Supertel Hospitality, Inc. Announces Agreement to Purchase Seven Hotels in Kentucky

NORFOLK, NE -- (MARKET WIRE) -- January 29, 2007 -- Supertel Hospitality, Inc. (NASDAQ: SPPR), a self-administered real estate investment trust, announced that its operating partnership has entered into a definitive agreement to purchase seven hotels from Musselman Hotels II, LLC. The hotels are located in Ashland, KY (Days Inn); Brooks, KY (Comfort Inn); Cave City, KY (Quality Inn); Glasgow, KY (Comfort Inn); Glasgow, KY (Days Inn); Louisville, KY (Comfort Suites); and Louisville, KY (Sleep Inn).

The purchase price for the hotels is $14.4 million in cash, subject to adjustment, which Supertel intends to fund from existing credit facilities and new borrowings to be negotiated. The closing of the transaction is expected to occur in July, subject to customary closing conditions.

"These seven hotels, with a total of 486 rooms, present a great opportunity for Supertel to add to our presence in Kentucky," said Paul J. Schulte, chairman, president and chief executive officer of Supertel Hospitality, Inc. "This acquisition will result in Supertel owning 10 hotels in Kentucky, which will enhance our objective to provide clean, friendly and affordable options for the business and leisure traveler."

"When selling seven properties, we needed to make sure we found a company that has the means and the ability to finalize the deal within the guidelines of the agreement. Our past dealings with Supertel indicated they were the right buyer for our properties. We look forward to working with them over these next few months and proceeding on to closing," said Chester Musselman, managing member of Musselman Hotels II, LLC.

Supertel Hospitality, Inc. owns 93 hotels with 7,245 rooms in 22 states. Supertel's hotel portfolio includes Super 8, Comfort Inn/Comfort Suites, Hampton Inn, Holiday Inn Express, Suites at Key Largo, Days Inn, Ramada Limited, Guest House Inn, Sleep Inn, Supertel Inn and Savannah Suites. This diversity enables Supertel to participate in the best practices of each of these respected hospitality partners. Supertel specializes in limited service hotels.

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These risks are discussed in the Company's filings with the Securities and Exchange Commission.

Although the Company believes the expectations reflected in these forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. The forward-looking statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Contact Information: CONTACT: Supertel Hospitality, Inc. Donavon A. Heimes 402.371.2520