SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549




                                   FORM 10-QA


 (Mark One)
    [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
                              EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2002
                                       OR

    [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

          For the transition period from               to


                       Commission file number:  001-14765

                            HERSHA HOSPITALITY TRUST
             (Exact Name of Registrant as Specified in Its Charter)


                 MARYLAND                                   251811499
    (State or Other Jurisdiction of                     (I.R.S. Employer
     Incorporation or Organization)                    Identification No.)

          148 SHERATON DRIVE, BOX A
         NEW CUMBERLAND, PENNSYLVANIA                             17070
 (Address of Registrant's Principal Executive Offices)          (Zip Code)

       Registrant's telephone number, including area code:  (717) 770-2405

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  [X]  No  [ ]

As of June 30, 2002, the number of outstanding Priority Class A Common Shares of
Beneficial  Interest  outstanding  was  2,575,459.



                            HERSHA HOSPITALITY TRUST

                                      INDEX

                                                                       FORM 10-Q
                                                                        REPORT
ITEM NO.                                                                 PAGE
--------                                                                 ----

PART I.   FINANCIAL  INFORMATION

Item 1.   Financial  Statements
          HERSHA  HOSPITALITY  TRUST
          Report  of  Independent  Accountant . . . . . . . . . . . . . . 1
          Consolidated Balance Sheets as of June 30, 2002 [Unaudited]
          and  December  31,  2001. . . . . . . . . . . . . . . . . . . . 2
          Consolidated Statements of Operations for the three and six
          Months ended June 30, 2002 and 2001 [Unaudited] . . . . . . . . 3
          Consolidated Statement of Cash Flows for the six months ended
          June 30, 2002 and 2001 [Unaudited]. . . . . . . . . . . . . . . 4
          Notes to Consolidated Financial Statements. . . . . . . . . . . 7

          HERSHA HOSPITALITY MANAGEMENT, L.P.
          Report of Independent Accountant. . . . . . . . . . . . . . . .16
          Balance Sheets as of June 30, 2002 [Unaudited] and
          December 31, 2001 . . . . . . . . . . . . . . . . . . . . . . .17
          Statements of Operations for the three and six months ended
          June 30, 2002 and 2001 [Unaudited]. . . . . . . . . . . . . . .18
          Statement of Cash Flows for the six months ended
          June 30, 2002 and 2001 [Unaudited]. . . . . . . . . . . . . . .19
          Notes to Financial Statements . . . . . . . . . . . . . . . . .20

Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations. . . . . . . . . . . . . . . . . . . . . 22
          Results of Operations, Six Months Ended June 30, 2002
          and 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
          Results of Operations, Three Months Ended June 30, 2002
          and 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
          Liquidity and Capital Resources. . . . . . . . . . . . . . . . 25
          Inflation. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
          Seasonality. . . . . . . . . . . . . . . . . . . . . . . . . . 26
          Subsequent Events. . . . . . . . . . . . . . . . . . . . . . . 26

Item 3.   Quantitative and Qualitative Disclosures About Market Risk . . 26

PART II.  OTHER  INFORMATION

Item 1.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 27
Item 2.   Changes in Securities and Use of Proceeds. . . . . . . . . . . 27
Item 3.   Defaults Upon Senior Securities. . . . . . . . . . . . . . . . 27
Item 4.   Submission of Matters to a Vote of Security Holders. . . . . . 27
Item 5.   Other Information. . . . . . . . . . . . . . . . . . . . . . . 27
Item 6.   Exhibits and Reports on Form - K . . . . . . . . . . . . . . . 27
               (a) Exhibits. . . . . . . . . . . . . . . . . . . . . . . 27
               (b) Reports on Form 8-K . . . . . . . . . . . . . . . . . 27



                        REPORT OF INDEPENDENT ACCOUNTANT

To the Shareholders and Board of Trustees of
  Hersha Hospitality Trust
  New Cumberland, Pennsylvania


     We  have  reviewed  the  accompanying  consolidated balance sheet of Hersha
Hospitality  Trust  and  Subsidiaries  as  of  June  30,  2002,  and the related
consolidated  statements of operations and consolidated statements of cash flows
for  the  three  and  six  month  periods  ended  June 30, 2002 and 2001.  These
consolidated  financial  statements  are  the  responsibility  of  the Company's
management.

     We  conducted  our  reviews in accordance with standards established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data  and  making  inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of  an  opinion regarding the consolidated financial statements
taken  as  a whole. Accordingly, we do not express such an opinion.

     Based  on  our reviews, we are not aware of any material modifications that
should be made to the accompanying consolidated financial statements referred to
above  for  them  to  be  in  conformity  with  generally  accepted  accounting
principles.

     We have previously audited, in accordance with auditing standards generally
accepted  in  the United States of America, the consolidated balance sheet as of
December  31,  2001,  and  the  related  consolidated  statements of operations,
shareholders'  equity,  and  cash  flows  for the year then ended [not presented
herein];  and  in  our  report  dated March 8, 2002, we expressed an unqualified
opinion  on  those  consolidated  financial  statements.  In  our  opinion,  the
information  set  forth  in  the  accompanying  consolidated balance sheet as of
December  31,  2001,  is fairly stated, in all material respects, in relation to
the  consolidated  balance  sheet  from  which  it  has  been  derived.



                                               MOORE STEPHENS, P.C.
                                               Certified Public Accountants.

New York, New York
August 1, 2002


                                        1



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

================================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
[IN THOUSANDS, EXCEPT SHARE AMOUNTS]
================================================================================================

                                                                       JUNE 30,      DECEMBER 31,
                                                                    -------------  --------------
                                                                        2002            2001
                                                                    -------------  --------------
ASSETS:                                                              [UNAUDITED]
                                                                    -------------
                                                                             
  Cash and cash equivalents                                         $        173   $         167
  Investment in Hotel Properties, Net of Accumulated Depreciation         89,587          88,100
  Escrow and Lease Deposits                                                1,862           1,647
  Lease Payments Receivable - Related Party                                3,275           2,376
  Intangibles, Net of Accumulated Amortization                               810           1,515
  Due from Related Party                                                   2,083           1,884
  Other Assets                                                               445             328
                                                                    -------------  --------------
TOTAL ASSETS                                                        $     98,235   $      96,017
                                                                    =============  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY:
  Lines of Credit                                                   $      9,124   $       7,058
  Deposits Payable                                                         1,000           1,000
  Mortgages Payable                                                       53,388          54,477
  Dividends Payable                                                        1,378           1,325
  Due to Related Party                                                     1,242           1,093
  Accounts Payable and Accrued Expenses                                      657             418
                                                                    -------------  --------------
TOTAL LIABILITIES                                                         66,789          65,371
                                                                    -------------  --------------

Minority Interest                                                         19,824          20,436
                                                                    -------------  --------------

Shareholders' Equity:
  Preferred Shares, $.01 par value, 10,000 Shares authorized, None
  Issued and Outstanding                                                      --              --

  Common Shares - Priority Class A, $.01 Par Value, 50,000,000                26              23
  Shares Authorized, 2,575,459 and 2,275,000 Shares Issued and
  Outstanding at June 30, 2002 and December 31, 2001,
  Respectively (Aggregate Liquidation Preference $15,453 and
  13,650, Respectively)

  Common Shares - Class B, $.01 Par Value, 50,000,000 Shares
  Authorized, -0- Shares Issued and Outstanding at June 30, 2002
  and December 31, 2001, Respectively                                         --              --

  Additional Paid-in Capital                                              13,669          11,968

  Distributions in Excess of Net Earnings                                 (2,073)         (1,781)
                                                                    -------------  --------------
TOTAL SHAREHOLDERS' EQUITY                                                11,622          10,210
                                                                    -------------  --------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                          $     98,235   $      96,017
                                                                    =============  ==============


The Accompanying Notes Are an Integral Part of This Consolidated Financial
Statement.


                                        2



==================================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2002 AND 2001 [UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
==================================================================================================

                                               THREE MONTHS ENDED            SIX MONTHS ENDED
                                                     JUNE 30,                    JUNE 30,
                                                2002          2001          2002          2001
                                            ------------  ------------  ------------  ------------
                                                                          
REVENUE:
  Percentage Lease Revenues - HHMLP         $     3,275   $     2,693   $     5,494   $     4,747
  Percentage Lease Revenues - Other                 700           700         1,400         1,400
  Interest - Related Party                           63            26           113            51
  Other Revenue                                       1             5             4            18
                                            ------------  ------------  ------------  ------------
  TOTAL REVENUE                                   4,039         3,424         7,011         6,216

EXPENSES:
  Interest expense                                1,237         1,262         2,477         2,566
  Land Lease - Related Party                          -             4             -             8
  Real Estate and Personal Property
  Taxes and Property Insurance                      268           247           513           461
  General and Administrative                        207           146           359           280
  Loss on Disposition of Hotel Properties             -            12             -            12
  Depreciation and Amortization                   1,055           978         2,076         2,022
                                            ------------  ------------  ------------  ------------
  TOTAL EXPENSES                                  2,767         2,649         5,425         5,349
                                            ------------  ------------  ------------  ------------

  INCOME BEFORE MINORITY INTEREST                 1,272           775         1,586           867
    AND DISCONTINUED OPERATIONS

  INCOME ALLOCATED TO MINORITY INTEREST             964           540           968           540

  INCOME FROM DISCONTINUED OPERATIONS                 -            10             -            34
                                            ------------  ------------  ------------  ------------

  NET INCOME                                $       308   $       245   $       618   $       361
                                            ============  ============  ============  ============

  EARNINGS PER SHARE DATA:
  ------------------------
  Basic - before discontinued Operations    $      0.12   $      0.10   $      0.25   $      0.15
  Discontinued operations                   $         -   $      0.01   $         -   $      0.01
  Basic                                     $      0.12   $      0.11   $      0.25   $      0.16

  Diluted - before discontinued operations  $      0.12   $      0.10   $      0.21   $      0.11
  Discontinued operations                   $         -   $      0.01   $         -   $      0.01
  Diluted                                   $         0   $      0.11   $      0.21   $      0.12

WEIGHTED AVERAGE SHARES:
  Basic                                       2,575,459     2,275,000     2,462,220     2,275,000

  Diluted                                     7,675,181(1)  7,229,172(1)  7,561,942(1)  7,238,313(1)



(1) Includes 5,099,722 and 5,071,840 units at June 30, 2002 and 2001,
respectively, that are redeemable on a one-for-one basis for Class B common
shares.

The Accompanying Notes Are an Integral Part of This Consolidated Financial
Statement.


                                        3



================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
JUNE 30, 2002 AND 2001[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AMOUNTS]
================================================================================

                                                   SIX MONTHS ENDED JUNE 30,
                                                    2002               2001
                                                  --------           --------
                                                               
OPERATING ACTIVITIES:
  Net Income                                      $   618            $   361
                                                  --------           --------
  Adjustments to Reconcile Net Income to
  Net Cash Provided by Operating Activities:
    Depreciation and Amortization                   2,076              2,203
    Income Allocated to Minority Interest             968                540
  Change in Assets and Liabilities:
  (Increase) Decrease in:
    Lease and Escrow Deposits                        (215)              (203)
    Lease Payments Receivable - Related Party        (899)              (365)
    Other Assets                                     (117)              (115)
    Due from Related Party                           (199)              (273)
  Increase (Decrease):
    Due to Related Parties                            149               (345)
    Accounts Payable and Accrued Expenses             239                170
                                                  --------           --------
  Total Adjustments                                 2,002              1,612
                                                  --------           --------
NET CASH PROVIDED BY OPERATING ACTIVITIES           2,620              1,973

INVESTING ACTIVITIES:
  Purchase of Hotel Property Assets                (2,241)            (2,987)
  Sale of Hotel Property Assets                         -              8,826
  Purchase of Intangible Assets                         -                (35)
                                                  --------           --------
NET CASH (USED) IN INVESTING ACTIVITIES            (2,241)             5,804

FINANCING ACTIVITIES:
  Proceeds from Borrowings Under Line of Credit     7,053              2,577
  Repayment of Borrowings Under Line of Credit     (4,987)            (5,580)
  Cash Received from Stock Sales                    1,700                  -
  Principal Repayment of Mortgages Payable           (451)              (325)
  Dividends Paid                                     (856)              (819)
  Limited Partnership Unit Distributions Paid      (1,833)            (1,694)
  Repayment of Related Party Loans                      -             (1,936)
  Loans to Related Party                           (1,000)                 -
                                                  --------           --------
NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES     (374)            (7,777)

NET INCREASE IN CASH AND CASH EQUIVALENTS               5                  -
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD       168                  -
                                                  --------           --------
CASH AND CASH EQUIVALENTS - END OF PERIOD          $  173             $    -
                                                  ========           ========


The Accompanying Notes Are an Integral Part of This Consolidated Financial
Statement.


                                        4

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND
2001 [UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AMOUNTS]
================================================================================


                                                             SIX MONTHS ENDED
                                                                 JUNE 30,
                                                                 --------
                                                             2002        2001
                                                             ----        ----
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------
  CASH PAID DURING THE PERIOD:
  Interest                                                 $2,496      $2,690


SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

As  of  January  1,  2001,  we  issued  an  additional  531,559 units of limited
partnership  interest  in  connection  with  the  repricing  of  the Holiday Inn
Express,  Hershey,  Hampton Inn, Carlisle, Holiday Inn Express, New Columbia and
the  Comfort  Inn,  Harrisburg.  The  total  number  of  units outstanding as of
January  1,  2001  was  4,972,555.

On  April  1,  2001, we sold the Best Western, Indiana for $2,200 to some of our
executive  officers,  trustees  and  their affiliates.  In conjunction with this
transaction,  we  received  cash  proceeds  of  $400 and redeemed 76,252 limited
partnership  units  valued  at  $457.  The  buyer  also  assumed the outstanding
mortgage  balance  of  $1,342.

On May 1, 2001, we sold the Comfort Inn, Denver for $2,100 to an unrelated third
party.  Net  of  settlement  fees  and  other  costs,  we  received  $1,868.  In
conjunction  with  this  transaction, we received cash proceeds of $460 and have
paid down the outstanding mortgage balance of $1,408 to Shreenathji Enterprises,
Ltd.,  a  related  party.

On  June  1, 2001, we sold the Comfort Inn, JFK for $7,000 to an unrelated third
party.  Net  of  settlement  fees  and other costs, we received cash proceeds of
$6,613.  Based  upon  the  initial  repricing  formula,  we issued an additional
175,538  limited  partnership  units  in  conjunction  with  this  transaction.

On  June  1,  2001,  we  purchased  the Mainstay Suites and Sleep Inn in King of
Prussia  from some of our executive officers, trustees and their affiliates.  We
purchased  these  assets  for  $9,445  plus  settlement costs and leased them to
Hersha  Hospitality  Management,  LP  ("HHMLP").  In  conjunction  with  this
transaction,  we  assumed the mortgage indebtedness of $6,738, assumed $1,000 of
related  party  debt and funded the remainder of the proceeds of $1,768 from our
available  cash  and  outstanding  line  of  credit.

On  November 1, 2001, we purchased the Holiday Inn Express hotel located in Long
Island City, New York.  We purchased this asset for $8,500 plus settlement costs
of  approximately  $100  and  leased  it  to  HHMLP.  In  conjunction  with this
transaction,  we  assumed  the  mortgage  indebtedness  of approximately $5,445,
assumed  $1,000 of related party debt, issued additional units for $459 and paid
cash  of  approximately  $1,600.

On  November  1,  2001,  we  sold  the  Comfort  Inn, McHenry, MD to some of our
executive  officers,  trustees  and  their  affiliates for approximately $1,800,
including  the assumption of approximately $1,180 in indebtedness, redemption of
55,175  limited partnership units valued at approximately $331 and cash proceeds
of  approximately  $300.

On November 1, 2001, we sold the Comfort Inn, Riverfront, Harrisburg, PA to some
of  our  executive  officers,  trustees  and  their affiliates for $3,400 net of
selling  costs, including the assumption of approximately $2,500 in indebtedness
and  approximately  $900  in  cash.


                                        5

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
JUNE 30, 2001 AND 2000 [UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AMOUNTS]
================================================================================


On  November  1,  2001,  we sold the Holiday Inn, Milesburg, PA to a third party
owner  operator  for  approximately  $4,700  less  broker  fees,  settlement and
transfer  costs  of  $617.  Net  of  these  fees  and  expenses we received cash
proceeds  of  $3,926  and  paid  down  a  related party loan receivable of $157.

As  of  January  1, 2002, we issued an aggregate of 333,541 additional operating
partnership units in connection with the re-pricing of the Holiday Inn Express &
Suites,  Harrisburg,  the  Hampton  Inn,  Danville and the Hampton Inn & Suites,
Hershey,  Pennsylvania.  The  total number of units outstanding as of January 1,
2002  was  5,099,722.

The  Board  of Trustees approved the purchase of the Mainstay Suites, Frederick,
Maryland,  on  February  27, 2002 to be effective January 1, 2002.  We purchased
this  asset  for $5,500 plus settlement costs of approximately $21 and leased it
to  HHMLP.  In  conjunction  with  this  transaction,  we  assumed  mortgage
indebtedness  of approximately $3.1 million, assumed $800 of related party debt,
and  paid  cash  of approximately $1,600.  The financial position and results of
operations  related  to the Mainstay Suites, Frederick, Maryland are included as
of  January  1,  2002.

Further,  on  February 27, 2002, the Board of Trustees also approved the sale of
the  Sleep  Inn,  Corapolis,  Pennsylvania  to  some  of our executive officers,
trustees  and  their  affiliates to be effective as of January 1, 2002.  We sold
this  asset  for  $5,500,  including  the  assumption of approximately $3,500 in
indebtedness  and  the redemption of 327,038 limited partnership units valued at
approximately $2,000.  We initially purchased this property from these executive
officers,  trustees  and  their  affiliates  as  of  October 1, 2000 for $5,500,
including  327,038  limited  partnership  units.  This  transaction  has  been
accounted  for  as  of  January  1,  2002.

During  the  quarter  ended  March  31,  2002,  we  issued an additional 300,000
Priority  Class  A  Common  Shares.  We  received  gross proceeds of $1,800.  We
received net proceeds of $1,700 after selling and offering expenses.

The  quarterly  dividend  distribution pertaining to the Class A Priority Common
Shares  and limited partnership units for the second quarter ended June 30, 2002
was  paid  on July 26, 2002, at the rate of $0.18 per share, which represents an
annualized  rate  of  $0.72  per  annum.

The  Accompanying  Notes  Are  an  Integral  Part of This Consolidated Financial
Statement.


                                        6

================================================================================
HERSHA  HOSPITALITY  TRUST  AND  SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS [UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[1] ORGANIZATION AND BASIS OF FINANCIAL PRESENTATION

Hersha  Hospitality  Trust was formed in May 1998 to acquire equity interests in
ten existing hotel properties.  We are a self-administered, Maryland real estate
investment  trust  for  federal  income  tax  purposes.  On January 26, 1999, we
completed  an  initial  public  offering  of  2,275,000 shares of $.01 par value
Priority  Class A Common Shares.  The offering price per share was $6, resulting
in  gross  proceeds  of  $13,650.  Net  of  underwriters  discount  and offering
expenses,  we  received proceeds of $11,991.  During the quarter ended March 31,
2002, we issued 300,000 shares of $.01 par value Priority Class A Common Shares.
The offering price per share was $6, resulting in gross proceeds of $1,800.  Net
of  selling  and  offering  expenses,  we  received  proceeds  of  $1,700.

Upon completion of the initial public offering, we contributed substantially all
of  the  net  proceeds  to  Hersha  Hospitality  Limited  Partnership  [the
"Partnership"]  in  exchange  for  a  36.1%  general partnership interest in the
Partnership.  The  Partnership used these proceeds to acquire an equity interest
in  ten  hotels  [the  "Initial Hotels"] through subsidiary partnerships, and to
retire  certain indebtedness relating to these hotels.  The Partnership acquired
these  hotels  in  exchange for (i) units of limited partnership interest in the
Partnership  which  are  redeemable,  subject  to  certain  limitations,  for an
aggregate  of  4,032,431  Priority  Class  B  Common  Shares,  with  a  value of
approximately  $24.2  million based on the initial public offering, and (ii) the
assumption of approximately $23.3 million of indebtedness of which approximately
$6.1  million  was repaid immediately after the acquisition of the hotels.  Some
of  our  executive  officers,  trustees  and  their  affiliates  [the  "Hersha
Affiliates"]  received units of limited partnership interests in the Partnership
aggregating  a 63.9% equity interest in the Partnership.  The Partnership owns a
99%  limited  partnership  interest  and  Hersha  Hospitality,  LLC ["HHLLC"], a
Virginia  limited  liability  company, owns a 1% general partnership interest in
the  subsidiary  partnerships.  The  Partnership  is  the  sole member of HHLLC.

We  instituted  a  dividend  reinvestment plan ("DRIP") for our Priority Class A
Common  Shares  on February 13, 2002.  Our DRIP provides holders of our Priority
Class A Common Shares with a convenient method of purchasing additional priority
common  shares  without  payment of any brokerage commission or service charges.
Any holder of record of priority common shares is eligible to participate in the
plan.  Participants  in  the plan may have cash dividends on all or a portion of
their  priority  common  shares  automatically  reinvested.

The  purchase price of the priority common shares purchased with reinvested cash
dividends  will  be at a price equal to 95% of the "average market price," which
means  the average of the close prices of our priority common shares as reported
by the American Stock Exchange for each of the five (5) trading days immediately
preceding  the  investment date as of which such purchase is made.  Shareholders
who  do  not  elect  to  participate  in  the plan will continue to receive cash
dividends  on  shares  registered  in  their  names.

As  of  June  30,  2002  we had issued an additional 459 Priority Class A Common
Shares pursuant to the DRIP.  Of the total dividends payable of $464 at June 30,
2002,  on July 26, 2002 we paid a cash dividend of $460 and issued an additional
642  shares.

We  lease  14  of  our  hotel  facilities  to Hersha Hospitality Management, LP,
["HHMLP"],  a  limited  partnership  owned  by  certain  members  of  the Hersha
Affiliates.  HHMLP operates and leases the hotel properties pursuant to separate
percentage  lease  agreements that provide for initial fixed rents or percentage
rents  based  on the revenues of the hotels.  The hotels are located principally
in  the  Mid-Atlantic  region  of  the United States.  We have also entered into
percentage  leases  with  Noble Investment Group, Ltd. ["Noble"], an independent
third  party  management  company,  to  lease  and  manage  four  hotels  in the
metropolitan  Atlanta  market.

Since  the  completion  of  the  initial  public  offering,  we  have  issued an
additional  173,539 units of limited partnership interest in connection with the
acquisition of the Hampton Inn, Danville, PA and 76,555 units in connection with
the acquisition of the Holiday Inn Express, Long Island City.  We also issued an
additional  1,275,662  units  of limited partnership interest in connection with
final  settlement  of the purchase prices of several hotels and redeemed 458,465
units  of  limited  partnership  interest in connection with the sale of certain
hotels.  The  total  number of units of limited partnership interest outstanding
as  of  June  30,  2002  and  June  30,  2001,  was  5,099,722  and  5,071,840,
respectively.


                                        7

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[2] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION - Percentage lease income is recognized when earned from the
Lessee under the agreements from the date of acquisition of each hotel property.
Contingent  rent  is  recognized  when  the contingency is met.  Lease income is
recognized  under fixed rent agreements ratably over the lease term.  All leases
between  us  and  the  lessees  are  operating  leases.

We  recognize  lease  revenue  for  interim  and annual reporting purposes on an
accrual  basis  pursuant to the terms of the respective percentage leases and on
an  interim  basis  in  accordance  with  the Securities and Exchange Commission
("SEC")  Staff  Accounting  Bulletin  ("SAB")  No.  101  "Revenue Recognition in
Financial  Statements." Under the provisions of SAB 101, which we adopted in the
fourth  quarter  of  2000,  a  portion  of  our percentage lease revenues, which
historically  were  recognized  in  the  first,  second, and third quarters, are
deferred  and  recognized in the fourth quarter. The adoption of SAB 101 impacts
the  interim  reporting  of revenues related to our leases, but has no impact on
its  interim  cash  flow  or  year-end  results  of  operations.

MINORITY  INTEREST - Minority interest in the Partnership represents the limited
partners  proportionate  share  of  the  equity  of  the Partnership.  Income is
allocated  to  minority  interest based on weighted average percentage ownership
throughout  the  year.

EARNINGS  PER  COMMON  SHARE  - We compute earnings per share in accordance with
Statement  of  Financial  Accounting  Standards  ["SFAS"] No. 128, "Earnings Per
Share."

INCOME  TAXES  -  We qualify as a real estate investment trust under Section 856
and  860  of  the  Internal Revenue Code.  Accordingly, no provision for federal
income  taxes  has  been  reflected  in  the  financial  statements.

IMPAIRMENT  OF  LONG  LIVED  ASSETS - We review the carrying value of each hotel
property in accordance with Statement of Financial Accounting Standards ("SFAS")
No.  144  to  determine  if  circumstances exist indicating an impairment in the
carrying  value  of  the  investment  in  the  hotel property or if depreciation
periods  should  be  modified.  Long-lived  assets  are  reviewed for impairment
whenever  events or changes in business circumstances indicate that the carrying
amount of the assets may not be fully recoverable.  We perform undiscounted cash
flow analyses to determine if impairment exists.  If an impairment is determined
to  exist, any related impairment loss is calculated based on fair value.  Hotel
properties  held  for sale are presented at the lower of carrying amount or fair
value  less  cost  to  sell.

RECENT ACCOUNTING PRONOUNCEMENTS  -  On April 30, 2002, the Financial Accounting
Standards  Board  (FASB) issued Statement No. 145, Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.

Statement  145  rescinds  Statement  4, which required all gains and losses from
extinguishments  of  debt  to  be  aggregated and, if material, classified as an
extraordinary  item, net of any income tax effect.  As a result, the criteria in
Opinion  No.  30 will now be used to classify those gains and losses.  Statement
64  amended  Statement 4 and is no longer necessary because Statement 4 has been
rescinded.

Statement  145  amended Statement 13 to require that certain lease modifications
that  have  economic effects similar to sale-leaseback transactions be accounted
for  in  the  same  manner  as  sale-leaseback  transactions.  This amendment is
consistent  with  the  FASB's goal of requiring similar accounting treatment for
transactions  that  have  similar  economic  effects.

This  Statement  also  makes  technical  corrections to existing pronouncements.
While  those  corrections are not substantive in nature, in some instances, they
may  change  accounting  practice.

In June 2002 the FASB issued Statement No. 146, "Accounting for Costs Associated
with  Exit  or  Disposal  Activities."


                                        8

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[2] SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [CONTINUED]

The  Company  expects  that  the  adoption of the new statements will not have a
significant  impact on its financial statements.  It is not possible to quantify
the  impact  until  the  newly  issued  statements  have  been  studied.

On  August  15,  2001,  the  FASB  issued  SFAS  No.  143, "Accounting for Asset
Retirement  Obligations".  SFAS  No.  143  requires  that  the  fair  value of a
liability  for  an  asset  retirement  obligation be recognized in the period in
which  it  is  incurred  if a reasonable estimate of fair value can be made. The
associated asset retirement costs are capitalized as part of the carrying amount
of the long-lived asset. SFAS No. 143 will be effective for financial statements
issued for fiscal years beginning after June 15, 2002. An entity shall recognize
the  cumulative  effect  of  adoption  of SFAS No. 143 as a change in accounting
principle.

In  June  2001,  the FASB issued SFAS No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets", collectively referred to as the
"Standards". SFAS No. 141 supersedes Accounting Principles Board Opinion ("APB")
No.  16,  "Business  Combinations".  SFAS No. 141 (1) requires that the purchase
method  of accounting be used for all business combinations initiated after June
30,  2001;  (2)  provides  specific  criteria  for  the  initial recognition and
measurement  of  intangible  assets  apart  from goodwill; and (3) requires that
unamortized  negative  goodwill  be  written off immediately as an extraordinary
gain.  SFAS No. 142 supersedes APB 17, "Intangible Assets," and is effective for
fiscal  years  beginning  after  December  15,  2001.

SFAS  No.  142  primarily  addresses  the accounting for goodwill and intangible
assets  subsequent  to their initial recognition. SFAS No. 142 (1) prohibits the
amortization  of  goodwill  and indefinite-lived intangible assets; (2) requires
testing  of  goodwill  and indefinite-lived intangible assets on an annual basis
for  impairment  (and  more  frequently  if  the  occurrence  of  an  event  or
circumstance  indicates  an  impairment);  (3)  requires that reporting units be
identified  for  the  purpose  of  assessing  potential  future  impairments  of
goodwill;  and  (4) removes the forty-year limitation on the amortization period
of  intangible  assets  that  have finite lives. The provisions of the Standards
also  apply  to  equity-method  investments  made both before and after June 30,
2001.  SFAS No. 141 requires that the unamortized deferred credit, related to an
excess  over  cost  arising  from  an investment acquired prior to July 1, 2001,
accounted for using the equity method (equity-method negative goodwill), must be
written-off  immediately  and recognized as the cumulative effect of a change in
accounting  principle.  Equity-method  negative  goodwill  arising  from  equity
investments  made  after  June  30,  2001  must  be  written-off immediately and
recorded  as an extraordinary gain.  We adopted SFAS No. 142 on January 1, 2002.
Going  forward, we will test goodwill for impairment annually or more frequently
if  the  occurrence  of  an event or circumstance indicate potential impairment.

Non-amortization  of goodwill during the current three and six months ended June
30,  2002  had a non-material impact on our net income, basic earnings per share
and  diluted  earnings  per  share.

[3] COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS

The  Priority Class A Common Shares have priority as to the payment of dividends
until  dividends  equal $0.72 per share on a cumulative basis and shares equally
in  additional dividends after the Class B Common Shares have received $0.72 per
share  in  each  annual  period.  The  Priority  Class  A  Common Shares carry a
liquidation  preference  of $6.00 per share plus unpaid dividends and votes with
the Class B Common Shares on a one vote per share basis.  The Priority period of
the  Class  A  Shares  will  commence  on the date of the closing of the initial
public  offering  and  end  on  the  earlier of (i) five years after the initial
public offering of the Priority Common Shares, or (ii) the date


                                        9

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[3] COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS [CONTINUED]

that  is  15  trading  days  after we send notice to the holders of the Priority
Common Shares, provided that the closing bid price of the Priority Common Shares
is  at  least  $7  on  each  trading  day  during  such  15-day  period.

Pursuant  to  the  Hersha Hospitality Limited Partnership agreement, the limited
partners  have  certain  redemption  rights  that  enable  them  to  cause  the
partnership  to  redeem  their units of limited partnership interest in exchange
for Class B Common Shares or for cash at our election.  In the event the Class B
Common  Shares  are  converted  into  Priority  Class  A  Common Shares prior to
redemption  of  the  units,  the  units  will be redeemable for Priority Class A
Common Shares.  If we do not exercise our option to redeem the units for Class B
Common Shares, then the limited partner may make a written demand that we redeem
the  units  for Class B Common Shares.  These redemption rights may be exercised
by  the  limited  partners.  At  June  30, 2002 and June 30, 2001, the aggregate
number  of  Class B Common Shares issuable to the limited partners upon exercise
of  the  redemption rights is 5,099,722 and 5,071,840, respectively.  The number
of  shares issuable upon exercise of the redemption rights will be adjusted upon
the occurrence of stock splits, mergers, consolidation or similar pro rata share
transactions,  that  otherwise  would  have the effect of diluting the ownership
interest  of  the  limited  partners  or  our  shareholders.

We  are  the  sole general partner in the Partnership, which is the sole general
partner in the Subsidiary Partnerships and, as such, are liable for all recourse
debt  of  the Partnership to the extent not paid by the subsidiary partnerships.
In the opinion of management, we do not anticipate any losses as a result of our
obligations  as  general  partner.

In  conjunction with the initial public offering, we acquired the Initial Hotels
and  entered  into  percentage  lease  agreements  with HHMLP.  We have acquired
twelve  properties  from  the Hersha Affiliates that were subsequently leased to
HHMLP  and  acquired  four properties from Noble that were leased back to Noble,
subsequent to our public offering.  Under the percentage leases, the Partnership
is  obligated  to pay the costs of certain capital improvements, real estate and
personal  property  taxes  and  property insurance, and to make available to the
lessee  an amount equal to 4% [6% for some hotels] of room revenues per quarter,
on  a  cumulative  basis,  for  the  periodic  replacement  or  refurbishment of
furniture,  fixtures  and  equipment  at  these  hotels.

We  have  entered into percentage leases relating to 14 hotels with HHMLP.  Each
percentage lease has an initial non-cancelable term of five years.  All, but not
less  than all, of the percentage leases for these 14 hotels may be extended for
an  additional  five-year  term  at  HHMLP's  option.  At  the  end of the first
extended  term,  HHMLP,  at its option, may extend some or all of the percentage
leases for these hotels for an additional five-year term.  Pursuant to the terms
of  the  percentage  leases, HHMLP is required to pay either initial fixed rent,
base  rent  or  percentage  rent  and  certain  other  additional charges and is
entitled  to  all profits from the operations of the hotels after the payment of
certain  specified  operating  expenses.

We  have  future lease commitments from HHMLP through June 2006.  Minimum future
rental  income  under these non-cancelable operating leases at June 30, 2002, is
as  follows:

     December 31, 2002   $3,503
     December 31, 2003    5,601
     December 31, 2004    2,497
     December 31, 2005    2,011
     December 31, 2006    1,074
     Thereafter               0
                        -------

     TOTAL              $14,686
                        =======

We have entered into percentage leases relating to four hotels with Noble.  Each
percentage  lease  has  an initial non-cancelable term of three years.  All, but
not  less  than  all,  of  the  percentage  leases  for these four hotels may be
extended for an additional three-year term at Noble's option.  At the end of the
first  extended  term, we or Noble may extend all, but not less than all, of the
percentage  leases for these hotels for an additional three-year term.  Pursuant
to  the  terms of the percentage leases, Noble is required to pay either initial
fixed  rent  or  percentage  rent


                                       10

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[3] COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS [CONTINUED]

and  certain  other  additional  charges and is entitled to all profits from the
operations  of  the  hotels  after  the  payment  of certain specified operating
expenses.

We  have  future  lease  commitments  from  Noble through May 19, 2003.  Minimum
future  rental  income  under  these non-cancelable operating leases at June 30,
2002,  is  as  follows:

     December 31, 2002  $1,400
     December 31, 2003     946
     Thereafer               0
                        ------

     TOTAL              $2,346
                        ======

For  the  period  January 1, 2002 through June 30, 2002, we earned initial fixed
rents  of  $3,057 and earned percentage rents of $3,837.  For the period January
1,  2001  through  June  30,  2001,  we earned initial fixed rents of $3,445 and
earned  percentage  rents  of  $3,122.

The  hotel  properties  are  operated  under franchise agreements assumed by the
lessee  that  have  10  to  20  year  lives  but may be terminated by either the
franchisee  or  franchisor  on  certain  anniversary  dates  specified  in  the
agreements.  The  agreements  require  annual  payments for franchise royalties,
reservation,  and  advertising services, which are calculated as a percentage of
gross  room  revenues.  These  fees  are  paid  by  our  lessees.

We  have  acquired,  and  expect  to  acquire  in the future, from affiliates of
certain  of  our  executive  officers  and  trustees,  newly-developed  or
newly-renovated hotels that do not have an operating history that would allow us
to  make  purchase  price  decisions based on historical performance.  In buying
these  hotels,  we  have  utilized,  and  expect  to  continue  to  utilize,  a
"re-pricing" methodology that, in effect, adjusts the initial purchase price for
the  hotel, one or two years after we initially purchase the hotel, based on the
actual  operating  performance  of  the hotel during the previous twelve months.
All  purchase  price  adjustments  are approved by a majority of our independent
trustees.

The  initial purchase price for each of these hotels was based upon management's
projections  of  the  hotel's  performance  for  one  or two years following our
purchase.  The  leases  for  these hotels provide for fixed initial rent for the
one-  or  two-year adjustment period that provides us with a 12% annual yield on
the  initial  purchase price, net of certain expenses.  At the end of the one or
two-year  period,  we  calculate  a value for the hotel, based on the actual net
income  during the previous twelve months, net of certain expenses, such that it
would  have  yielded a 12% return.  We then apply the percentage rent formula to
the  hotel's  historical  revenues for the previous twelve months on a pro forma
basis.  If  the  pro  forma percentage rent formula would not have yielded a pro
forma annual return to us of 11.5% to 12.5% based on this calculated value, this
value  is  adjusted  either  upward or downward to produce a pro forma return of
either  11.5%  or  12.5%, as applicable.  If this final purchase price is higher
than  the  initial  purchase  price,  then  the seller of the hotel will receive
consideration  in  an  amount  equal  to  the  increase  in price.  If the final
purchase price is lower than the initial purchase price, then the sellers of the
hotel will return to us consideration in an amount equal to the difference.  Any
purchase  price adjustment will be made either in operating partnership units or
cash as determined by our Board of Trustees, including the independent trustees.
Any  operating  partnership  units issued by us or returned to us as a result of
the  purchase  price adjustment historically have been valued at $6.00 per unit.
Any future adjustments will be based upon a value per unit approved by our Board
of  Trustees,  including  our independent trustees.  The sellers are entitled to
receive  quarterly distributions on the operating partnership units prior to the
units  being  returned  to  us  in  connection  with  a  downward purchase price
adjustment.


                                       11

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[3] COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS [CONTINUED]

Before  we  implemented  the  current  pricing methodology in December 2000, our
pricing  methodology provided for repricing of a hotel if there was any variance
from  our  initial  forecasted  12% return.  We repriced three hotels under this
previous  pricing  methodology.  As  of January 1, 2000, the purchase prices for
the  Holiday  Inn,  Milesburg,  Comfort Inn, Denver and the Holiday Inn Express,
Riverfront  were  adjusted  based upon the financial results of these hotels and
their  respective  cash  flows, the properties were repriced at higher aggregate
values  of  $588,  $471  and  $351, respectively.  Based upon the $6.00 offering
price, some of our executive officers, trustees and their affiliates received an
additional  98,050,  78,427 and 58,549 units of limited partnership interest for
the  three  hotels,  respectively.  These  hotels  gave  rise  to  an additional
investment  in  hotel  properties  of  $485,  $388  and  $290,  respectively.

Some  of  our  executive  officers,  trustees  and  their  affiliates  and  the
independent  trustees have revised the return criteria upon which the repricings
are  to  occur  going  forward.  The  revised  pricing  methodology  has  been
established  in  order to ensure that we receive a minimum return of 11.5% and a
maximum  return  of  12.5%  based  upon audited results for the property and the
pre-established  percentage  lease  formulas.

We  have  acquired four hotels, since the commencement of operations, for prices
that will be adjusted on either December 31, 2002 or 2003.

Based  upon  this revised repricing formula, the purchase prices for the Hampton
Inn, Carlisle, Comfort Inn, West Hanover, Holiday Inn Express, New Columbia, and
Holiday  Inn  Express, Hershey were adjusted based upon the financial results of
the  hotels  for  the  twelve  months  ended  December 31, 2000.  Based upon the
financial  results  of  these  hotels  and  their  respective  cash  flows,  the
properties  were  repriced  at higher aggregate values of $1,083, $694, $200 and
$1,212,  respectively.  Based  upon  the  $6.00  offering  price,  some  of  our
executive  officers,  trustees  and  their  affiliates  received  an  additional
180,566,  115,657,  33,370 and 201,966 units of limited partnership interest for
the  four  hotels,  respectively.  These  hotels  gave  rise  to  an  additional
investment  in  hotel properties of $1,017, $651, $188 and $1,137, respectively.
We  also  issued  175,538  operating  partnership  units  at  a  value  equal to
approximately  $1,000  in  connection  with  the  repricing  of the Comfort Inn,
Jamaica,  New York located at John F. Kennedy International Airport prior to its
sale  in  June  2001.

The  purchase prices for the Holiday Inn Express and Suites, Harrisburg, Hampton
Inn,  Danville, and Hampton Inn and Suites, Hershey were adjusted based upon the
financial  results  of the hotels for the twelve months ended December 31, 2001.
Based  upon  the  financial  results  of  these hotels and their respective cash
flows,  the  properties were repriced at higher aggregate values of $880, $1,086
and  $35,  respectively.  Based  upon  the  $6.00  offering  price,  some of our
executive  officers,  trustees  and  their  affiliates  received  an  additional
146,649,  181,049  and 5,843 units of limited partnership interest for the three
hotels,  respectively.  These  hotels  gave  rise to an additional investment in
hotel  properties  of  $808,  $997  and  $32,  respectively.

On  February  27,  2002,  the  Board  of  Trustees  approved the purchase of the
Mainstay  Suites,  effective  as  of  January 1, 2002, based upon an agreed upon
procedures report to be completed by an independent third party accounting firm.
Upon  receipt of this report, the Board of Trustees certified the transaction on
May  15,  2002.  We  purchased  this  asset  for $5,500 plus settlement costs of
approximately $21 and leased it to HHMLP.  In conjunction with this transaction,
we  assumed mortgage indebtedness of approximately $3.1 million, assumed $800 of
related  party  debt,  and paid cash of approximately $1,600.  The consideration
for this transaction and all applicable revenue and expense recognition has been
accounted  for  as  of  January  1,  2002.

On  February 27, 2002, the Board of Trustees approved the sale of the Sleep Inn,
Corapolis,  Pennsylvania  to  some of our executive officers, trustees and their
affiliates  for  $5,500,  including  the  assumption  of approximately $3,500 in
indebtedness  and  the redemption of 327,038 limited partnership units valued at
approximately $2,000.  We initially purchased this property from these executive
officers,  trustees  and  their  affiliates  as  of  October  1, 2000 for $5,500
including  327,038  limited  partnership  units.  The  sale  of  the  Sleep Inn,
Corapolis, Pennsylvania was approved effective as of January 1, 2002, based upon
an  agreed  upon procedures report to be completed by an independent third party
accounting  firm.  Upon  receipt of this report, the Board of Trustees certified
the  transaction  on  May  15,


                                       12

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[3] COMMITMENTS AND CONTINGENCIES AND RELATED PARTY TRANSACTIONS [CONTINUED]

2002.  The  consideration  for  this  transaction and all applicable revenue and
expense recognition has been accounted for as of January 1, 2002.

On January 26, 1999, we executed an administrative services agreement with HHMLP
to  provide  accounting  and securities reporting services for the Company.  The
terms  of the agreement provided for us to pay HHMLP a fixed fee of  $55 with an
additional  $10  per  property  (prorated from the time of acquisition) for each
hotel  added  to  our  portfolio

HHMLP has reduced the administrative services fee by $75 pursuant to the revised
repricing  methodology  discussed  above.  As of June 30, 2002 and 2001, $88 and
$91  has  been  charged  to  operations,  respectively.

We  have  approved  the  lending  of  up  to  $3,000 to certain of our executive
officers  and  trustees  and  their  affiliates  to construct hotels and related
improvements  on  specific  hotel  projects at an interest rate of 12.0%.  As of
June 30, 2002 and 2001, certain of our executive officers and trustees and their
affiliates  owed  us  $2,000 and $800, respectively.  Interest income from these
advances  was  $113  and  $48  for  the six months ended June 30, 2002 and 2001,
respectively.

Our Due from Related Party balance was $2,083 as of June 30, 2002.  The June 30,
2002  balance  consisted  primarily  of  $2,000  of development line funding, as
mentioned  above.  The  remainder  of the balance of approximately $83 consisted
primarily  of  outstanding  payments  related  to  property  acquisitions  and
dispositions  between  the  related  parties  and  interest  receivable.

We  borrowed  certain  funds  from  Shreenathji  Enterprises,  Ltd.  ("SEL"), an
affiliated  company,  during  the  six months ended June 30, 2002 and 2001.  Our
total  borrowings outstanding from SEL at June 30, 2002 and 2001 were $1,012 and
$1,000.  We  borrow  from  SEL  at  a  fixed  rate of 9% per annum.  We incurred
related  party  interest  expense of $30 and $40 for the six month period ending
June  30,  2002  and  2001,  respectively.


[4] DEBT

Debt is comprised of the following at June 30, 2002 and December 31, 2001:

                                     6/30/02  12/31/01
                                     -------  --------
Mortgages Payable                    $53,388   $54,477
Revolving Credit Facility              9,124     7,058
                                     -------  --------
Total Long Term Debt                 $62,512   $61,535
                                     =======  ========

Substantially  all  of  our  long-term  debt  is  collateralized by property and
equipment  and  in  certain  situations  is  personally guaranteed by the Hersha
Affiliates.  During  March 2000, we completed a portfolio refinancing of $22,050
with  Lehman  Brothers  Bank.  We  have  repaid $15,450 of mortgages payable and
$2,000  of related party debt with proceeds from the refinancing.  The remainder
of  the  funds  was  utilized  for  acquisition  of hotel properties and general
corporate  purposes.  These  funds  are  collateralized  by  seven  of our hotel
properties.

Outstanding  borrowings under the refinancing bear interest at a annual interest
rate  of  8.94%  and  have  a total loan amortization period of 23.5 years.  The
first  eighteen  months  of  the  loan  period is structured to be interest only
financing with no principal payoff during the period.  We have incurred one-time
early prepayment penalties of $107 in connection with the portfolio refinancing.


                                       13

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[5] EARNINGS PER SHARE



                                                          THREE MONTHS ENDED       SIX MONTHS ENDED
                                                        ----------------------  ----------------------
                                                         JUNE 30,    JUNE 30,    JUNE 30,    JUNE 30,
                                                           2002        2001        2002        2001
                                                        ----------  ----------  ----------  ----------
                                                                                
Income before Minority Interest and
    Discontinued Operations                             $    1,272  $      775  $    1,586  $      867

Add:  Discontinued Operations                                   --          10          --          34

Less:  Minority Interest                                       964         540         968         540
                                                        ----------  ----------  ----------  ----------

NET INCOME FOR BASIC EARNINGS PER SHARE                 $      308  $      245  $      618  $      361
---------------------------------------                 ----------  ----------  ----------  ----------

Add:  Minority Interest                                        964         540         968         540
                                                        ----------  ----------  ----------  ----------

NET INCOME FOR DILUTED EARNINGS PER SHARE               $    1,272  $      785  $    1,586  $      901
-----------------------------------------               ==========  ==========  ==========  ==========

Weighted Average Shares for Basic Earnings Per Share     2,575,459   2,275,000   2,462,220   2,275,000

Dilutive Effect of Limited Partnership Units             5,099,722   4,954,172   5,099,722   4,963,313
                                                        ----------  ----------  ----------  ----------

WEIGHTED AVERAGE SHARES FOR DILUTED EARNINGS PER SHARE   7,675,181   7,229,172   7,561,942   7,238,313
------------------------------------------------------  ==========  ==========  ==========  ==========



Options  to  purchase 534,000 shares of Class B common shares for the six months
ended  June  30, 2002 and June 30, 2001, respectively, were outstanding but were
not  included  in  the  computation  of  diluted  earnings per share because the
options'  exercise  prices  were  greater  than  the average market price of the
common  shares  and,  therefore,  the  effect  would  be  antidilutive.

[6] DISCONTINUED OPERATIONS

On  February 27, 2002, the Board of Trustees approved the sale of the Sleep Inn,
Corapolis,  Pennsylvania  to  some of our executive officers, trustees and their
affiliates  for  $5,500,  including  the  assumption  of approximately $3,500 in
indebtedness and the cancellation of 327,038 limited partnership units valued at
approximately $2,000.  We initially purchased this property form these executive
officers,  trustees  and  their  affiliates  as  of  October  1, 2000 for $5,500
including  327,038  limited  partnership  units.  The  sale  of  the  Sleep Inn,
Corapolis, Pennsylvania was approved effective as of January 1, 2002, based upon
an  agreed  upon procedures report to be completed by an independent third party
accounting  firm.  Upon  receipt of this report, the Board of Trustees certified
the transaction on May 15, 2002.  The consideration for this transaction and all
applicable  revenue and expense recognition has been accounted for as of January
1,  2002.  We  did  not  recognize  any  gain or loss on the sale of this asset.

Total  revenues  related  to  the  asset  of  $210  and  $420  and  income  from
discontinued  operations  of $10 and $34 for the three and six months ended June
30,  2001,  respectively  are  included  in  discontinued  operations.


                                       14

================================================================================
HERSHA HOSPITALITY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
[IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS]
================================================================================


[7] UNAUDITED INTERIM INFORMATION

The  accompanying financial statements have been prepared in accordance with the
instructions to Form 10-Q and accordingly, do not include all of the disclosures
normally  required  by  generally accepted accounting principles.  The financial
information  has  been  prepared  in  accordance  with  our customary accounting
practices.  In the opinion of management, the information presented reflects all
adjustments [consisting of normal recurring accruals] considered necessary for a
fair presentation of our financial position as of June 30, 2002, and the results
of  our operations for the interim periods presented.  The results of operations
for  the  six  months  ended June 30, 2002 are not necessarily indicative of the
results  that  may  be  expected  for  the  year  ending December 31, 2002.  The
unaudited  financial statements should be read in conjunction with the financial
statements  and  footnotes thereto included in Hersha Hospitality Trust's Annual
Report  on  Form  10-K  for  the  year  ended  December  31,  2001.

[8] SUBSEQUENT EVENTS

The quarterly dividend pertaining to the second quarter of 2002 was paid on July
26,  2002 at the rate of $0.18 per share, which represents an annualized rate of
$0.72  per  annum.


                                . . . . . . . .




                                       15

                        REPORT OF INDEPENDENT ACCOUNTANT

To the Partners of
  Hersha Hospitality Management L.P.
  New Cumberland, Pennsylvania


     We  have  reviewed  the  accompanying  balance  sheet of Hersha Hospitality
Management  L.P.  as  of June 30, 2002, and the related statements of operations
for the three and six months ended June 30, 2002 and 2001 and statements of cash
flows  for  the  six  months  ended  June  30,  2002  and  2001. These financial
statements  are  the  responsibility  of  the  Company's  management.

     We  conducted  our  reviews in accordance with standards established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data  and  making  inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of  an  opinion  regarding  the financial statements taken as a
whole.  Accordingly,  we  do  not  express  such  an  opinion.

     Based  on  our reviews, we are not aware of any material modifications that
should  be  made  to the accompanying financial statements referred to above for
them  to  be  in  conformity  with  generally  accepted  accounting  principles.

     We have previously audited, in accordance with auditing standards generally
accepted  in  the  United  States  of  America,  the  balance  sheet  of  Hersha
Hospitality Management L.P., as of December 31, 2001, and the related statements
of  operations,  partners'  capital, and cash flows for the year then ended [not
presented  herein];  and  in  our  report  dated  March 8, 2002, we expressed an
unqualified  opinion  on  those  financial  statements.  In  our  opinion,  the
information set forth in the accompanying balance sheet as of December 31, 2001,
is  fairly  stated,  in  all material respects, in relation to the balance sheet
from  which  it  has  been  derived.


                                        MOORE STEPHENS, P.C.
                                        Certified Public Accountants.

New York, New York
August 1, 2002




                                       16



================================================================================
HERSHA HOSPITALITY MANAGEMENT, L.P.
BALANCE SHEETS
[IN THOUSANDS]
================================================================================


                                                           JUNE 30,      DECEMBER 31,
                                                         -------------  --------------
                                                             2002            2001
                                                         -------------  --------------
                                                                  
CURRENT ASSETS:                                           [UNAUDITED]
  Cash and Cash Equivalents                              $        334   $         222
  Accounts Receivable, less allowance for doubtful
  accounts of $144 and $230 at June 30, 2002 and
  December 31, 2001, respectively                               1,383             698
  Prepaid Expenses                                                  2              34
  Due from Related Party - HHLP                                   220              63
  Due from Related Parties                                        664           1,097
  Other Assets                                                    257             252
                                                         -------------  --------------
  TOTAL CURRENT ASSETS                                          2,860           2,366

FRANCHISE LICENSES [NET OF ACCUMULATED AMORTIZATION OF
169 AND $149 AT JUNE 30, 2002 AND DECEMBER 31, 2001,
RESPECTIVELY]                                                     273             293
PROPERTY AND EQUIPMENT                                            978           1,079
CONSTRUCTION IN PROGRESS                                            -               8
                                                         -------------  --------------

TOTAL ASSETS                                             $      4,111   $       3,746
                                                         =============  ==============

LIABILITIES AND PARTNERS' CAPITAL:
CURRENT LIABILITIES:
  Accounts Payable                                       $      1,364   $       1,278
  Accrued Expenses                                                407             268
  Other Liabilities                                               450               -
  Due to Related Party - HHLP                                      76             310
  Lease Payments Payable - Related Party - HHLP                 3,275           2,376
                                                         -------------  --------------
  TOTAL CURRENT LIABILITIES                                     5,572           4,232

COMMITMENTS                                                         -               -

ACCRUED CONTINGENT LEASE                                          459               -

PARTNERS' CAPITAL                                              (1,920)           (486)
                                                         -------------  --------------

TOTAL LIABILITIES AND PARTNERS' CAPITAL                  $      4,111   $       3,746
                                                         =============  ==============


The Accompanying Notes Are an Integral Part of This Financial Statement.


                                       17



================================================================================
HERSHA HOSPITALITY MANAGEMENT, L.P.
STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 2002 AND 2001 [UNAUDITED]
[IN THOUSANDS]
================================================================================


                                       THREE MONTHS ENDED  SIX MONTHS ENDED
                                             JUNE 30,          JUNE 30,
                                          2002     2001     2002      2001
                                         -------  ------  --------  --------
                                                        
REVENUES FROM HOTEL OPERATIONS
  Room Revenue                           $7,288   $7,692  $12,020   $13,122
  Restaurant Revenue                        672      357    1,269       796
  Other Revenue                             387      453      669       874
                                         -------  ------  --------  --------
TOTAL REVENUES FROM HOTEL OPERATIONS     $8,347   $8,502  $13,958   $14,792
                                         -------  ------  --------  --------

EXPENSES:
  Hotel Operating Expenses                2,702    2,891    5,052     5,798
  Restaurant Operating Expenses             477      307      949       659
  Advertising and Marketing                 553      490    1,072       942
  Bad Debts                                  (4)      10        -        11
  Depreciation and Amortization              65       58      129       117
  General and Administrative              1,311    1,123    2,365     1,988
  General and Admin. - Related Parties        -        9        -       434
  Lease Expense - HHLP                    3,009    2,711    5,952     5,720
                                         -------  ------  --------  --------
  TOTAL EXPENSES                         $8,113   $7,599  $15,519   $15,669
                                         -------  ------  --------  --------

NET INCOME (LOSS)                        $  234   $  903  $(1,561)  $  (877)
                                         =======  ======  ========  ========


The Accompanying Notes Are an Integral Part of This Financial Statement.


                                       18

================================================================================
HERSHA HOSPITALITY MANAGEMENT, L.P.
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED
JUNE 30, 2002 AND 2001 [UNAUDITED]
[IN THOUSANDS]
================================================================================



                                                          JUNE 30,    JUNE 30,
                                                            2002        2001
                                                         ----------  ----------
                                                               
OPERATING ACTIVITIES:
  Net (Loss)                                             $  (1,561)  $    (877)
                                                         ----------  ----------
  Adjustments to Reconcile Net Income to
  Net Cash Provided by (Used in) Operating Activities:
    Depreciation and Amortization                              129         117
  Change in Assets and Liabilities:
  (Increase) Decrease in:
    Accounts Receivable                                       (685)       (631)
    Prepaid Expenses                                            32        (163)
    Other Assets                                                (5)         13
    Due from Related Parties                                   276        (250)
  Increase (Decrease):
    Accounts Payable                                            86        (496)
    Accounts Payable - Related Party                             -         (60)
    Lease Payments Payable - HHLP                            1,358       1,152
    Advance FF&E Related Party - HHLP                           76         275
    Due to Related Parties                                    (310)        810
    Accrued Expenses                                           139         240
    Other Liabilities                                          450         (14)
                                                         ----------  ----------
  Total Adjustments                                          1,546         993
                                                         ----------  ----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES            (15)        116
                                                         ----------  ----------

INVESTING ACTIVITIES:
  Property and Equipment                                       (11)       (427)
  Franchise Licenses                                             -         (23)
                                                         ----------  ----------
NET CASH USED IN INVESTING ACTIVITIES                          (11)       (450)
                                                         ----------  ----------

FINANCING ACTIVITIES:
  Partners Capital Contribution                                138           -
                                                         ----------  ----------
NET CASH PROVIDED BY INVESTING ACTIVITIES                      138           -
                                                         ----------  ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS           112        (334)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR                  222         623
                                                         ----------  ----------
CASH AND CASH EQUIVALENTS - END OF YEAR                  $     334   $     289
                                                         ==========  ==========


The Accompanying Notes Are an Integral Part of This Financial Statement.


                                       19

================================================================================
HERSHA HOSPITALITY MANAGEMENT, L.P.
NOTES TO FINANCIAL STATEMENTS [UNAUDITED]
[IN THOUSANDS]
================================================================================


[1] ORGANIZATION

Hersha  Hospitality  Management,  L.P., ["HHMLP" or the "Lessee"], was organized
under  the  laws  of  the State of Pennsylvania in May 1998 to lease and operate
existing hotel properties from Hersha Hospitality Limited Partnership ["HHLP" or
the  "Partnership"].  The Lessee is owned by Mr. Hasu P. Shah and certain of our
other  executive  officers,  trustees  and  their  affiliates, some of whom have
ownership interests in the Partnership.  We also manage certain other properties
owned  by some of our executive officers, trustees and their affiliates that are
not owned by the Partnership as well as certain properties owned by unaffiliated
third parties.  HHMLP commenced operations on January 1, 1999 and as of June 30,
2002  leased  14  hotel  properties  from  the  Partnership.

[2] COMMITMENTS AND CONTINGENCIES

We have assumed the rights and obligations under the terms of existing franchise
licenses  relating  to  the  hotels  upon  acquisition  of  the  hotels  by  the
partnership.  The  franchise  licenses  generally  specify  certain  management,
operational,  accounting,  reporting and marketing standards and procedures with
which  the  franchisee  must  comply and provide for annual franchise fees based
upon  percentages  of  gross  room  revenues.

We  have  entered  into  percentage  lease agreements ["Percentage Leases"] with
HHLP.  Each  Percentage  Lease  has an initial non-cancelable term of five years
and may be extended for an additional five-year term at our option.  Pursuant to
the  terms  of  the Percentage Leases, we are required to pay the greater of the
base  rent  or  the  percentage  rent  for  hotels  with  established  operating
histories.  The  base rent is 6.5 percent of the purchase price assigned to each
hotel.  The  percentage  rent for each hotel is comprised of (i) a percentage of
room  revenues  up  to  a certain threshold amount for each hotel up to which we
receive a certain percentage of room revenues as a component of percentage rent,
(ii)  a  percentage  of room revenues in excess of the threshold amount, but not
more  than  a certain incentive threshold amount for each hotel in excess of the
threshold  amount  up  to  which  we  receive  a  certain percentage of the room
revenues  in  excess  of  the threshold amount as a component of percentage rent
(iii) a percentage for room revenues in excess of the incentive threshold amount
and  (iv)  a  percentage  of revenues other than room revenues.  For hotels with
limited  operating  histories,  the leases provide for the payment of an initial
fixed  rent  for  certain  periods as specified in the leases and the greater of
base  rent  or  percentage rent thereafter.  The leases commenced on January 26,
1999.

Minimum  future  lease  payments  due  during  the noncancellable portion of the
leases as of June 30, 2002 is as follows:

     December 31, 2002  $ 3,503
     December 31, 2003    5,601
     December 31, 2004    2,497
     December 31, 2005    2,011
     December 31, 2006    1,074
     Thereafter             -0-
                        -------

     TOTAL              $14,686
                        =======

On  January  26,  1999, we executed an agreement with HHLP to provide accounting
and  securities  reporting  services.  The terms of the agreement provided for a
fixed  fee of $55 with an additional $10 per property (prorated from the time of
acquisition)  for  each  hotel  added  to HHLP's portfolio.  We have reduced the
administrative  services  fee by $75 pursuant to a revised repricing methodology
between  the  Hersha  Affiliates  and  the Partnership.  As of June 30, 2002 and
2001,  $88  and  $91  has  been  earned  from  operations,  respectively.

For  the  six  months  ended June 30, 2002 and 2001 we incurred lease expense of
$5,952 and $5,720, respectively.  As of June 30, 2002 and 2001 the amount due to
the Partnership for lease payments was $3,275 and $2,376, respectively.


                                       20

================================================================================
HERSHA HOSPITALITY MANAGEMENT, L.P.
NOTES TO FINANCIAL STATEMENTS [UNAUDITED]
[IN THOUSANDS]
================================================================================


[4] UNAUDITED INTERIM INFORMATION

The  accompanying financial statements have been prepared in accordance with the
instructions to Form 10-Q and accordingly, do not include all of the disclosures
normally  required  by  generally accepted accounting principles.  The financial
information  has  been  prepared  in  accordance  with  the  Lessee's  customary
accounting  practices.  In  the opinion of management, the information presented
reflects  all  adjustments  [consisting of normal recurring accruals] considered
necessary  for a fair presentation of our financial position as of June 30, 2002
and  the  results  of  our  operations  for  the interim periods presented.  The
results  of  operations  for  the  six  months  ended  June  30,  2002,  are not
necessarily  indicative  of the results that may be expected for the year ending
December  31,  2002.  The  unaudited  financial  statements  should  be  read in
conjunction  with  the  financial  statements  and footnotes thereto included in
Hersha  Hospitality  Trust's  Annual  Report  on  Form  10-K  for the year ended
December  31,  2001.



                                . . . . . . . .




                                       21

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of  Operations

     All  statements contained in this section that are not historical facts are
based  on  current  expectations.  This  includes  statements regarding our 2002
anticipated  revenues,  expenses  and  returns, and future capital requirements.
Words  such  as  "believes",  "expects",  "anticipates",  "intends", "plans" and
"estimates"  and  variations  of  such  words  and  similar  words also identify
forward-looking  statements.  Such  statements are forward-looking in nature and
involve a number of risks and uncertainties, including the risks described under
the  caption "Risk Factors" in our registration statement on Form S-11 (File No.
333-56087).  Our  actual  results  may differ materially.  We caution you not to
place  undue  reliance  on  any  such  forward-looking statements.  We assume no
obligation  to  update  any  forward-looking  statements  as  a  result  of  new
information,  subsequent  events  or  any  other  circumstances.

     Hersha Hospitality Trust was formed in May 1998 to own initially ten hotels
in Pennsylvania and to continue the hotel acquisition and development strategies
of  Hasu  P. Shah, Chairman of the board of trustees and Chief Executive Officer
of our Company.  We are a self-advised Maryland real estate investment trust for
federal  income  tax  purposes.

     We  completed  an  initial  public  offering  of two million of our Class A
Priority  Common  Shares  at $6.00 per share and commenced operations on January
26,  1999.  On  February 5, 1999, we sold an additional 275,000 Class A Priority
Common Shares pursuant to an over allotment option granted to the underwriter in
our initial public offering. During the quarter ended March 31, 2002, we sold an
additional  300,000  Class A Priority Common Shares. Our Priority Class A Common
Shares  are  traded  on  the  American  Stock  Exchange  under  the symbol "HT."

     We  contributed  substantially  all  of  the  net proceeds from our initial
public  offering  to  our  operating  partnership subsidiary, Hersha Hospitality
Limited  Partnership, of which we are the sole general partner. We currently own
a  33.6%  partnership  interest  in  that  partnership. With the proceeds of our
initial  public  offering,  we  caused  the partnership to acquire ten hotels in
exchange for (i) 4,032,431 subordinated units of limited partnership interest in
the partnership that are redeemable for the same number of Class B Common Shares
with a value of approximately $24.2 million based on the initial public offering
price, and (ii) the assumption of approximately $23.3 million of indebtedness of
which approximately $6.1 million was repaid immediately after the acquisition of
the  hotels.

Since  the  completion  of  the  initial  public  offering,  we  have  issued an
additional  173,539 units of limited partnership interest in connection with the
acquisition of the Hampton Inn, Danville, PA and 76,555 units in connection with
the  acquisition  of  the  Holiday  Inn Express, Long Island City.  We have also
issued  an  additional  1,275,662  units  of  limited  partnership  interest  in
connection  with  final  settlement of the purchase prices of several hotels and
have  redeemed  458,465 units of limited partnership interest in connection with
the  sale  of  certain hotels.  The total number of units of limited partnership
interest  outstanding  as of June 30, 2002 and 2001 was 5,099,722 and 5,071,840,
respectively.

     We  have  acquired  four  hotels, since the commencement of operations, for
prices that will be adjusted at either December 31, 2002 or 2003.

     The  initial  purchase  price  for  each  of  these  hotels  was based upon
management's  projections  of  the  hotel's  performance  for  one  or two years
following  our  purchase.  The leases for these hotels provide for fixed initial
rent  for  the  one  or  two-year  adjustment period that provides us with a 12%
annual yield on the initial purchase price, net of certain expenses.  At the end
of  the one or two-year period, we calculate a value for the hotel, based on the
actual  net  income  during the previous twelve months, net of certain expenses,
such that it would have yielded a 12% return.  We then apply the percentage rent
formula  to  the hotel's historical revenues for the previous twelve months on a
pro  forma  basis.  If  the  pro  forma  percentage  rent formula would not have


                                       22

yielded  a  pro  forma  annual  return  to  us  of  11.5% to 12.5% based on this
calculated  value, this value is adjusted either upward or downward to produce a
pro  forma  return  of  either  11.5%  or  12.5%,  as applicable.  If this final
purchase price is higher than the initial purchase price, then the seller of the
hotel  will  receive  consideration in an amount equal to the increase in price.
If  the  final purchase price is lower than the initial purchase price, then the
sellers  of  the hotel will return to us consideration in an amount equal to the
difference.  Any  purchase  price  adjustment  will  be made either in operating
partnership  units or cash as determined by our Board of Trustees, including the
independent  trustees.  Any operating partnership units issued by us or returned
to us as a result of the purchase price adjustment historically have been valued
at  $6.00  per unit.  Any future adjustments will be based upon a value per unit
approved  by  our  Board  of  Trustees, including our independent trustees.  The
sellers  are  entitled  to  receive  quarterly  distributions  on  the operating
partnership  units  prior to the units being returned to us in connection with a
downward  purchase  price  adjustment.

     On  February  27,  2002, the Board of Trustees approved the purchase of the
Mainstay  Suites,  effective  as  of  January 1, 2002, based upon an agreed upon
procedures report to be completed by an independent third party accounting firm.
Upon  receipt of this report, the Board of Trustees certified the transaction on
May  15,  2002.  We  purchased  this  asset  for $5,500 plus settlement costs of
approximately  $21 and leased it to HHMLP. In conjunction with this transaction,
we  assumed mortgage indebtedness of approximately $3.1 million, assumed $800 of
related party debt, and paid cash of approximately $1,600. The consideration for
this  transaction  and  all  applicable revenue and expense recognition has been
accounted  for  as  of  January  1,  2002.

     On  February 27, 2002, the Board of Trustees approved the sale of the Sleep
Inn,  Corapolis,  Pennsylvania  to  some of our executive officers, trustees and
their affiliates for $5,500, including the assumption of approximately $3,500 in
indebtedness  and  the redemption of 327,038 limited partnership units valued at
approximately  $2,000. We initially purchased this property from these executive
officers,  trustees  and  their  affiliates  as  of  October  1, 2000 for $5,500
including  327,038  limited  partnership  units.  The  sale  of  the  Sleep Inn,
Corapolis, Pennsylvania was approved effective as of January 1, 2002, based upon
an  agreed  upon procedures report to be completed by an independent third party
accounting  firm.  Upon  receipt of this report, the Board of Trustees certified
the  transaction on May 15, 2002. The consideration for this transaction and all
applicable  revenue and expense recognition has been accounted for as of January
1,  2002.

     As  of  August 1, 2002, we owned five Hampton Inn hotels, one Hampton Inn &
Suites  hotel,  one Holiday Inn hotel, one Holiday Inn Express and Suites hotel,
four  Holiday  Inn  Express  hotels,  one  Comfort Inn hotel, one Comfort Suites
hotel,  two  Mainstay  Suites hotels, one Sleep Inn hotel and one Clarion Suites
hotel,  which  contain  an  aggregate  of  1,580  rooms.

RESULTS OF OPERATIONS, SIX MONTHS ENDED JUNE 30, 2002 COMPARED TO JUNE 30, 2001
($'s in thousands)

     Our revenues for the six months ended June 30, 2002 and 2001, substantially
consisted  of  percentage  lease  revenues recognized pursuant to the percentage
leases.  Percentage  lease  revenues  during the six month period ended June 30,
2002  were $6,894 an increase of $747, or 10.8%, as compared to percentage lease
revenues  of  $6,147  for the same period during 2001.  The improvement in lease
revenues  is  primarily  attributable  to  additional  percentage lease revenues
derived  from  the Holiday Inn New Cumberland, Hampton Inn & Suites, Hershey and
other  existing  properties  and  from  a  full  six months of operations at the
Mainstay  Suites  and  Sleep  Inn,  King of Prussia that was acquired on June 1,
2001.

     Percentage  lease  revenues  from  continuing operations were also slightly
higher  for the six months ended June 30, 2002 due to the sale of the Sleep Inn,
Corapolis  effective  January  1, 2002. Total revenues related to the Sleep Inn,


                                       23

Corapolis  of  $420  and  income from discontinued operations of $34 for the six
months  ended June 30, 2001, are included in discontinued operations.

     Net  income  increased  by  $257 or 71.2% to $618, for the six months ended
June 30, 2002 as compared to net income of $361 for the same period during 2001.
The  increase  in  net  income  is  primarily  attributable  to  an  increase in
percentage  lease  revenues  in  addition  to a decrease in interest expense and
depreciation  expense. The increase in net income was partially offset by higher
general  and  administrative  expenses  during  the  period.

     HHMLP's  room  revenues  from  the  hotels decreased by $1,102, or 8.4%, to
$12,020  for  the six months ended June 30, 2002, as compared to $13,122 for the
same  period  in 2001.  This decrease in revenues is primarily attributable to a
decrease in the number of hotel properties leased and managed during the period.
Room  revenues  were slightly offset by an increase in occupancies from 55.3% to
59.1%  and  a  increase  in  revenues  per available room from $39.89 to $44.21.

     The  Lessee  maintains  the  ability to borrow funds from related entities,
partners  and  shareholders.  The  Lessee's  borrowing  costs range from 8.5% on
short-term  loans  to  10.5%  on  longer  term  loans.

     The  following  table  shows  certain  other  information  for  the periods
indicated.

                                      SIX MONTHS ENDED
                                          JUNE 30,
                                     2002          2001
                                 ------------  ------------
          Occupancy rate                59.1%         55.3%
          ADR                        $ 74.75       $ 72.17
          REVPAR                     $ 44.21       $ 39.89
          Room revenue            12,019,948    13,122,235
          Room nights available      271,870       328,964
          Room nights occupied       160,807       181,831
          Rooms available              1,580         1,817

RESULTS OF OPERATIONS, THREE MONTHS ENDED JUNE 30, 2002 COMPARED TO JUNE 30,
2001 ($'s in thousands)

     Our  revenues  for  the  three  months  ended  June  30,  2002  and  2001,
substantially  consisted of percentage lease revenues recognized pursuant to the
percentage  leases.  Percentage  lease  revenues  during  the three month period
ended  June  30,  2002 were $3,975 an increase of $582, or 17.2%, as compared to
percentage  lease  revenues  of  $3,393  for  the  same  period  during  2001.

     The  improvement  in lease revenues is primarily attributable to additional
percentage  lease  revenues derived from the Holiday Inn New Cumberland, Hampton
Inn & Suites, Hershey and other existing properties and from a full three months
of  operations  at  the  Mainstay Suites and Sleep Inn, King of Prussia that was
acquired  on  June  1,  2001.

     Lease  revenues  were  slightly  higher  for  several properties due to the
methodology  change in percentage lease revenue recognition versus straight-line
revenue  recognition.  The  Holiday  Inn Express and Suites, Harrisburg, Hampton
Inn,  Danville  and  Hampton  Inn  & Suites, Hershey were repriced on January 1,
2002.  These  properties  now  receive  percentage  lease  revenues based upon a
percentage  lease formula. During each quarter of the fiscal year ended December
31,  2001,  all of these properties received an equivalent amount of fixed lease
revenues although the properties were seasonal in nature. Due to the seasonality
of  the hotels that were repriced, we will receive a higher portion of the total
lease  payments  during  the  second and third quarters and lower lease revenues
during  the  first  and  fourth  quarters.


                                       24

     Percentage  lease  revenues  from  continuing operations were also slightly
higher  for  the  three  months ended June 30, 2002 due to the sale of the Sleep
Inn,  Corapolis  effective  January 1, 2002. Total revenues related to the Sleep
Inn,  Corapolis  of  $210 and income from discontinued operations of $10 for the
three  months  ended  June  30,  2001,  are included in discontinued operations.

     Net  income  increased  by $63 or 25.7% to $308, for the three months ended
June 30, 2002 as compared to net income of $245 for the same period during 2001.
The  increase in net income is primarily attributable to higher percentage lease
revenues  as  described  above, and decreased increased expense.  Net income was
slightly  offset  by  higher  General  and  Administrative  expenses  during the
period.

     HHMLP's room revenues from the hotels decreased by $404, or 5.3%, to $7,288
for  the  three  months  ended June 30, 2002, as compared to $7,692 for the same
period  in  2001.

     This  decrease  in  revenues is primarily attributable to a decrease in the
number  of hotel properties leased and managed during the period.  Room revenues
were  slightly  offset  by  an increase in occupancies from 62.8% to 69.1% and a
increase in revenues per available room from $47.63 to $54.03.

     HHMLP maintains the ability to borrow funds from related entities, partners
and  shareholders.  The  Lessee's  borrowing costs range from 8.5% on short-term
loans  to  10.5%  on  longer  term  loans.

     The  following  table  shows  certain  other  information  for  the periods
indicated.

                                    THREE MONTHS ENDED
                                         JUNE 30,
                                    2002         2001
                                 -----------  -----------
          Occupancy rate               69.1%        62.8%
          ADR                       $ 78.16      $ 75.83
          REVPAR                    $ 54.03      $ 47.63
          Room revenue            7,288,213    7,692,048
          Room nights available     134,890      161,474
          Room nights occupied       93,246      101,439
          Rooms available             1,580        1,775

LIQUIDITY AND CAPITAL RESOURCES

     Our  principal  source  of  cash  to  meet our cash requirements, including
distributions to shareholders, is our share of the Partnership's cash flow.  The
Partnership's  principal source of revenue is rent payments under the percentage
leases  with  HHMLP  and  Noble.  The  lessee's obligations under the leases are
unsecured.  The  lessee's  ability  to  make  rent  payments, and our liquidity,
including our ability to make distributions to common shareholders, is dependent
on  the  lessee's ability to generate sufficient cash flow from the operation of
the  hotels.

     We  note  that  industry  analysts  and investors use Funds From Operations
("FFO")  as  a  tool to compare equity REIT performance.  In accordance with the
resolution adopted by the Board of Governors of the National Association of Real
Estate Investments Trusts ("NAREIT"), FFO represents net income (loss) (computed
in  accordance  with  generally accepted accounting principles), excluding gains
(or losses) from debt restructuring or sales of property, plus depreciation, and
after  adjustments  for unconsolidated partnerships and joint ventures.  FFO was
$3,662  in  the six months ended June 30, 2002, which is an increase of $546, or
17.5% over FFO in the comparable period in 2001, which was $3,116.  The increase
in  FFO  can  be  attributed  to  increased lease revenues and decrease interest
expense  costs  as  mentioned  above.


                                       25

     FFO  presented  herein  is  not  necessarily comparable to FFO presented by
other  real  estate companies due to the fact that not all real estate companies
use  the same definition.  However, our FFO is comparable to the FFO of the real
estate  companies  that  use  the  current  definition  of  NAREIT.

     We  expect  to meet our short-term liquidity requirements generally through
net  cash  provided  by  operations,  existing  cash balances and, if necessary,
short-term  borrowings  under a secured line of credit.  We believe that our net
cash provided by operations will be adequate to fund both operating requirements
and  payment  of  dividends  by  us  in  accordance  with  REIT  requirements.

     We  expect  to meet our long-term liquidity requirements, such as scheduled
debt  maturities  and  property  acquisitions,  through  long-term  secured  and
unsecured  borrowing,  the  issuance  of  additional  equity  securities  of the
Company,  or,  in  connection with acquisitions of hotel properties, issuance of
Units  in  the  Partnership.

     We intend to make additional investments in hotel properties and may incur,
or  cause  the Partnership to incur, indebtedness to make such investments or to
meet distribution requirements imposed on a REIT under the Internal Revenue Code
to  the  extent  that  working  capital  and  cash flow from our investments are
insufficient  to  make  such distributions.  Our policy is to limit consolidated
indebtedness  to  less  than 67% of the total purchase prices paid by us for the
hotels  in which we have invested.  However, our organizational documents do not
limit the amount of indebtedness that the we may incur and our board of trustees
may  modify  the  debt  policy  at  any  time  without  shareholder  approval.

     The hotel business is seasonal, with hotel revenue generally greater in the
second  and third quarters than in the first and fourth quarters.  To the extent
that  cash  flow from operating activities is insufficient to provide all of the
estimated  quarterly  distributions,  we anticipate that we will be able to fund
any  such  deficit  from  future  working  capital.

INFLATION

     Operators  of  hotels  in  general possess the ability to adjust room rates
quickly.  However, competitive pressures may limit the lessee's ability to raise
room rates in the face of inflation, and annual increases in average daily rates
have  failed  to  keep  pace  with  inflation.

SEASONALITY

     Our  hotels'  operations  historically  have  been  seasonal  in  nature,
reflecting  higher  occupancy  rates during the second and third quarters.  This
seasonality can be expected to cause fluctuations in our quarterly lease revenue
to  the  extent  that  we  receive  percentage  rent.

SUBSEQUENT EVENTS

     The quarterly dividend pertaining to the second quarter of 2002 was paid on
July  26,  2002 at the rate of $0.18 per share and represents an annualized rate
of  $0.72  per  annum.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Pursuant  to  the  general  instructions to Item 305 of Regulation S-K, the
quantitative  and  qualitative disclosures called for by this Item 3 and by Rule
305  of  Regulation  S-K  are  inapplicable  to  our  Company  at  this  time.


                                       26

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

     None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

ITEM  5.  OTHER  INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) EXHIBITS

         None.

     (b) REPORTS ON FORM 8-K

         We  did not file any reports on Form 8-K during the quarter ended June
         30, 2002.


                                       27

                                   SIGNATURES

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
registrant  has  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

                                        HERSHA HOSPITALITY TRUST



August 14, 2002                         /s/ Ashish R. Parikh
                                        --------------------
                                        Ashish R. Parikh
                                        Chief Financial Officer




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