Holloway Lodging : Reports 2013 Annual Results

FOR IMMEDIATE RELEASE

Not for distribution on U.S. newswire services or for dissemination in the United States

HOLLOWAY LODGING CORPORATION REPORTS STRONG 2013 YEAR END RESULTS AND DECLARES QUARTERLY DIVIDEND

March 3, 2014 - Halifax, Nova Scotia - Holloway Lodging Corporation (TSX: HLC) ("Holloway") today announced its financial results for the year ended December 31, 2013.

2013 Highlights

In 2013, Holloway increased its revenue, net operating income, operating margins and cash flow and recorded its best operating results since before the financial crisis:
• Increased revenue from $58.4mn to $60.0mn or 2.7%
• Increased hotel operating margins from 34.3% to 35.9%
• Increased funds from operations from $8.6mn to $11.6mn or 35.4%
The Company also completed several capital projects at our hotels, including the addition of eight rooms at the Super 8® hotel in Fort St. John, BC and the branding of the Northwest Inn in Slave Lake, AB to a Travelodge® hotel.
In addition, Holloway continued to return capital to shareholders. In 2013, Holloway paid $2.5mn in dividends, repurchased $2.6mn of its common shares and repaid $4.6mn in debt. In total, Holloway returned $9.7mn to shareholders in 2013, representing 14% of Holloway's market capitalization at year- end.

Dividend Declaration

On March 3, 2014, the Board of Directors declared a quarterly dividend of $0.035 per share, representing an annual dividend of $0.14 per share. The dividend will be payable on April 15, 2014 to shareholders of record on March 31, 2014.

Outlook

Holloway expects to have another positive year in 2014. Western Canada remains very busy with oil, gas, forestry and infrastructure development and several of the markets the Company is involved in are evolving from smaller tertiary markets to larger secondary cities. This is a positive development for Northern Alberta and British Columbia as well as for Holloway. Holloway is targeting higher rates in these markets while maintaining or growing occupancy. In Eastern Canada and the U.S., stable operating results are expected.
A significant area of focus for Holloway in 2014 will be acquiring additional hotels. In the last few years we have been patient, waiting for the right property at the right price. We do not intend to change that approach. To that end, in February 2014, Holloway entered into a credit agreement for a $17.0 million term loan which can be used to fund hotel acquisitions. As always, we will compare the returns we can generate on hotel acquisitions to other uses of our capital, including repurchasing our own shares. We will also look to opportunistically reduce our existing mortgage debt.

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Operating Results

The following table provides a summary of the operating results for the three months and years ended
December 31, 2013 and 2012.

Three months ended Years ended (in $000's except number of shares and per share results) Dec 31, 2013 Dec 31, 2012 Dec 31, 2013 Dec 31, 2012
Hotel revenues Hotel expenses	14,338 9,458	13,276 8,882	59,957 38,447	58,373 38,328
Hotel operating income before depreciation and amortization Hotel depreciation and amortization	4,880 2,229	4,394 1,961	21,510 8,993	20,045 7,845
Income from hotel operations Other expenses Reversal of impairment of hotel properties, net	2,651 2,126 (3,450)	2,433 2,309 (12,993)	12,517 9,710 (3,450)	12,200 5,457 (12,993)
Income before income taxes Provision for income taxes	3,975 1,113	13,117 -	6,257 1,787	19,736 -
Net income for the periods	2,862	13,117	4,470	19,736
Weighted average basic and diluted shares outstanding Basic and diluted income per share	17,934,404 0.16	18,709,258 0.70	18,137,856 0.25	17,727,238 1.11
Reconciliation to funds from operations (FFO) Add / (deduct): Depreciation and amortization on real property Provision for income taxes Loss (gain) on disposal of hotel properties and equipment Reversal of impairment of hotel properties, net (Gain) loss on disposal of minority interest investments in hotel properties Gain on acquisition of subsidiary	2,218 1,113 19 (3,450) (33) -	1,962 - 6 (12,993) - (433)	8,913 1,787 15 (3,450) (129) -	7,745 - (5,588) (12,993) 101 (433)
FFO - basic and diluted Basic and diluted FFO per share	2,729 0.15	1,659 0.09	11,606 0.64	8,568 0.48
Reconciliation to adjusted funds from operations (AFFO) Add/(deduct): Depreciation and amortization - corporate and other assets Accretion of mortgages, loan due to a related party, convertible debentures and deferred financing fees Fair value adjustment of Class B LP units and derivative liability Share-based compensation FF&E reserve	37 42 - 75 (438)	1 40 (5) 102 (406)	123 207 - 378 (1,831)	105 739 21 503 (1,780)
AFFO - basic and diluted Basic and diluted AFFO per share Dividends paid per share	2,445 0.14 0.035	1,391 0.07 0.035	10,483 0.58 0.14	8,156 0.46 0.065

All amounts are in Canadian dollars unless otherwise indicated. Readers should refer to Holloway's audited consolidated financial statements as at December 31, 2013 and its management discussion and analysis which are available on Holloway's website at www.hlcorp.caand on the SEDAR website at www.sedar.com.
Holloway Lodging Corporation
Holloway is a real estate corporation focused on acquiring, owning and operating select and limited service lodging properties and a small complement of full service hotels primarily in secondary, tertiary and suburban markets. Holloway currently owns 18 hotels with 1,798 rooms. Holloway's shares trade on the Toronto Stock Exchange under the symbol HLC.

For further information please contact Michael Rapps, Chairman, at [phone] or Jane Rafuse, Chief Financial

Officer, at [phone].

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This press release contains forward-lookìng infonnation within the meaning of applìcable secunt1es laws. Forward-lookìng information may relate to Holloway's jùture outlook and anticìpated events or results and may include statements regarding Holloway's fitture financìal position, business strategy, financìal results, plans and objectives In some cases, forward-lookìng information can be identìfied by terms such as "may", "will", "should", "expect", "plan", "anticipate", "belìeve", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward lookìng-information is subject to certainfactors, including rìsks and uncertainties, that could cause actual results to differ materìally from what Holloway currently expects and there can be no assurance that such statements wìll prove to be accurate. Some of these risks and uncertainties are descrìbed under "Risk Factors" in Holloway 's Annuallnformation Form ("AIF"), dated March 3, 2014 which is avaìlable at www.sedar.c o m. Holloway does not intend to update or revise any such forward-lookìng information should its assumptions and estimates change.

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