RHC The Real Hotel

    THE REAL HOTEL COMPANY PLC                           

                           ("THE COMPANY" OR "RHC")                            

19TH DECEMBER 2007

**Embargoed 7am**

      THE REAL HOTEL COMPANY EXITS FRANCHISING & PROVIDES TRADING UPDATE       

Branded hotel operator The Real Hotel Company plc, today announces that it has
entered into an agreement to exit its UK Master Franchise Agreement and issues
a trading update for its full year to 31st December 2007, for which the results
will be announced in March 2008.

Termination of UK Master Franchise Agreement

The Company announces today, the transfer of its UK franchising operations,
covering the Comfort, Sleep, Quality and Clarion brands, to Choice Hotels
International ("Choice") on 31st January 2008. This follows on from the
announcement on 31st October 2006 when RHC terminated its Master Franchise
agreement with Choice covering operations in Continental Europe.

On 31st January 2008, the UK Master Franchise Agreement between the Real Hotel
Company plc and Choice will be terminated and the sale and servicing of
franchise agreements will be assigned to a Choice subsidiary. Thereafter RHC
will no longer sell or service franchise agreements. The staff involved in the
UK franchise business will TUPE transfer to the Choice subsidiary in the UK.
RHC will, however, remain a Choice franchisee, operating 30 hotels under the
Comfort, Quality and Clarion brands in the UK Proceeds from the transaction,
estimated at �0.3m, will be used to fund general working capital.

Trading Update

The board expects RHC's trading results to show an improvement on the prior
year trading but to be quite some way below the board's previous expectations.

Whilst the benefits of RHC's recent investment programme continue to flow
through to operating results and the premium limited service hotels are
performing well with four new properties being opened this year, however, RHC's
UK mid-market hotels have underperformed.

The Company has seen midweek corporate business in its mid-market hotels
perform well during the year, largely driven by its own sales and marketing
efforts, leisure business has been disappointing in the second half of the
year, impacted by more cautious consumer demand. London has shown very strong
growth throughout the year; the regions have fared less well.

The performance of RHC's premium limited service hotels underpins the Company's
strategy of focusing on this product and its exit from the Choice UK Master
Franchise Agreement.

The Company has identified under-performing mid-market hotels that it will seek
to sell, with two such hotels forecast to be sold by the year end. Major
initiatives announced last year are all largely, or completely, implemented.

Consolidated European hotel operations and the New Connaught Rooms have
performed well.

Launch of New Brand

The exit from the franchising business, which occurs on 31st January 2008,
allows RHC to concentrate its resources on operating hotels in the premium
limited service sector.

The Company is in the final stages of an exciting move to launch a new brand
-purple hotels in the premium limited service sector, and further details will
be announced in January. The first two hotels to carry the new brand are at
Braintree, Essex (opened November 2007) and Glasgow Airport (to be opened in
January 2008). A further nine hotels, currently operating under the Sleep Inn
banner will convert to the new brand on 1st February 2008. At this point purple
will operate 976 bedrooms, with new openings in Sheffield & Ipswich planned for
2008 and a pipeline of more than 2000 rooms under offer.

Commenting on today's announcement, chairman Peter Catesby said: "The launch of
our new brand in January and our exit from franchising represent a major step
in the growth plans of the Real Hotel Company as we focus on high margin, high
growth sectors and exit our legacy businesses.

"We are obviously disappointed that sales performance was not as strong as we
had forecast for 2007. This has served to reinforce our decision to focus on
the premium limited service sector, and to exit the UK Master Franchise
Agreement with Choice. Whilst we will remain a large franchisee of Choice for
our mid market brands, selling & servicing franchises on behalf of a third
party no longer fits with our business strategy."

                                   - ENDS -                                    

For further information please contact:

The Real Hotel Company plc Tel: 020 8233 2001

Michael Prager, Chief Executive

Paul Mitchell, Finance Director

Waughton Tel: 020 7796 9999

Robin Hepburn

About The Real Hotel Company plc

The Real Hotel Company plc was renamed on July 5th 2007, from what was CHE
Hotel Group Plc. 'Real' is what we want to stand for in the hospitality
business. Real quality and Real hotels staffed by Real people.

The Real Hotel Company plc own, lease and manage 65 hotels throughout the UK
and France, Germany and Belgium. It also operates London's New Connaught Rooms,
one of the capital's largest multi-function conference and banqueting venues.

The Real Hotel Company management team has considerable experience in the hotel
sector. Michael Prager was Managing Director of Utell International and held
senior positions at Intercontinental, Radisson and Sheraton hotel groups. Paul
Mitchell was formerly Vice President of Financial Planning and Control for
Europe, Middle East and Africa at Intercontinental Hotel Group in addition to
holding senior finance positions in Granada, Forte and Allied Lyons



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