Morgans to Manage the First Mondrian Hotel in Europe

360-Room Hotel to Open at Sea Containers on London's River Thames

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. December 05, 2011

NEW YORK - December 2, 2011 - Morgans Hotel Group Co. (NASDAQ: MHGC) ("Morgans" or the "Company") today announced that it has entered into a hotel management agreement for an approximately 360-room Mondrian-branded hotel to be located at Sea Containers on the South Bank of the River Thames in London. This hotel is expected to be the sixth Mondrian hotel in the expansion of the Company's iconic brand and the first Mondrian hotel in Europe.

Upon completion and opening of the hotel, Morgans will operate the hotel pursuant to a 25-year management agreement, with two 10-year extension options. The hotel is scheduled to open in early 2014.

"We are very excited to announce our first Mondrian hotel in Europe," said Michael Gross, Chief Executive Officer of Morgans Hotel Group. "Sea Containers is an exceptional property in a key gateway city that will allow us to serve our guests for business and leisure throughout the year. Morgans was specifically selected by the property's owner to develop and manage Mondrian London, which is a testament to the appeal of our lifestyle management and the strength of the Mondrian brand. This is the third new management agreement for a Mondrian-branded hotel that we have announced this year. We believe the Mondrian brand has unique appeal and significant potential for global expansion."

Jonathan Ofer, Managing Director of the Deerbrook Group, the adviser to the owner said, "We conducted a thorough operator selection process and believe Morgans under the Mondrian brand will create a special destination at Sea Containers."

Sea Containers is an approximately 412,000 square foot office building centrally located on the South Bank of the River Thames, close to many cultural attractions as well as business hubs. The owner of Sea Containers intends to renovate the building into a mixed-use development to include a 360-room Mondrian hotel and 280,000 square feet of prime office space. The hotel will have an innovative restaurant and both a ground floor bar and rooftop bar, specially conceived by The Light Group, one of the world's leading food and beverage operators. Morgans intends to invest approximately 9 million pounds, or approximately $15 million, of key money into the project.

Earlier in the year, the Company announced it has entered into hotel management agreements for Mondrian-branded hotels in Doha, Qatar and in Nassau, The Bahamas.

About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles, South Beach and New York, Clift in San Francisco, Ames in Boston, Sanderson and St Martins Lane in London, and a hotel in Playa del Carmen, Mexico. Morgans also owns, or has ownership interests in, several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion including a Delano in Cabo San Lucas, Mexico, a Delano in Turkey, a Mondrian in Doha, Qatar, and a Mondrian in Nassau, The Bahamas, and a hotel in New York to be branded with one of MHG's existing brands. Morgans also owns a 90% controlling interest in The Light Group, a leading lifestyle food and beverage company. For more information please visit www.morganshotelgroup.com.

Forward-Looking and Cautionary Statements
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs and prediction of certain future other events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" "believe," "project," or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results or other future events to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in Morgans' Annual Report on Form 10-K for the fiscal year ended December 31, 2010, and other documents filed by Morgans with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and Morgans assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.