Exhibit 99.1

Morgans Hotel Group Co.
Unaudited Pro Forma Financial Information

The accompanying Unaudited Pro Forma Consolidated Financial Statements are presented to reflect that on May 23, 2011, Royalton LLC, a subsidiary of Morgans Hotel Group Co. (the “Company”), completed the sale of Royalton for $88.2 million to Royalton 44 Hotel, L.L.C., an affiliate of FelCor Lodging Trust, Incorporated (“FelCor”), and Morgans Holdings LLC, a subsidiary of the Company, completed the sale of Morgans for $51.8 million to Madison 237 Hotel, L.L.C., an affiliate of FelCor, pursuant to purchase and sale agreements entered into on April 2, 2011. The Company will continue to operate the hotels under 15-year management agreements with one 10-year extension option.

The Unaudited Pro Forma Consolidated Financial Statements include adjustments to reflect the effects of the sale of Royalton and Morgans and the repayment of the outstanding debt on the Company’s revolving credit facility, which was collateralized by Royalton and Morgans, along with Delano, and which terminated upon the sale of these two properties securing the facility. The Unaudited Pro Forma Consolidated Statements of Operations for the fiscal year ended December 31, 2010 and three months ended March 31, 2011 are presented as if the sales were completed as of January 1, 2010 and January 1, 2011, respectively. The Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2011 is presented as if the sales were consummated at March 31, 2011. The accompanying Unaudited Pro Forma Consolidated Financial Statements should be read in conjunction with the Company’s historical consolidated financial statements and related notes thereto, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2011.

Pro forma information is intended to provide investors with information about the continuing impact of a transaction by showing how a specific transaction might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. The adjustments made to historical financial information give effect to events that are directly attributable to the sales, are factually supportable, and expected to have a continuing impact. The Unaudited Pro Forma Consolidated Financial Statements are prepared in accordance with Article 11 of Regulation S-X.

The Unaudited Pro Forma Consolidated Financial Statements set forth below are not fact and there can be no assurance that our actual results will not differ significantly from those set forth below or that the impact of the sales will not differ significantly from those presented below. Accordingly, the Unaudited Pro Forma Consolidated Financial Statements are presented for illustrative purposes only and do not purport to represent, and are not necessarily indicative of, what our actual financial position and results of operations would have been had the sales occurred on the dates indicated, nor are they indicative of our future financial position or results of operations. Readers are cautioned not to place undue reliance on such information and the Company makes no representations regarding the information set forth below or its ultimate performance compared to it.

Morgans Hotel Group Co.

Unaudited Pro Forma Consolidated Balance Sheet

(in thousands, except per share data)

																						Revolving Credit
		Historical as of				Royalton Sale								Morgans Sale								Facility Repayment				Pro Forma as of
		March 31, 2011				(A)								(B)								(C)				March 31, 2011
ASSETS
Property and equipment, net		$	286,351			$	—							$	—							$	—			$	286,351
Goodwill			53,691				—								—								—				53,691
Investments in and advances to unconsolidated joint ventures			20,328				—								—								—				20,328
Assets held for sale, net			190,481				(71,785	)							(36,605	)							—				82,091
Cash and cash equivalents			5,962				83,790				D				49,210				D				(37,658	)			101,304
Restricted cash			29,883				—								—								—				29,883
Accounts receivable, net			5,318				—								—								—				5,318
Related party receivables			3,871				—								—								—				3,871
Prepaid expenses and other assets			5,872				—								—								—				5,872
Deferred tax asset, net			79,793				—				E				—				E				—				79,793
Other, net			11,210				—								—								(1,778	)			9,432
TOTAL ASSETS		$	692,760			$	12,005							$	12,605							$	(39,436	)		$	677,934
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Debt and capital lease obligations		$	571,471			$	—							$	—							$	(37,658	)		$	533,813
Accounts payable and accrued liabilities			26,572				—								—								—				26,572
Debt obligation, accounts payable and accrued liabilities of assets held for sale			108,297				(1,783	)							(778	)							—				105,736
Distributions and losses in excess of investment in unconsolidated joint ventures			1,728				—								—								—				1,728
Deferred gain on sale of Royalton			—				13,546				F				—								—				13,546
Deferred gain on sale of Morgans			—				—								13,769				F				—				13,769
Other liabilities			13,866				—								—								—				13,866
Total Liabilities			721,934				11,763								12,991								(37,658	)			709,030
Commitments and contingencies
Preferred securities, $.01 par value; liquidation preference $1,000 per share, 75,000 shares authorized and issued at March 31, 2011			51,806				—								—								—				51,806
Common stock, $.01 par value; 200,000,000 shares authorized; 36,277,495 shares issued at March 31, 2011			363				—								—								—				363
Additional paid-in capital			301,541				—								—								—				301,541
Treasury stock, at cost, 5,965,992 shares of common stock at March 31, 2011			(92,688	)			—								—								—				(92,688	)
Accumulated comprehensive loss			(1,434	)			—								—								—				(1,434	)
Accumulated deficit			(298,601	)			242								(386	)							(1,778	)			(300,523	)
Total Morgans Hotel Group Co. stockholders’ (deficit) equity			(39,013	)			242								(386	)							(1,778	)			(40,935	)
Noncontrolling interest			9,839				—								—								—				9,839
Total (deficit) equity			(29,174	)			242								(386	)							(1,778	)			(31,096	)
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY		$	692,760			$	12,005							$	12,605							$	(39,436	)		$	677,934

See accompanying notes to these unaudited pro forma consolidated financial statements.

Morgans Hotel Group Co.
Notes to Unaudited Pro Forma Consolidated Balance Sheet

The Unaudited Pro Forma Consolidated Balance Sheet reflects the effects of the sale of Royalton and Morgans and the repayment of the outstanding debt on the Company’s revolving credit facility as if these transactions had occurred on March 31, 2011. The Unaudited Pro Forma Consolidated Balance sheet:

(A) Reflects the disposition of Royalton and removal of the book value of the hotel property and equipment, goodwill allocated to the property, and other related assets and related liabilities, which have been classified as held for sale, associated with the hotel as a result of the disposition.

(B) Reflects the disposition of Morgans and removal of the book value of the hotel property and equipment, goodwill allocated to the property, and other related assets and related liabilities, which have been classified as held for sale, associated with the hotel as a result of the disposition.

(C) Reflects the repayment of the outstanding debt on the Company’s revolving credit facility with a portion of the proceeds received from the sale of the hotels and the write-off of deferred financing fees related to the debt. Royalton and Morgans, along with Delano, were collateral for the Company’s revolving credit facility, which terminated upon the sale of these two properties securing the facility.

(D) Reflects the cash proceeds from the sale of Royalton and Morgans, after estimated closing costs of $4.4 million on the sale of Royalton and $2.6 million on the sale of Morgans, or 5.0%, of the $88.2 million and $51.8 million, respectively, sales price.

(E) The Company expects to record a tax gain on the sale of Royalton and Morgans which will be offset by tax net operating loss carry forwards that the Company has recorded. The Company estimates that the tax gain will be approximately $80 million and that the projected tax savings will be approximately $34 million based on a corporate tax rate of approximately 41%. As a result, the balance of the deferred tax asset, net, will decrease in future periods after the close of the transactions.

(F) Reflects the book value gain from the sale of Royalton and Morgans. The Company will continue to manage the hotels pursuant to 15-year management agreements with one 10-year extension option. This gain will be amortized over the life of the management contract.

Morgans Hotel Group Co.
Unaudited Pro Forma Consolidated Statements of Operations

For the Three Months Ended March 31, 2011

(in thousands, except per share data)

						Disposition of
		Historical for the				Royalton-																Revolving Credit				Pro Forma for
		three months				Operating				Disposition of				Management Fees				Amortization of				Facility				the three months
		ended March 31,				Results				Morgans Operating				Earned				Deferred Gain				Repayment				ended
		2011				(A)				Results (B)				(C)				(D)				(E)				March 31, 2011
Revenues:
Rooms		$	31,034			$	(3,087	)		$	(1,905	)		$	—			$	—			$	—			$	26,042
Food and beverage			18,030				(1,144	)			(81	)			—				—				—				16,805
Other hotel operating			2,016				(105	)			(68	)			—				—				—				1,843
Total hotel revenues			51,080				(4,336	)			(2,054	)			—				—				—				44,690
Management fee — related party and other income			3,324				—				—				159				—				—				3,483
Total revenues			54,404				(4,336	)			(2,054	)			159				—				—				48,173
Operating Costs and Expenses:
Rooms			11,174				(1,485	)			(961	)			—				—				—				8,728
Food and beverage			15,102				(1,486	)			(106	)			—				—				—				13,510
Other departmental			1,211				(69	)			(38	)			—				—				—				1,104
Hotel selling, general and administrative			12,558				(1,209	)			(782	)			—				—				—				10,567
Property taxes, insurance and other			4,185				(471	)			(129	)			—				—				—				3,585
Total hotel operating expenses			44,230				(4,720	)			(2,016	)			—				—				—				37,494
Corporate expenses, including stock compensation of $4.0 million			10,834				—				—				—				—				—				10,834
Depreciation and amortization			8,373				(1,257	)			(687	)			—				—				—				6,429
Restructuring, development and disposal costs			4,593				(7	)			—				—				—				—				4,586
Total operating costs and expenses			68,030				(5,984	)			(2,703	)			—				—				—				59,343
Operating (loss) income			(13,626	)			1,648				649				159				—				—				(11,170	)
Interest expense, net			8,994				—				—				—				—				(1,370	)			7,624
Equity in loss of unconsolidated joint ventures			9,483				—				—				—				—				—				9,483
Gain on sale of Royalton			—				—				—				—				(226	)			—				(226	)
Gain on sale of Morgans			—				—				—				—				(229	)			—				(229	)
Other non-operating expenses (income)			1,390				—				—				—				—				—				1,390
(Loss) income before income tax expense			(33,493	)			1,648				649				159				455				1,370				(29,212	)
Income tax benefit			(135	)			—				—				—				—				—				(135	)
Net (loss) income from continuing operations			(33,358	)			1,648				649				159				455				1,370				(29,077	)
Income from discontinued operations, net of tax			490				—				—				—				—				—				490
Net (loss) income			(32,868	)			1,648				649				159				455				1,370				(28,587	)
Net loss attributable to noncontrolling interest			825				(60	)			(28	)			—				—				(41	)			696
Net (loss) income attributable to Morgans Hotel Group Co.			(34,043	)			1,588				621				159				455				1,329				(27,891	)
Preferred stock dividends and accretion			(2,187	)			—				—				—				—				—				(2,187	)
Net (loss) income attributable to common stockholders		$	(34,230	)		$	1,588			$	621			$	159			$	455			$	1,329			$	(30,078	)
(Loss) Income per share:
Basic and diluted continuing operations			(1.12	)																							(0.99	)
Basin and diluted discontinued operations			0.02																								0.02
Basic and diluted attributable to common stockholders			(1.10	)																							(0.97	)
Weighted average number of common shares outstanding:
Basic and diluted			31,103																								31,103

See accompanying notes to these unaudited pro forma consolidated financial statements.

Morgans Hotel Group Co.
Notes to Unaudited Pro Forma Consolidated Statements of Operations

The Unaudited Pro Forma Consolidated Statements of Operations for the three months ended March 31, 2011 reflects the effects of the sale of Royalton and Morgans and the repayment of the outstanding debt on the Company’s revolving credit facility as if these transactions had occurred on January 1, 2011. The Unaudited Pro Forma Consolidated Statement of Operations:

(A) Reflects the disposition of Royalton and reflects the necessary adjustments to remove the historical revenues and expenses of such operations, including depreciation and other costs.

(B) Reflects the disposition of Morgans and reflects the necessary adjustments to remove the historical revenues and expenses of such operations, including depreciation and other costs.

(C) Reflects the quarterly chain fees that the Company would have earned under its management agreements with FelCor during the period presented. No adjustment for management fees has been included for the three months ended March 31, 2011, as the Company would not have met certain performance hurdles necessary to earn such fees under the terms of the management agreements.

(D) Reflects the amortization of the deferred book value gain that will be recognized over 15-years, the life of the management contracts. For the three months ended March 31, 2011, the income represents a quarter of a full year of amortization.

(E) Reflects the elimination of interest expense and amortization of deferred financing costs related to the revolving credit facility, which was paid off with a portion of the proceeds from the sales of Royalton and Morgans. A portion of the sales proceeds was used to repay this debt which bore interest at a LIBOR floor of 1.0% plus 375 basis points.

Morgans Hotel Group Co.
Unaudited Pro Forma Consolidated Statements of Operations
For the Year Ended December 31, 2010
(in thousands, except per share data)

						Disposition of
		Historical for the				Royalton-																Revolving Credit				Pro Forma for
		year ended				Operating				Disposition of				Management Fees				Amortization of				Facility				the year ended
		December 31,				Results				Morgans Operating				Earned				Deferred Gain				Repayment				December 31,
		2010				(A)				Results (B)				(C)				(D)				(E)				2010
Revenues:
Rooms		$	139,268			$	(15,952	)		$	(9,767	)		$	—			$	—			$	—			$	113,549
Food and beverage			69,451				(4,649	)			(363	)			—				—				—				64,439
Other hotel operating			9,313				(368	)			(248	)			—				—				—				8,697
Total hotel revenues			218,032				(20,969	)			(10,378	)			—				—				—				186,685
Management fee — related party and other income			18,338				—				—				803				—				—				19,141
Total revenues			236,370				(20,969	)			(10,378	)			803				—				—				205,826
Operating Costs and Expenses:
Rooms			42,620				(5,876	)			(3,710	)			—				—				—				33,034
Food and beverage			58,227				(5,880	)			(483	)			—				—				—				51,864
Other departmental			5,304				(222	)			(176	)			—				—				—				4,906
Hotel selling, general and administrative			48,216				(4,662	)			(2,889	)			—				—				—				40,665
Property taxes, insurance and other			16,233				(2,126	)			(619	)			—				—				—				13,488
Total hotel operating expenses			170,600				(18,766	)			(7,877	)			—				—				—				143,957
Corporate expenses, including stock compensation of $10.9 million			34,538				—				—				—				—				—				34,538
Depreciation and amortization			32,158				(4,880	)			(2,716	)			—				—				—				24,562
Restructuring, development and disposal costs			3,916				(260	)			—				—				—				—				3,656
Impairment loss on receivables from unconsolidated joint venture			5,549				—				—				—				—				—				5,549
Total operating costs and expenses			246,761				(23,906	)			(10,593	)			—				—				—				212,262
Operating (loss) income			(10,391	)			2,937				215				803				—				—				(6,436	)
Interest expense, net			41,346				—				—				—				—				(5,045	)			36,301
Interest expense on property held for non-sale disposition			1,137				—				—				—				—				—				1,137
Equity in loss of unconsolidated joint ventures			16,203				—				—				—				—				—				16,203
Gain on sale of Royalton			—				—				—				—				(832	)			—				(832	)
Gain on sale of Morgans			—				—				—				—				(878	)			—				(878	)
Other non-operating expenses (income)			33,076				(18	)			8				—				—				—				33,066
(Loss) income before income tax expense			(102,153	)			2,955				207				803				1,710				5,045				(91,433	)
Income tax benefit			(1,335	)			—				—				—				—				—				(1,335	)
Net (loss) income from continuing operations			(100,818	)			2,955				207				803				1,710				5,045				(90,098	)
Income from discontinued operations, net of tax			17,170				—				—				—				—				—				17,170
Net (loss) income			(83,648	)			2,955				207				803				1,710				5,045				(72,928	)
Net loss attributable to noncontrolling interest			2,239				(131	)			(42	)			—				—				(161	)			1,905
Net (loss) income attributable to Morgans Hotel Group Co.			(81,409	)			2,824				165				803				1,710				4,884				(71,023	)
Preferred stock dividends and accretion			(8,554	)			—				—				—				—				—				(8,554	)
Net (loss) income attributable to common stockholders			(89,963	)			2,824				165				803				1,710				4,884				(79,577	)
(Loss) Income per share:
Basic and diluted continuing operations			(3.50	)																							(3.16	)
Basin and diluted discontinued operations			0.56																								0.56
Basic and diluted attributable to common stockholders			(2.94	)																							(2.60	)
Weighted average number of common shares outstanding:
Basic and diluted			30,563																								30,563

See accompanying notes to these unaudited pro forma consolidated financial statements.

Morgans Hotel Group Co.
Notes to Unaudited Pro Forma Consolidated Statements of Operations

The Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2010 reflects the effects of the sale of Royalton and Morgans and the repayment of the outstanding debt on the Company’s revolving credit facility as if these transactions had occurred on January 1, 2010. The Unaudited Pro Forma Consolidated Statement of Operations:

(A) Reflects the disposition of Royalton and reflects the necessary adjustments to remove the historical revenues and expenses of such operations, including depreciation and other costs.

(B) Reflects the disposition of Morgans and reflects the necessary adjustments to remove the historical revenues and expenses of such operations, including depreciation and other costs.

(C) Reflects the annual chain fees that the Company would have earned under its management agreements with FelCor during the period presented. No adjustment for management fees has been included for the year ended December 31, 2010, as the Company would not have met certain performance hurdles necessary to earn such fees under the terms of the management agreements.

(D) Reflects the amortization of the deferred book value gain that will be recognized over 15-years, the life of the management contracts. For the year ended December 31, 2010, the income represents a full year of amortization.

(E) Reflects the elimination of interest expense and amortization of deferred financing costs related to the revolving credit facility, which was paid off with a portion of the proceeds from the sales of Royalton and Morgans. A portion of the sales proceeds was used to repay this debt which bore interest at a LIBOR floor of 1.0% plus 375 basis points.