Equity Inns Expects Fourth Quarter Adjusted Funds from Operations to Exceed Expectations; Fourth Quarter AFFO Expected to Be in

Equity Inns, Inc. (NYSE: ENN), the third largest hotel
real estate investment trust (REIT), today announced that the Company
expects adjusted funds from operations (AFFO) for the fourth quarter
2005 to be in the range of $0.23 per share to $0.25 per share versus
previous expectations of $0.17 per share to $0.19 per share. The
Company expects net income applicable to common shareholders for the
fourth quarter 2005 to be in the range of $0.07 per share to $0.09 per
share. The better than expected results are due primarily to the
Company's quarterly revenue per available room (RevPAR) exceeding
initial forecasts.
   A fourth quarter 2005 RevPAR increase in excess of 8.0% has
surpassed the Company's prior forecasts due, in part, to higher than
anticipated occupancies in the Company's Florida and Gulf Coast hotels
following Hurricanes Katrina and Wilma. The Company estimates
approximately $0.03 per share in AFFO is attributable to positive
business related to the effects from the hurricane season. In
addition, higher than anticipated demand across the balance of the
Company's portfolio enabled the Company to significantly exceed
earlier RevPAR projections.
   Howard Silver, President and Chief Executive Officer commented,
"We entered the quarter mindful of the exceptionally strong
year-over-year RevPAR growth that our Florida portfolio exhibited in
the fourth quarter 2004 and the impact of fewer available rooms due to
the renovation of four Northeast Residence Inn assets. We are pleased
that market operating dynamics afforded the Company growth in
occupancy and the ability to garner an increase in average daily rate
across our portfolio. However, we do not believe that incremental
increased occupancy for several of our hotels will be sustainable in
2006."
   The Company anticipates providing a full report of its fourth
quarter 2005 earnings on February 16, 2006.
   Certain matters discussed in this press release which are not
historical facts are "forward-looking statements" within the meaning
of the federal securities laws and involve risks and uncertainties.
The words "may," "plan," "project," "anticipate," "believe,"
"estimate," "forecast, "expect," "intend," "will," and similar terms
are intended to identify forward-looking statements, which include,
without limitation, statements concerning our outlook for the hotel
industry, acquisition and disposition plans for our hotels and
assumptions and forecasts of future results for fiscal year 2005.
Forward-looking statements are not guarantees of future performance
and involve numerous risks and uncertainties which may cause our
actual financial condition, results of operations and performance to
be materially different from the results of expectations expressed or
implied by such statements. General economic conditions, future acts
of terrorism or war, risks associated with the hotel and hospitality
business, the availability of capital, risks associated with our debt
financing, hotel operating risks and numerous other factors, may
affect our future results and performance and achievements. These
risks and uncertainties are described in greater detail in our Current
Report on Form 8-K filed on March 16, 2005 and our other periodic
filings with the United States Securities and Exchange Commission
(SEC). We undertake no obligation and do not intend to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Although we believe our
current expectations to be based upon reasonable assumptions, we can
give no assurance that our expectations will be attained or that
actual results will not differ materially.

   Notes to Financial Information

   The Company operates as a self-managed and self-administered real
estate investment trust, or REIT. Readers are encouraged to find
further detail regarding Equity Inns organizational structure in its
annual report on Form 10-K for the year ended December 31, 2004 as
filed with the SEC.

   Non-GAAP Financial Measures

   Included in this press release are certain "non-GAAP financial
measures," which are measures of the Company's historical or future
financial performance that are different from measures calculated and
presented in accordance with generally accepted accounting principles,
or GAAP, within the meaning of applicable SEC rules. These include:
(i) Gross Operating Profit Margin, (ii) Funds From Operations, (iii)
Adjusted Funds From Operations, (iv) Adjusted EBITDA, (v) Cash
Available for Distribution (CAD), (vi) CAD Payout Ratio, (vii)
Capitalization Rate (viii) Leverage Ratio, and (ix) Hotel Operating
Statistics. The following discussion defines these terms, which the
Company believes can be useful measures of its performance.

   Funds from Operations

   The National Association of Real Estate Investment Trusts, or
NAREIT, defines funds from operations, or FFO, as net income (loss)
applicable to common shareholders (computed in accordance with
generally accepted accounting principles), excluding gains (or losses)
from sales of property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures.. FFO
is presented on a per share basis after making adjustments for the
effect of dilutive securities. Equity Inns uses FFO per share as a
measure of performance to adjust for certain non-cash expenses such as
depreciation and amortization because historical cost accounting for
real estate assets implicitly assumes that the value of real estate
assets diminishes predictably over time. FFO is also used by
management in the annual budget process.

   Adjusted Funds From Operations

   Equity Inns further adjusts FFO for losses on impairment of
hotels, prepayment penalties on extinguishment of debt and other
non-cash or unusual items. We refer to this as adjusted funds from
operations, or AFFO. The Company's computation of AFFO and AFFO per
diluted share is not comparable to the NAREIT definition of FFO or to
similar measures reported by other REITs, but the Company believes it
is an appropriate measure for this Company. The Company uses AFFO
because it believes that this measure provides investors a useful
indicator of the operating performance of the Company's hotels by
adjusting for the effects of certain non-cash or non-recurring items
arising from the Company's financing activities, impairment charges on
hotels held for sale and other areas. In addition to being used by
management in the annual budget process, AFFO per share is also used
by the Compensation Committee of the Board of Directors as one of the
criteria for performance-based compensation.
   Because real estate values have historically risen or fallen with
market conditions, many industry investors have considered
presentation of operating results for real estate companies that use
historical cost accounting to be less informative. NAREIT adopted the
definition of FFO in order to promote an industry-wide standard
measure of REIT operating performance. Accordingly, as a member of
NAREIT, Equity Inns adopted FFO as a measure to evaluate performance
and facilitate comparisons between the Company and other REITs,
although FFO and FFO per share may not be comparable to those measures
or similarly titled measures as reported by other companies.

   About Equity Inns

   Equity Inns, Inc. is a self-advised REIT that focuses on the
upscale extended stay, all-suite and midscale limited-service segments
of the hotel industry. The Company, which ranks as the third largest
hotel REIT based on number of hotels, currently owns 123 hotels with
14,788 rooms located in 36 states. For more information about Equity
Inns, visit the Company's Web site at www.equityinns.com.