Independent Public Accountants.

99.3 -- Financial Statements of Collection of Fine Properties, Inc. as of December 31, 1997 and May 26,
1998 together with Reports of Independent Public Accountants.

99.4 -- Financial Statements of Coastal Resorts Management, Inc. and Coastal Resorts Realty L.L.C. as of
December 31, 1997 and May 26, 1998 together with Report of Independent Public Accountants.

99.5 -- Financial Statements of First Resort Software, Inc. as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.

99.6 -- Financial Statements of Houston & O'Leary Company as of December 31, 1997 and May 26, 1998
together with Report of Independent Public Accountants.

99.7 -- Financial Statements of Brindley & Brindley (including Brindley Realty and Development, Inc. and
B&B On The Beach, Inc.) as of December 31, 1997 and May 26, 1998 together with Report of
Independent Public Accountants.

99.8 -- Financial Statements of The Maury People, Inc. as of December 31, 1997 and May 26, 1998 together
with Report of Independent Public Accountants.

99.9 -- Financial Statements of Resort Property Management, Inc. as of September 30, 1997 and May 26,
1998 together with Report of Independent Public Accountants.

99.10 -- Financial Statements of Telluride Resort Accommodations, Inc. as of December 31, 1997 and May
26, 1998 together with Report of Independent Public Accountants.

99.11 -- Financial Statements of Trupp-Hodnett Enterprises (including Trupp-Hodnett Enterprises, Inc. and
THE Management Company) as of December 31, 1997 and May 26, 1998 together with Report of
Independent Public Accountants.

- ------------------------

* To be filed by amendment.

(1) Previously filed on March 12, 1998 as an exhibit to ResortQuest's
Registration Statement on Form S-1 (File No. 333-47867) and incorporated
herein by reference.

(2) Previously filed on April 27, 1998 as an exhibit to Amendment No. 1 to
ResortQuest's Registration Statement on Form S-1 (File o. 333-47867) and
incorporated herein by reference.

(3) Previously filed on May 26, 1998 as an exhibit to ResortQuest's Current
Report on Form 8-K (File No. 001-14115) and incorporated herein by
reference.

(4) Previously filed on October 16, 1998 as an exhibit to ResortQuest's
Registration Statement on Form S-1 (File No. 333-56703) and incorporated
herein by reference.

(5) Previously filed on November 16, 1998 as an exhibit to ResortQuest's
Quarterly Report on Form 10-Q for the period ended September 30, 1998 (File
No. 00-14115) and incorporated herein by reference.

(b) Financial Statement Schedules

None

II-5

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes as follows:

(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement at the time it is declared effective.

(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be the initial bona fide
offering thereof.

(3) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

(4) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 14, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by the registrant is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing Form S-3 and has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
Memphis, Tennessee, on the 6th day of May, 1999.

RESORTQUEST INTERNATIONAL, INC.

By: /s/ JEFFERY M. JARVIS
-----------------------------------------
Jeffery M. Jarvis
Chief Financial Officer

POWERS OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David C. Sullivan, David L. Levine, Jeffery M.
Jarvis and John K. Lines, and each of them, with full power to act without the
other, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign this registration statement, any and
all amendments thereto (including post-effective amendments), any subsequent
registration statements pursuant to Rule 462 of the Securities Act of 1933, as
amended, and any amendments thereto and to file the same, with exhibits and
schedules thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing necessary or desirable to be done in and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE CAPACITY DATE
- ------------------------------ --------------------------- -------------------
/s/ DAVID C. SULLIVAN Chairman of the Board and May 6, 1999
- ------------------------------ Chief Executive Officer,
(David C. Sullivan) (Principal Executive
Officer)

/s/ DAVID L. LEVINE President and Chief May 6, 1999
- ------------------------------ Operating Officer,
(David L. Levine) Director

/s/ JEFFERY M. JARVIS Senior Vice President and May 6, 1999
- ------------------------------ Chief Financial Officer
(Jeffery M. Jarvis) (Principal Financial and
Accounting Officer)

/s/ WILLIAM W. ABBOTT, JR. Director May 4, 1999
- ------------------------------
(William W. Abbott, Jr.)

/s/ ELAN J. BLUTINGER Director May 6, 1999
- ------------------------------
(Elan J. Blutinger)

/s/ D. FRASER BULLOCK Director May 6, 1999
- ------------------------------
(D. Fraser Bullock)

II-7

Director May , 1999
- ------------------------------
(Joshua M. Freeman)

Director May , 1999
- ------------------------------
(Heidi O'Leary Houston)

/s/ MICHAEL D. ROSE Director May 6, 1999
- ------------------------------
(Michael D. Rose)

/s/ ANDRE S. TATIBOUET Director May 6, 1999
- ------------------------------
(Andre S. Tatibouet)

/s/ JOSEPH V. VITTORIA Director May 5, 1999
- ------------------------------
(Joseph V. Vittoria)

/s/ THEODORE L. WEISE Director May 6, 1999
- ------------------------------
(Theodore L. Weise)

II-8

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
- --------- -------------------------------------------------------------------------------------------------

1.1 -- Form of Underwriting Agreement.

2.5(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Houston and O'Leary Company and Heidi O'Leary Houston.

EXHIBIT
NUMBER DESCRIPTION
- --------- -------------------------------------------------------------------------------------------------

2.13(1) -- Agreement and Plan of Organization, dated as of March 11, 1998, by and among Vacation Properties
International, Inc., Whistler Holding Corp., Whistler Chalets Ltd. and J. Patrick McCurdy.

2.15(4) -- Stock Purchase Agreement, dated September 11, 1998, by and among ResortQuest International, Inc.,
Abbott Realty Services, Inc., Tops'L Sales Group Inc., William W. Abbott, Jr., Stephen J. Abbott,
James R. Steiner, Charles H. Van Driver, Sue C. Van Driver and Angus G. Andrews.

4.1(2) -- Specimen Common Stock Certificate.

4.2(4) -- Form of Restriction and Registration Rights Agreements between ResortQuest and each of Alpine
Consolidated II, LLC, Capstone Partners, LLC, John Przywara, David Marshall, Douglas W. Comfort,
Robert G. Falcone, Wayne Heller, Dwain Wall, Stephen J. Garchik, John Shaw, David Sullivan,
Jeffrey M. Jarvis, Frederick L. Farmer, W. Michael Murphy, Jules S. Sowder, John K. Lines, Brian
S. Sullivan, John D. Sullivan, the Sullivan Grandchildren's Trust, the David L. Levine
Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Whitney Monica Levine,
the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27, 1998 f/b/o Ross
Michael Levine, the David L. Levine Irrevocable Children's Trust Under Agreement dated April 27,
1998 f/b/o Keith Phillip Levine and the David L. Levine Revocable Trust Under Agreement dated
April 27, 1998.

4.3(7) -- Rights Agreement, dated as of February 25, 1999 between ResortQuest International, Inc. and
American Stock Transfer & Trust Company, as Rights Agent.

*5.1 -- Opinion of Akin, Gump Strauss, Hauer & Feld, L.L.P. as to the legality of the securities being
registered.

10.29 -- Third Amendment to Credit Agreement, dated April 16, 1999