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 3, 2011, Mondrian Holdings LLC (“Mondrian Holdings”), a subsidiary of Morgans Hotel Group Co. (the “Company”), completed the sale of Mondrian Los Angeles for $137.0 million to Wolverines Owner LLC, an affiliate of Pebblebrook Hotel Trust, pursuant to a purchase and sale agreement entered into on April 22, 2011. The parties have agreed that the Company will continue to operate the hotel under a 20-year management agreement with one 10-year extension option.

The Unaudited Pro Forma Consolidated Financial Statements include adjustments to reflect the effects of the sale of Mondrian Los Angeles and the repayment of mortgage debt on the sold property. The Unaudited Pro Forma Consolidated Statement of Operations for the fiscal year ended December 31, 2010 is presented as if the sale was completed as of January 1, 2010 and the Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2010 is presented as if the sale was consummated at December 31, 2010. 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.

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 sale, 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 sale 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 sale 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)

		Historical as of				Pro Forma				Pro Forma as of
		December 31, 2010				Adjustments				December 31, 2010
ASSETS
Property and equipment, net		$	459,591			$	(70,716	) A		$	388,875
Goodwill			73,698				(9,842	) A			63,856
Investments in and advances to unconsolidated subsidiaries			20,450				31	A			20,481
Investment in property held for non-sale disposition			9,775				—				9,775
Cash and cash equivalents			5,250				37,226	C			42,476
Restricted cash			28,783				(9,202	) B			19,581
Accounts receivable, net			8,088				(650	) A			7,438
Related party receivables			3,834				—				3,834
Prepaid expenses and other assets			10,090				(812	) A			9,278
Deferred tax asset, net			80,144				—	D			80,144
Other, net			15,073				(1,286	) A			13,787
TOTAL ASSETS		$	714,776			$	(55,251	)		$	659,525
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Debt and capital lease obligations		$	662,275			$	(103,496	) B		$	558,779
Mortgage debt of property held for non-sale disposition			10,500				—				10,500
Accounts payable and accrued liabilities			27,269				(1,746	) A			25,523
Accounts payable and accrued liabilities of property held for non-sale disposition			1,162				—				1,162
Distributions and losses in excess of investment in unconsolidated joint ventures			1,509				—				1,509
Deferred gain on sale of Mondrian Los Angeles			—				53,242	E			53,242
Other liabilities			13,866				—				13,866
Total Liabilities			716,581				(52,000	)			664,581
Commitments and contingencies
Preferred securities, $.01 par value; liquidation preference $1,000 per share, 75,000 shares authorized and issued at December 31, 2010			51,118				—				51,118
Common stock, $.01 par value; 200,000,000 shares authorized; 36,277,495 shares issued at December 31, 2010			363				—				363
Additional paid-in capital			297,554				—				297,554
Treasury stock, at cost, 5,985,045 shares of common stock at December 31, 2010			(92,688	)			—				(92,688	)
Accumulated comprehensive loss			(3,194	)			—				(3,194	)
Accumulated deficit			(265,874	)			(3,220	) E			(269,094	)
Total Morgans Hotel Group Co. stockholders’ deficit			(12,721	)			(3,220	)			(15,941	)
Noncontrolling interest			10,916				(31	) A			10,885
Total deficit			(1,805	)			(3,251	)			(5,056	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	714,776			$	(55,251	)		$	659,525

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 assumes the following occurred on December 31, 2010:

(A)    Reflects the disposition of Mondrian Los Angeles and the removal of the book value of the hotel property and equipment, goodwill allocated to the property, and other related assets and liabilities associated with the hotel as a result of the disposition. Also, reflects the assignment of the Company’s economic interest in 8440 LLC (“8440”) and Sunset Restaurant LLC (“Sunset” and, together with 8440, the “F&B Entities”), its subsidiaries associated with the hotel’s food and beverage operations, to the new owners.

(B)    Reflects the repayment of the outstanding mortgage debt on Mondrian Los Angeles with a portion of the proceeds received from the sale of the hotel and restricted cash held in escrow accounts related to the outstanding debt.

(C)    Reflects the cash proceeds from the sale of Mondrian Los Angeles, after the above mentioned working capital adjustments, repayment of the outstanding mortgage debt of $103.5 million, and estimated closing costs of $5.5 million, or 4.0%, of the $137.0 million sales price.

(D)    The Company expects to record a tax gain on the sale of Mondrian Los Angeles 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 $86 million and that the projected tax savings will be approximately $36 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 transaction.

(E)    Reflects the book value gain from the sale of Mondrian Los Angeles. The Company will continue to manage the hotel pursuant to a 20-year management contract. This gain will be amortized over the life of the management contract.

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

(in thousands, except per share data)

						Disposition of
						Mondrian Los
		Historical for the				Angeles —												Pro Forma for
		year ended				Operating								Amortization of				the year ended
		December 31,				Results and				Management				Deferred				December 31,
		2010				Debt (A)				Fees Earned (B)				Gain (C)				2010
Revenues:
Rooms		$	139,268			$	(15,862	)		$	—			$	—			$	123,406
Food and beverage			69,451				(13,632	)			—				—				55,819
Other hotel operating			9,313				(2,233	)			—				—				7,080
Total hotel revenues			218,032				(31,727	)			—				—				186,305
Management fee — related party and other income			18,338				—				1,745				—				20,083
Total revenues			236,370				(31,727	)			1,745				—				206,388
Operating Costs and Expenses:
Rooms			42,620				(4,046	)			—				—				38,574
Food and beverage			58,227				(8,089	)			—				—				50,138
Other departmental			5,304				(774	)			—				—				4,530
Hotel selling, general and administrative			48,216				(6,924	)			—				—				41,292
Property taxes, insurance and other			16,233				(2,046	)			—				—				14,187
Total hotel operating expenses			170,600				(21,879	)			—				—				148,721
Corporate expenses, including stock compensation of $10.9 million			34,538				—				—				—				34,538
Depreciation and amortization			32,158				(5,331	)			—				—				26,827
Restructuring, development and disposal costs			3,916				(11	)			—				—				3,905
Impairment loss on receivables from unconsolidated joint venture			5,549				—				—				—				5,549
Total operating costs and expenses			246,761				(27,221	)			—				—				219,540
Operating (loss) income			(10,391	)			(4,506	)			1,745				—				(13,152	)
Interest expense, net			41,346				(5,458	)			—				—				35,888
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 Mondrian Los Angeles			—				—				—				(2,662	)			(2,662	)
Other non-operating expenses (income)			33,076				(121	)			—				—				32,955
(Loss) income before income tax expense			(102,153	)			1,073				1,745				2,662				(96,673	)
Income tax benefit			(1,335	)			—				—				—				(1,335	)
Net (loss) income from continuing operations			(100,818	)			1,073				1,745				2,662				(95,338	)
Income (loss) from discontinued operations, net of tax			17,170				—				—				—				17,170
Net (loss) income			(83,648	)			1,073				1,745				2,662				(78,168	)
Net loss (income) attributable to noncontrolling interest			2,239				(79	)			—				—				2,160
Net (loss) income attributable to Morgans Hotel Group Co.			(81,409	)			994				1,745				2,662				(76,008	)
Preferred stock dividends and accretion			(8,554	)			—				—				—				(8,554	)
Net (loss) income attributable to common stockholders		$	(89,963	)		$	994			$	1,745			$	2,662			$	(84,562	)
(Loss) Income per share:
Basic and diluted continuing operations		$	(3.50	)														$	(3.33	)
Basin and diluted discontinued operations		$	0.56															$	0.56
Basic and diluted attributable to common stockholders		$	(2.94	)														$	(2.77	)
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 Statement of Operations

The Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 2010 assumes the following occurred on January 1, 2010:

(A)    Reflects the disposition of Mondrian Los Angeles and the transfer of the Company’s economic interests in the F&B Entities and reflects the necessary adjustments to remove the historical revenues and expenses of such operations, including depreciation and other costs. Also reflects the elimination of interest expense and amortization of deferred financing costs related to mortgage debt, which was paid off with a portion of the proceeds from the sale of the hotel and restricted cash held in escrow accounts related to the debt. Approximately $103.5 million of sales proceeds and restricted cash held in escrow accounts were used to repay this mortgage debt which bore interest at LIBOR (0.26% at December 31, 2010) plus 164 basis points.

(B)    Reflects the yearly management and chain fees that the Company earned managing the hotel calculated in accordance with the management agreement.

(C)    Reflects the amortization of the deferred book value gain that will be recognized over 20-years, the life of the management contract. The income represents a full year of amortization.