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      CNL Hotels & Resorts, Inc. Comment Letter

    September
      30, 2005

    VIA
      EDGAR AND FEDERAL EXPRESS

    Ms.
      Linda
      van Doorn

    Senior
      Assistant Chief Accountant

    United
      States Securities and Exchange Commission

    450
      Fifth
      Street N.W.

    Washington,
      D.C. 20549

              Re:

              CNL
                Hotels & Resorts, Inc. Form 10-K for the Fiscal Year Ended December
                31, 2004; File No.
                001-32254

    Dear
      Ms.
      van
      Doorn:

    On
      behalf
      of CNL Hotels & Resorts, Inc. (“CHR”) I am writing in response to your
      letter to Mr. C. Brian Strickland, dated September 16, 2005 (the ‘Comment
      Letter’), providing comments on the Form 10-K for CHR for the fiscal year ended
      December 31, 2004, filed with the Securities & Exchange Commission (the
“Commission”) on March 16, 2005 (the “Form 10-K”). We understand and appreciate
      the purpose of your review is to assist us in our compliance with applicable
      disclosure requirements and to enhance the overall disclosures in our filing.
      We
      welcome this process and look forward to working with you in satisfying this
      purpose. We supplementally advise the Staff as follows, with the numbered
      responses below corresponding to the numbered comments in your Comment Letter
      which is attached:

    1.     Item
      6.  Selected
      Financial Data

    The
      following table provides for the fiscal years ended December 31, 2004, 2003,
      2002, 2001 and 2000 an analysis of our distributions to shareholders, and our
      cash flows from operations, for the applicable periods as presented on page
      32
      of our Form 10-K.

              Total

              2004

              2003

              2002

              2001

              2000

              Cash
                flows from operations

              505,320

              213,714

              112,887

              76,660

              58,408

              43,651

              Cash
                distributions declared

              499,012

              218,343

              129,961

              74,217

              48,409

              28,082

              Difference

              6,308

              (4,629

              )

              (17,074

              )

              2,443

              9,999

              15,569

    We
      believe the appropriate place to disclose the source of cash to fund our
      distributions is in MD&A. Item 7 MD&A, page 63 under “Distributions,”
      identified the alternative source of cash as borrowings. Item 301 of Regulation
      S-K indicates that the “purpose of the selected financial data shall be to
      supply… selected financial data which highlight certain significant trends in
      the registrant’s financial condition and results of operations.” We believe our
      presentation under Item 6 in our Form 10-K is compliant with the aforementioned
      regulation in that we provide the required items and present such items that
      we
      believe enhance the understanding of and/or highlight trends in our financial
      condition and results of operations.

      Linda
        van
        Doorn

      September
        30, 2005

      Page
        2

    In
      addition to disclosing
      the alternative sources for funding our distributions to shareholders in our
      Form 10-K, we have also included risk factors relating to such borrowings under
      Item 1 Business of our Form 10-K under the sub-heading Risk
      Factors
      (beginning on page 8) where we discuss the use of borrowings for distributions
      under the following sub-categories of risk and in which we reference the risk
      factor discussed in italics:

    Page
      8 Risks
      Related to our Business and Operations

            ·

              Our
                ability to obtain funds through borrowings may adversely impact our
                ability to make distributions.

            ·

              Decreased
                funding from credit enhancements may adversely affect our distributions
                to
                stockholders.

    Page
      17
      Risks Related to Borrowing

            ·

              Our
                current debt level reduces funds available to distribute to our
                stockholders and may expose us to risk of default under debt
                obligations.

            ·

              Increases
                in interest rates and/or the failure of our interest rate protection
                arrangements to reduce our interest rate volatility may increase
                our
                interest expense and adversely affect our cash flow and our ability
                to
                service our indebtedness and make distributions to our
                stockholders.

    2.     Item
      6.  Selected
      Financial Data

    The
      last
      sentence of footnote 4 of Item 6 Selected Financial Data, on page 35 of our
      Form
      10-K discloses that "[w]e have not treated such amounts as a return of capital
      for purposes of calculating the stockholders' return on their invested capital
      as a GAAP basis calculation would not be appropriate for this purpose." The
      reference to "return of capital" in this sentence does not relate to "return
      of
      capital" under GAAP or a tax basis, but rather the return of “Invested Capital”
      which is a defined term in our Articles of Amendment and Restatement, as amended
      (the “Charter”). The return of invested capital cited above in footnote 4
      relates to a preferred return (the "Preferred Return") to our stockholders
      under
      our Charter, consisting of the sum of (i) the stockholders' 8%
      Return
      *
      and (ii)
      100% of Invested Capital. Prior to the payment of certain fees under the
      Charter, our stockholders must first receive their Preferred Return. "Invested
      Capital" is calculated pursuant to a definition in the Charter which requires
      that, among other things, "Invested Capital" be reduced "by the portion of
      any
      Distribution that is attributable to Net Sales Proceeds." Since none of the
      distributions reported in our Form 10-K resulted from Net Sales Proceeds,
      "Invested Capital" for purposes of determining the Preferred Return was not
      reduced by any amount of such distributions. Accordingly, the purpose of the
      disclosure in the last sentence of footnote 4 set forth above was to inform
      our
      investors that none of the distributions that they received would reduce the
      amount of invested capital on which the Preferred Return was based.

      Linda
        van
        Doorn

      September
        30, 2005

      Page
        3

    3.     Footnote
      #23  Credit
      Enhancements

    CHR
      has
      entered into various agreements (the “Credit Enhancement Agreements”) with
      third-party hotel operators (each the “Manager”) concurrent and in connection
      with the execution of long-term Hotel Management Agreements (each the
“Management Agreement”) with each such Manager. In footnote #2 to our financial
      statements,” Summary of Significant Accounting Policies” page 86 of our Form
      10-K (“Footnote #2”) we describe the various types of Credit Enhancement
      Agreements. The following is an excerpt from this disclosure describing one
      of
      the various agreements which we refer to as Threshold Guarantees:

    “Threshold
      Guarantees (“TG”) are provided by the [Manager] to the Company in order to
      guarantee a certain minimum return for each of the properties covered by the
      TG.
      Generally, each TG is available for a specific Property or pool of Properties.
      Funding under these guarantees is recorded as a reduction in operating expenses,
      a reduction in hotel and resort management fees or as liabilities by the
      Company, depending upon the nature of each agreement and whether the funded
      amounts are required to be repaid by the Company.”

    Our
      response will focus only on those aforementioned Threshold Guarantees (“TG”),
      which coincide with the accounting treatment addressed in your Comment Letter.
      As disclosed and noted above, under the TG arrangements, the Manager would
      fund
      an amount to CHR to cover periodic operating shortfalls of the hotel (the
“Shortfall Amount”). Typically, funding under the TG is provided during the
      beginning years of the Management Agreement and is attributable to the period
      of
      stabilization at a property (or pool of properties) due to, among other
      things,
      the
      change in Manager and/or change in branding. The periodic Shortfall Amount
      is
      typically defined in the Management Agreement as the shortfall between a
      predefined minimum return to CHR and the actual Operating Profit, also defined
      in the Management Agreement, of the hotel during each period.

    *
      Defined
      terms used but not otherwise defined in this response to Question #2 to the
      Comment Letter shall have the meanings ascribed to such terms in the
      Charter.

          Linda
            van
            Doorn

          September
            30, 2005

          Page
            4

      Generally,
        the funds under TG arrangements are available to cover operating shortfalls
        during a specified period of time or until the maximum amount of the guarantee
        is utilized. In certain of the TG arrangements the funding amount paid by
        the
        Manager is specifically stipulated as a reduction of the management fee paid
        to
        such Manager while in the others there is no such stipulation.

    The
      basis
      for recognizing funding under the TGs as a reduction of management fee expenses
      or otherwise as a contra-expense in the determination of operating profit is
      in
      accordance with Emerging Issues Task Force (“EITF”) 02-16, “Accounting by a
      Reseller for Cash Consideration Received from a Vendor.” In EITF 02-16 the Task
      Force consensus determined that vendor allowances received by a customer should
      be presumed to be a reduction of the prices of the vendor’s products or services
      and therefore reduce product or service cost when recognized in the customer’s
      income statement. Our interpretation of EITF 02-16 determined that CHR (as
      customer) was receiving a reduction in the cost of the products and services
      provided by the Manager (as vendor). For TGs in which the contractual agreement
      specifically calls for the funding under the agreement to reduce management
      fees
      we have recognized such funding as a reduction of the stipulated service cost.
      For TGs which do not stipulate such specific reduction in the cost of the
      products and/or services provided by the Manager we have recognized the funded
      amounts as a contra-expense in our income statement. Our presentation as a
      contra-expense was, in part, intended as a means to ensure transparency of
      these
      agreements and the impact of funding under these agreements on the overall
      cost
      of operating our properties (which include the specific cost of sales for our
      revenue streams (e.g., rooms, food & beverage, and other as well as the
      other property operating costs). EITF 02-16 effectively anticipates that the
      customer’s recognition of any vendor rebate would be reflected in cost of sales
      which typically is a single line item. As we previously referenced, the
      components of our cost of sales, specifically as it pertains to the services
      rendered by the Manager (vendor), are reflected in multiple line items in our
      statement of operations. Consequently, we believe the presentation as a
      contra-expense properly distinguishes the TG funding relative to our multiple
      components of cost of sales.

    As
      disclosed in Footnote #2, we recognize such amounts under the TG arrangements
      when funded and when CHR has no further obligations relating to the funded
      amounts including future performance or repayment.

    In
      Footnote #2, we use the term “credit enhancement” to encompass broadly the
      various structures to our contractual arrangements with Managers in which
      Managers, pursuant to various arrangements, provide us with funds directly
      to
      CHR or indirectly to our unconsolidated subsidiaries for the purpose of ensuring
      a specified minimum return at the property or pool of properties managed on
      our
      behalf.

    Linda
      van
      Doorn

    September
      30, 2005

    Page
      5

    The
      caption and
      phrase is used for convenience to describe these arrangements and we
      have
      used the term, “credit enhancement”, historically in our filings to describe
      these varying arrangements. We believe the use of the term “credit enhancement”
      has been used by other entities in the lodging and Real Estate Investment Trust
      industry to make reference to similar agreements or provisions of a management
      agreement whereby a third-party provides some element of financial credit risk
      mitigation.

    * * * * *

    Pursuant
      to your Comment Letter please note the following acknowledgement from CHR:

            ·

              CHR
                is responsible for the adequacy and accuracy of the disclosures made
                in
                our Form 10-K;

            ·

              CHR
                recognizes that Staff comments or changes to disclosure in response
                to
                Staff comments do not foreclose the Commission from taking any action
                with
                respect to such filing; and

            ·

              CHR
                recognizes that we may not assert Staff comments as a defense in
                any
                proceeding initiated by the Commission or any person under the federal
                securities laws of the United States.

    Should
      you have any questions, you can contact me at (407) 540-2563, or alternatively
      at mpatten@cnlchc.com.

    Very
      truly yours,

    /s/
      Mark
      E. Patten

    Mark
      E.
      Patten

    Senior
      Vice President and Chief Accounting Officer

    CNL
      Hotels & Resorts, Inc.

                cc:

                Robert
                  Telewicz, Staff Accountant of the Securities and Exchange
                  Commission

                C.
                  Brian Strickland, Chief Financial Officer, CNL Hotels & Resorts,
                  Inc.

                Judith
                  Fryer, Esq., Greenberg Traurig,
                  LLP