Morgans to Open Second Hudson Branded Property

234-Room Hudson Outpost at Great Scotland Yard in London

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. July 26, 2012

NEW YORK, July 26, 2012 - Morgans Hotel Group is excited to announce that its newest Hudson property will be located on Great Scotland Yard in St. James's, London. The Hudson London deal was officially announced by the boutique hospitality management company in June, but the location of the project has been unconfirmed until today. Following Hudson's flagship hotel in New York, Hudson London at Great Scotland Yard marks the beginning of Morgans Hotel Group's plan to introduce the brand into gateway markets around the globe.

Located in the heart of Westminster, Hudson London, slated to open early 2015, will be just moments away from London's most iconic landmarks including Westminster Abbey, Buckingham Palace, Trafalgar Square and Big Ben.

The 234-room boutique property is situated in a 102-year-old Edwardian building, formerly inhabited by the Ministry of Defense. The building was used for recruitment of the British armed forces until it was converted into a public records library in the 1980's. The elegant historic building serves as an exciting and unexpected backdrop for the newest Hudson property, which, following its New York predecessor, will emphasize public spaces as a forum for social exchange. Inspired by a blend of old and new, Hudson will bring a distinctive new offering to London, fusing a unique playfulness with cutting-edge style and impeccable service.

Applying Hudson's trailblazing concept of lobby as social hub, the pulse of Hudson London will beat through the hotel's public spaces. The property will feature a brand new restaurant on the ground floor, a 40-seat library lounge and flexible boardroom space that can be used for business meetings as well as private events.

Hudson London commences a partnership between Morgans Hotel Group and hotel owners Sansar Investments Ltd. "We are excited to work with Morgans Hotel Group and their team to bring the second Hudson to the London market," said Raman Thukral, Director of Sansar Investments. "We could not envision a better partner to collaborate with, and are already exploring future opportunities with Morgans Hotel Group's development team."

Westminster City Council planning committee resolved, earlier this month, to grant planning consent for the hotel, which is being purchased from the Crown Estate.

Hudson London at Great Scotland Yard is Morgans Hotel Group's fourth property in London, joining renowned Sanderson and St Martins Lane properties, and Mondrian London at Sea Containers House, set to open its doors early 2014.

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 Hotel Group has ownership interests or owns several of these hotels. Morgans Hotel Group has other property transactions in various stages of completion, including Delano and Mondrian in Marrakech, Morocco; Hudson and Mondrian in London, England; Delano in Cesme, Turkey; and Mondrian properties in Istanbul, Turkey; Doha, Qatar and Nassau, The Bahamas. Morgans Hotel Group 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, 2011, 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.

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