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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2007

Commission file number: 001-32279

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

(Exact name of registrant specified in its charter)

100 E. RiverCenter Blvd., Suite 480, Covington, KY

(Address of principal executive office)

41011

(Zip Code)

(859) 581-5900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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  ¨

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer” and “accelerated filer” in Rule 12b-2 of the Securities Exchange Act (check one):

Large Accelerated Filer  ¨    Accelerated Filer  x    Non-Accelerated Filer  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).    Yes  ¨    No  x

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EAGLE HOSPITALITY PROPERTIES TRUST, INC.

QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2007

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PART I

EAGLE HOSPITALITY PROPERTIES TRUST, INC.

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2007 AND DECEMBER 31, 2006

($000’s omitted)

See notes to consolidated financial statements

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EAGLE HOSPITALITY PROPERTIES TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS and COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006

(unaudited, 000’s omitted, except per share amounts)

See notes to consolidated financial statements

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EAGLE HOSPITALITY PROPERTIES TRUST, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2007

(unaudited, $000’s Omitted)

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EAGLE HOSPITALITY PROPERTIES TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended March 31, 2007 and 2006

(unaudited, $000’s omitted)

See notes to consolidated financial statements

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EAGLE HOSPITALITY PROPERTIES TRUST, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007 (unaudited)

1. BACKGROUND

Eagle Hospitality Properties Trust, Inc., a Maryland corporation (together with its subsidiaries “Eagle”, “Company”, “We”, “Us” or “Our”), is a self-advised real estate investment trust (“REIT”) formed to pursue investment opportunities in the full-service and all-suites hotel industry. As of March 31, 2007, Eagle’s portfolio consists of thirteen full-service and all-suites hotels under the Embassy Suites, Marriott, Hilton and Hyatt brands.

The Company commenced its operations effective as of October 1, 2004 when it completed its initial public offering (“IPO”) and acquired a 100% interest in eight hotels and a 49% interest in one other hotel (Embassy Suites Cincinnati–RiverCenter), all of which were previously owned or controlled by Corporex Companies LLC (“Corporex” or “Predecessor”). The remaining 51% in this hotel was acquired on December 5, 2005 for 427,485 operating partnership units.

Our operating partnership, EHP Operating Partnership, L.P. (“EHP OP” or “the operating partnership”), was organized as a limited partnership under the laws of the state of Maryland. The Company is the sole general partner of and owns approximately 75% of the limited partnership units in EHP OP. Limited partners (including certain of our officers and directors) own the remaining operating partnership units. After one year from the date the units are issued, limited partners may generally redeem each unit for the cash value of one share of our common stock or, at our sole option, one share of common stock.

Taxable REIT Subsidiaries

EHP TRS Holding Co., Inc. (“EHP TRS”), our taxable REIT subsidiary, was incorporated as a Maryland corporation. Each of our hotel properties, except the Embassy Suites San Juan Hotel, is leased to a wholly owned subsidiary of EHP TRS, which engages independent hotel management companies to manage and operate the hotels under management contracts. Lease revenue from EHP TRS and its wholly owned subsidiaries is eliminated in consolidation. Under applicable REIT tax rules, neither we nor our operating partnership can directly undertake the daily management activities of our hotels. Therefore, our principal source of funds is dependent on EHP TRS’s ability to generate cash flow from the operation of the hotels. EHP TRS pays income taxes at regular corporate rates on its taxable income. The Embassy Suites San Juan is leased to an unaffiliated lessee and the only income that we recognize in relation to this hotel is the lease income paid by the lessee.

2. BUSINESS COMBINATIONS

On February 24, 2005, we completed the acquisition of the 270-room Embassy Suites Phoenix-Scottsdale for $33.1 million. This hotel is managed by Commonwealth Hotels, Inc. (“Commonwealth Hotels”).

On June 23, 2005, we completed the acquisition of the 351-room Hilton Glendale in Glendale, California (“Hilton Glendale”) for $77.5 million. The previous owner of the Hilton Glendale had a loan with the Glendale Redevelopment Agency (“GRA”). This loan had a participating feature in which the GRA would receive 1.5% of revenues above certain thresholds through 2018 and 2.0%, thereafter. Although the loan was paid off by the previous owner at the time we purchased the hotel we remain subject to the participating feature though we do not anticipate the participation payments to materially affect our financial statements in the near term. This hotel is managed by Hilton Hotels Corporation.

On June 28, 2005, we completed the acquisition of the 299-room Embassy Suites San Juan Hotel and Casino in Isla Verde Carolina, Puerto Rico for $60.2 million. This hotel is leased to a third party tenant who pays a monthly base rent of $574,000 (effective January 2007, previously the monthly base rent was $450,000), plus additional rent based upon hotel revenues. This hotel is managed by Hilton Hotels Corporation.

On July 21, 2006, we completed the acquisition of the 273-room Embassy Suites Boston at Logan International Airport for $53.4 million. The hotel is subject to a 90-year ground lease. This hotel is managed by Prism Hotels & Resorts. The allocation of the purchase price is preliminary. This acquisition was funded via our $110 million unsecured credit facility, having an interest rate of 200 basis points over 30-day LIBOR. The credit facility was also amended to delay the phase-in of a stricter financial covenant to provide us with balance sheet

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flexibility during 2006 and the first quarter of 2007. Effective with this amendment, our senior unsecured credit facility now requires that the ratio of our total liabilities to total asset value as defined in the agreement not exceed 58% through December 31, 2006, 55% from the period January 1, 2007 through March 31, 2007 and 53% thereafter.

The accompanying consolidated financial statements include the results of the acquired hotels since the dates of acquisition. The purchase prices were the result of arms’ length negotiations, and Eagle did not assign any value to goodwill or other intangible assets. However, the purchase price allocation for the Embassy Suites Boston at Logan International Airport is preliminary and subject to further internal review. Additional adjustments are unlikely to have a material impact.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Included in the consolidated financial statements are Eagle’s operating entities (“TRS”), the limited liability companies that own the hotel properties and EHP OP.

These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. Eagle believes that all adjustments, consisting of normal recurring adjustments and accruals, considered necessary for a fair presentation have been included. In addition, Eagle’s operations have historically been seasonal as certain properties experience higher occupancy rates during the different months of the year. This seasonality pattern can be expected to cause fluctuations in Eagle’s operating results. Consequently, operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.

Revenue Recognition — Hotel revenues, including room, food, beverage and other hotel revenues, are recognized as the related services are delivered. We generally consider accounts receivable to be fully collectible. If we determine that amounts are uncollectible, which would generally be the result of a customer’s bankruptcy or other economic downturn, such amounts will be charged against operations when that determination is made. The lease income generated by the lease on the Embassy Suites San Juan is recognized as earned.

Investment in Hotel Properties — The initial nine hotel properties are stated at the Predecessor’s historical cost, plus an approximate $42.5 million minority interest partial step-up recorded upon formation of Eagle on October 1, 2004, related to the acquisition of minority interest from unaffiliated parties related to seven of the initial properties. Improvements and additions which extend the life of the property are capitalized and depreciated over the estimated useful life.

Impairment of Investment in Hotel Properties — Hotel properties are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the hotel properties may not be recoverable (i.e., the future undiscounted cash flows for the hotel are projected to be less than the net book value of the hotel). We test for impairment in several situations, including when current or projected cash flows are less than historical cash flows, when it becomes more likely than not that a hotel will be sold before the end of its previously estimated useful life, and when events or changes in circumstances indicate that a hotel’s net book value may not be recoverable. In the evaluation of the impairment of our hotels, we make many assumptions and estimates, including projected cash flows, holding period, expected useful life, future capital expenditures, and fair values, including consideration of capitalization rates, discount rates, and comparable selling prices. To date, no such impairment charges have been recognized. If an asset were deemed to be impaired, we would record an impairment charge for the amount the property’s net book value exceeds its fair value.

Stock-Based Compensation — The 2004 Long-Term Incentive Plan (the “LTIP”) was adopted by the board of directors and approved by Eagle’s stockholders prior to the initial public offering. The purpose of the incentive plan is to promote Eagle’s success and enhance the value of Eagle’s common stock by linking the personal interests of participants to those of the stockholders, and by providing such persons with an incentive to achieve outstanding performance. The incentive plan authorizes the governance and compensation committee and Eagle’s board of directors to grant awards to employees, officers, consultants (including, but not limited to, Corporex and its employees) and directors.

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Eagle accounts for stock-based compensation in accordance with SFAS No. 123(R), “Share-Based Payment”. In connection with Eagle’s formation, Eagle established the LTIP. The Company has issued a net total of 631,066 shares of restricted stock under the LTIP to its executives, directors, and certain employees of the Company, the Predecessor and its affiliates. The vesting periods for these shares range from one to five years. Such shares are charged to compensation expense on a straight-line basis over the requisite service period based on the price on the date of issuance. For the three-month periods ending March 31, 2007 and 2006, respectively, the Company incurred total compensation expense of $0.2 million and $0.1 million related to these restricted shares. Under the LTIP, the Company may issue a variety of performance-based stock awards, including nonqualified stock options. At March 31, 2007, no performance-based stock awards have been issued other than the restricted stock discussed above. The amount of shares available for issuance under this plan increased by 46,168 shares on January 1, 2007, pursuant to the provisions of the plan. At March 31, 2007, the Company had approximately 535,114 remaining shares available for future issuance under the LTIP.

A summary of the Company’s nonvested shares as of March 31, 2007 is as follows:

Segments — Eagle presently operates in one business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers to owning hotels through either acquisition or new development.

4. EARNINGS PER SHARE

The limited partners’ outstanding limited partnership units in the operating partnership (which may be redeemed for common stock upon notice from the limited partner and following our election to redeem the units for stock rather than cash) have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income would also be added back to net income. The computation of basic and diluted earnings per common share is presented below:

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5. MINORITY INTEREST

Minority interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership. Net income (loss) is allocated to minority interest based on limited partnership percentage ownership for the period. Upon formation of the Company on October 1, 2004, the Company issued 5,566,352 units of limited partnership interest to affiliates, plus another 427,485 partnership units were issued on December 5, 2005 in exchange for the remaining 51% of the Embassy Suites Hotel Cincinnati – RiverCenter. An additional 250,000 partnership units were issued to the former owners of the Embassy Suites Hotel Denver International Airport on December 5, 2005, in compliance with the earn-out provisions in the original purchase agreement. An additional 83,333 partnership units were issued to the former owner of the Embassy Suites Hotel Columbus/Dublin on July 24, 2006, in compliance with the earnout provisions of the original purchase agreement. After a one-year holding period from the date of issuance, partnership units may be redeemed for the cash value of one share of our common stock or, at our sole option, one share of common stock. During the three month period ended March 31, 2007 and 2006, respectively, 139,152 and 276,310 partnership units were redeemed in exchange for an equal number of shares of our common stock. As of March 31, 2007 there are 5,861,907 partnership units outstanding which represent an approximate minority interest ownership of 25%. These exchanges are non-cash items.

6. DEBT

Eagle’s notes payable as of March 31, 2007 are as follows:

Total debt maturities, including capital lease obligations, as of March 31, 2007 were as follows ($000s):

7. RELATED PARTY TRANSACTIONS

Hotel Management Agreements - Nine of our hotels are subject to management agreements with Commonwealth Hotels. Under these agreements, Eagle is obligated to pay monthly management fees equal to 2.75% in 2006 and 3.00% of gross revenues in 2007 and the years thereafter. Incentive fees may also be earned upon meeting certain net operating income thresholds. These management agreements have ten-year terms, with a renewal option for one additional five-year period. If Eagle terminates a management agreement on any of the properties prior to its expiration, due to sale of the property, Eagle may be required to pay a substantial termination fee. Eagle’s Chairman is the majority shareholder in Commonwealth Hotels. Management fees earned by Commonwealth Hotels for the three months ending March 31, 2007 and 2006, respectively, were $0.8 million and

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$0.7 million. At March 31, 2007 and December 31, 2006, respectively, Eagle owed Commonwealth Hotels $0.4 million and $0.3 million in management fees payable.

Strategic Alliance Agreement – Eagle has entered into a Strategic Alliance Agreement (“SAA”) with Corporex and affiliated parties. The SAA provides Eagle with the right of first refusal for development opportunities with Corporex and affiliates, as well as a non-compete clause for markets in which we own or have an investment. The agreement expires October 1, 2014.

Leased Office Space – Eagle’s headquarters are located in an office building that is owned by a limited partnership in which Eagle’s Chairman and Chief Executive Officer are limited partners. We entered into a lease for this office space subsequent to our IPO at terms approximating the fair market value. We are obligated to pay $0.6 million in rent over a ten-year period, or on average, approximately $5,000 per month. The expense of this lease is being recognized on a straight-line basis. In addition to the rent payments, we will also be subject to a common area maintenance fee allocation related to this office space of approximately $2,000 per month. Eagle believes the lease payments do not exceed market value.

8. STATEMENT OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES

On March 2, 2007, Eagle declared a dividend of $0.175 per common share and operating partnership unit. This dividend was paid on April 16, 2007, to holders of record as of March 30, 2007. The total amount of the dividends paid to holders of our common stock was $3.2 million and $1.0 million was paid to holders of operating partnership units.

On March 2, 2007, Eagle declared a quarterly dividend of $0.515625 per 8.25% Series A Cumulative Redeemable Preferred Share for the period ended March 31, 2007 to holders of record as of March 16, 2007. The total amount of dividends paid to holders of the preferred shares was $2.1 million and was paid on April 2, 2006.

During the three months ended March 31, 2007, 139,152 operating partnership units were redeemed for an equal number of common shares. These redemptions are non-cash items. As of March 31, 2007, there were 5,861,907 operating partnership units outstanding.

Interest paid by Eagle during the three months ended March 31, 2007 and 2006, respectively, was $3.8 million and $2.8 million.

During the three months ended March 31, 2007, Eagle granted approximately 120,000 shares of restricted stock, valued at approximately $1,220,000 under its LTIP and cancelled approximately 608 shares of restricted stock valued at approximately $7,000. During the three months ended March 31, 2006, Eagle granted 49,000 shares valued at approximately $424,000 under its LTIP and cancelled approximately 3,000 shares of restricted stock due to employee resignations, valued at approximately $30,000.

9. INCOME TAXES

The Company has elected to be taxed as a REIT under the Internal Revenue Code. To qualify as a REIT, the Company must meet a number of organizational and operational requirements, including a requirement that the Company distributes at least 90% of the Company’s taxable income to the Company’s shareholders. The Company currently intends to adhere to these requirements and maintain the Company’s REIT status. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income taxes at regular corporate rates (including any applicable alternative minimum tax) and may not qualify as a REIT for four subsequent taxable years. If the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on the Company’s income as well as to federal income and excise taxes on the Company’s undistributed taxable income.

The Company had a net tax (benefit)expense of $(24) and $363, respectively, for the three month periods ending March 31, 2007 and 2006.

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The Company’s deferred tax asset related to its taxable REIT subsidiary (“TRS”) consisted of the following for the periods ending March 31, 2007 and December 31, 2006:

The Company had an income tax payable of $528 and $474, respectively as of March 31, 2007 and December 31, 2006.

10. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 is an interpretation of FASB Statement No. 109, “Accounting for Income Taxes,” and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 requires expanded disclosure with respect to the uncertainty in income taxes and is effective as of the beginning of our 2007 fiscal year. The adoption of this pronouncement did not have a material effect on our consolidated financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). SAB 108 seeks to clarify the manner in which registrants should view prior year errors in order to determine whether the errors are of a material nature and need to be adjusted. SAB 108 requires registrants to view the prior year errors from both a balance sheet and income statement perspective to determine materiality. SAB 108 is effective as of the beginning of our 2007 fiscal year. The adoption of this pronouncement did not have a material effect on our consolidated financial statements.

11. COMMITMENTS AND CONTINGENCIES

Restricted Cash — Under certain existing mortgage loan and hotel management agreements, Eagle is obligated to escrow payments for insurance, real estate taxes and 4% to 5% of gross revenue of certain properties for capital improvements.

Contingent Consideration — At the time we acquired our initial hotels, we agreed to make earn-out payments totaling in the aggregate up to 833,333 additional operating partnership units, which are payable to the original contributors of the Embassy Suites Hotel Columbus/Dublin, the Embassy Suites Hotel Cleveland/Rockside and the Embassy Suites Hotel Denver-International Airport only if certain operating measurements are achieved on any trailing 12-month basis within three years from the contribution. For the 12-month period ended September 30, 2005, the Embassy Suites Hotel Denver-International Airport exceeded the operating measurements required to receive the additional 250,000 operating partnership units pursuant to the earn-out provisions of the original

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contribution agreement. These operating partnership units were issued to the former owners of that hotel on December 5, 2005. For the 12-month period ended June 30, 2006, the Embassy Suites Hotel Columbus/Dublin exceeded the operating measurements required to receive the additional 83,333 operating partnership units pursuant to the earn-out provisions of the original contribution agreement. These operating partnership units were issued to the former owner of that hotel on July 24, 2006.

Franchise Fees — All of our hotels, except the Hyatt Regency Rochester, operate under franchise agreements. In conjunction with these franchise agreements, Eagle is obligated to pay the franchisors royalty fees between 4% and 6% of gross room revenue, and under certain agreements, fees for marketing, reservations, and other related activities aggregating between 1% and 4% of gross room revenue. In addition, the Marriott hotels are obligated to pay between 2% and 3% for food and beverage revenues. Franchise fees are included in the “Selling, general and administrative” line of the accompanying consolidated statements of operations.

Litigation — We are subject to various legal proceedings and claims that arise in the ordinary course of business. In our opinion, the amount of any ultimate liability with respect to these actions will not materially affect our financial position, results of operations or liquidity.

Taxes — Under tax indemnification agreements with the contributors of certain initial hotels, Eagle has agreed to provide tax indemnification to the original contributors against certain tax consequences of a sale. We have agreed to pay the contributor’s tax liability with respect to gain allocated to the contributor under Section 704(C) of the Internal Revenue Code if we dispose of a property contributed by the contributor in a taxable transaction during a “protected period”, which continues until the earlier of: a) October 1, 2014, or b) the date on which the contributor no longer owns, in the aggregate, at least 25% of the units we issued to the contributor at the time of its contribution of property to our operating partnership.

12. COMPREHENSIVE INCOME

For the three months ended March 31, 2007 and 2006, respectively, there was a comprehensive loss of ($821,000) and comprehensive income of $398,000.

13. STRATEGIC ALTERNATIVES

On January 29, 2007, Eagle Hospitality Properties Trust, Inc. issued a press release announcing that its Board of Directors has decided to explore strategic alternatives to enhance shareholder value, including a possible sale of the Company. As part of that process, the Board has formed a Special Committee, which has retained Morgan Stanley as financial advisor.

14. SUBSEQUENT EVENTS

On April 10, 2007, Eagle Hospitality Properties Trust, Inc. amended the employment agreements of two of its executive officers, Raymond D. Martz, Chief Financial Officer, Treasurer and Secretary, and Brian Guernier, Senior Vice President – Acquisitions.

On April 30, 2007 Eagle Hospitality Properties Trust, Inc. announced that it has entered into a definitive agreement to be acquired by AP AIMCAP, a joint venture of Apollo Real Estate Investment Fund V L.P., Aimbridge Hospitality, L.P., and JF Capital Advisors, LLC for $13.35 per share and operating partnership unit in cash. The transaction, which is subject to Eagle common stockholder approval and other customary closing conditions, is expected to be completed in the third quarter of 2007. Eagle intends to continue to pay its quarterly common dividend, prorated through the closing of the transaction. The transaction is not contingent upon AP AIMCAP obtaining financing.

Forward-Looking Statements

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We make forward-looking statements throughout this Form 10-Q that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans, and objectives. Statements regarding the following subjects are forward-looking by their nature:

The forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions, and expectations can change as a result of many possible events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, and results of operations may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our common stock. Additionally, the following factors could cause actual results to vary from our forward-looking statements:

When we use the words “will likely result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” or similar expressions, we intend to identify forward-looking statements. You should not place undue

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reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

RESULTS OF OPERATIONS

OVERVIEW

Eagle Hospitality Properties Trust, Inc., a Maryland corporation (together with its subsidiaries “Eagle” or “Company”), is a self-advised real estate investment trust (“REIT”) formed to pursue investment opportunities in the full-service and all-suites hotel industry. As of March 31, 2007, Eagle’s portfolio consists of thirteen full-service and all-suites hotels under the Embassy Suites, Marriott, Hilton and Hyatt brands.

The first three months of 2007 saw a modest improvement in RevPAR over 2006 due to decreased group demand and uneven transient demand. The transient demand was impacted by weather issues experienced throughout much of the country during the first quarter. Also, the Company’s results were impacted by increased employee costs at most of our hotels due to market and inflationary pressures.

For the first quarter of 2007, the Company had a net loss available to common shareholders of ($0.8) million, or ($0.05) per diluted share. FFO was $3.7 million and EBITDA was $9.6 million. RevPAR was $92.71.

FIRST QUARTER HIGHLIGHTS AND OUTLOOK FOR THE REMAINDER OF 2007

Refer to the “Results of Operations” section below for discussion of our first quarter 2007 results compared to 2006 results.

In the hotel industry many categories of operating costs do not vary directly with the volume of sales, the exceptions being franchise, management, credit card fees and the costs of the food and beverages served. Because of this operating leverage, changes in sales volume disproportionately impact operating results. Room revenue is the most important category of revenue and drives other revenue categories such as food and beverage and telephone. There are three key performance indicators used in the hotel industry to measure room sales:

As a result of lower than projected group demand along with uneven transient demand our hotels saw a modest RevPAR increase of 1.1%, from $91.71 for the first three months of 2006 to $92.71 for the first three months of 2007. The hotel occupancy decreased by 7.2% to 64.9% and the ADR improved 9.0% to $142.91.

On March 2, 2007, Eagle declared a dividend of $0.175 per common share and operating partnership unit. This dividend was paid on April 16, 2007, to holders of record as of March 30, 2007. The total amount of the dividends paid to holders of our common stock was $3.2 million and $1.0 million was paid to holders of operating partnership units.

On March 2, 2007, Eagle declared a quarterly dividend of $0.515625 per 8.25% Series A Cumulative Redeemable Preferred Share for the period ended March 31, 2007 to holders of record as of March 16, 2007. The total amount of dividends paid to holders of the preferred shares was $2.1 million and was paid on April 2, 2007.

Interest paid by Eagle during the three months ended March 31, 2007 and 2006, respectively, was $3.8 million and $2.8 million.

During the three months ended March 31, 2007, Eagle granted approximately 120,000 shares of restricted stock, valued at approximately $1,220,000 under its LTIP and cancelled approximately 608 shares of restricted stock valued at approximately $7,000. During the three months ended March 31, 2006, Eagle granted 49,000 shares valued at approximately $424,000 under its LTIP and cancelled approximately 3,000 shares of restricted stock due to employee resignations, valued at approximately $30,000.

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During the three months ended March 31, 2007 and 2006, respectively, 139,152 and 276,310 partnership units were redeemed in exchange for an equal number of shares of our common stock. These exchanges are non-cash items. As of March 31, 2007, there are 5,861,907 partnership units outstanding which represent an approximate minority interest ownership of 25%.

Management expects improved portfolio performance during the remainder of 2007 based on a rebound in group demand and steadier transient demand. However, we anticipate that the rate of growth is likely to be lower in 2007 than it was in 2006. This is due in large part to the difficult comparables created by the strong 2006 convention year in many of the markets in which we compete. We anticipate the continuing increase in employee costs due to market and inflationary pressures. Management expects to see revenue increases in the remainder of 2007 over 2006 for the following reasons:

This foregoing forward-looking statement is subject to risks and uncertainties. For more information, see the introductory paragraphs of “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

CRITICAL ACCOUNTING POLICIES

There were no changes to the critical accounting policies and estimates made by management in the three months ended March 31, 2007. For a more detailed description of our critical accounting policies, see “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our 2006 Annual Report on Form 10-K.

FINANCIAL CONDITION

Quarter Ended March 31, 2007 Compared to December 31, 2006

Total notes payable increased $5.0 million from $253.5 million to $258.5 million, or 2.0%. The increase was largely the result of the funds drawn on our credit facility to pay the dividends paid in January 2007. Total assets decreased $1.0 million, largely the result of depreciation.

The unrestricted cash balance increased $2.6 million from December 31, 2006. This increase is the result of cash generated by hotel operations and cash drawn on the credit facility offset by the payment of common and preferred dividends and capital expenditures.

RESULTS OF OPERATIONS

Quarter Ended March 31,2007 Compared to Quarter Ended March 31, 2006

Revenue. Total revenues increased $3.5 million, or 9.9%, from $35.2 million in the first quarter of 2006 to $38.6 million in the first quarter of 2007. $2.3 million of the increase was the result of the Embassy Boston acquisition in July 2006. In addition, the lease revenue generated by the Embassy Suites Hotel and Casino San Juan increased by $0.4 million as the result of lease adjustments that were effective January 1, 2007.

Our portfolio RevPAR increased from $91.71 for the first quarter of 2006 to $92.71 for the first quarter of 2007, or a 1.1% increase. The largest RevPAR improvements were seen at the Chicago Marriott Southwest at Burr

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Ridge (+12.0%), the Embassy Suites Hotel Columbus/Dublin (+9.1%) and the Embassy Suites Hotel at the Denver International Airport (+7.1%).

A key part of our asset management strategy is to focus on the growth of ADR as a more sustainable revenue strategy than to simply boost occupancy through underpricing the competition. We believe the effectiveness of this strategy was evident during the first quarter of 2007 whereby RevPAR increased despite an occupancy decrease of more than 7.0%.

Operating Expenses. Total operating expenses increased by $4.6 million, or 15.7%, from $29.4 million during the first quarter of 2006 to $34.0 million in the first quarter of 2007. Of this increase, approximately $2.3 million was related to the Embassy Boston acquired in July 2006. The remainder of the increase at the hotel level was largely due to items that vary directly with an increase in revenues, such as housekeeping expense and franchise, management and credit card fees. In addition, there was an increase in corporate expense of $0.6 million, largely the result of the strategic alternative process.

Depreciation and Amortization Expense. Total depreciation and amortization expense increased by $0.9 million, or 22.0%, from $4.1 million in the first quarter of 2006 to $5.0 million during the same period in 2007. This increase is related to $0.6 million of depreciation expense for the Embassy Boston and the additional depreciation incurred due to the 2006 capital expenditures.

Operating Income. Net operating income decreased by $1.2 million, or 20.7%, to $4.6 million in the first quarter of 2007 from $5.8 million during the first quarter of 2006. The decrease was the result of above inflation level increases in employee expenses that was partially offset by a decrease of $0.8 million in corporate expense. In addition, the Embassy Suites Boston incurred an operating loss for the quarter which is due to the fact that the hotel is still ramping up and the seasonal impact typically realized in the first quarter.

Interest Expense. Total interest expense increased in the first quarter of 2007 by approximately $0.8 million, or 27.6%, to $3.7 million from $2.9 million in 2006. The increase is the result of the debt incurred related to the acquisition of the Embassy Boston.

Income Tax Expense. A net income tax expense of $0 was booked for the three month period ending March 31, 2007, as compared to a net income tax expense of $0.4 million for the same period in 2006. This was the result of the taxable loss generated in 2007 as compared to 2006.

Minority Interest. Minority interest in the operating partnership represents the limited partners’ proportionate share of the equity in the operating partnership. Loss or income is allocated to minority interest based on the weighted average percentage ownership during the quarter. For the three month period ending March 31, 2007, the weighted average percentage of the limited partners’ ownership was approximately 25%. As a result of this ownership percentage, the portion of the loss allocated to minority interest for the first quarter of 2007 was ($0.3) million versus an allocation of $0.1 million of income during the first quarter of 2006.

Distributions to Preferred Shareholders. During the three-month periods ended March 31, 2007 and 2006, the Company made distributions in the amount of the $2.1 million related to the Series A Preferred Shares. These shares were issued as the result of a public offering that closed on June 13, 2005.

Net (Loss) Income Available to Common Shareholders. The net loss available to common shareholders of approximately ($0.8) million in the first quarter of 2007 represented a decrease of approximately $1.2 million from the $0.4 million of net income available to common shareholder recognized in the first quarter of 2006. The decrease was due to the increased operating expenses and increased corporate expenses.

NON-GAAP FINANCIAL MEASURES

FUNDS FROM OPERATIONS

The White Paper on Funds From Operations (“FFO”) approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”) in April 2002 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of previously depreciated operating real estate assets and extraordinary items as defined by GAAP, plus certain items such as real estate related depreciation and amortization, and after adjustment for any minority interest deriving from unconsolidated entities

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and joint ventures. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. Management believes that the use of FFO, combined with the required primary GAAP presentations, has improved the understanding of operating results of REITs among the investing public and made comparisons of REIT operating results more meaningful. Management considers FFO to be a useful measure of adjusted earnings for reviewing comparative operating and financial performance (although FFO should be reviewed in conjunction with net income (loss), which remains the primary measure of performance) because by excluding gains or losses related to sales of previously depreciated operating real estate assets and excluding real estate asset depreciation and amortization, FFO assists in comparing the operating performance of a company’s real estate between periods or as compared to different companies.

We compute FFO in accordance with our interpretation of standards established by NAREIT which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the NAREIT definition differently than us. FFO does not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income as an indication of our financial performance or to cash flow from operating activities as determined by GAAP as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. FFO may include funds that may not be available for the Company’s discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions, and other commitments and uncertainties.

The following is a reconciliation between net income and FFO for the three months ended March 31, 2007 and 2006, respectively (in thousands):

NET INCOME TO FFO RECONCILIATION

EBITDA

EBITDA herein is defined as net income (loss) before interest expense, taxes, depreciation and amortization. We believe that EBITDA is helpful to investors and management as a measure of the performance of the Company because it provides an indication of the operating performance of the properties within the portfolio and is not impacted by the capital structure of the REIT. EBITDA does not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income as an indication of our financial performance or to cash flow from operating activities as determined by GAAP as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. EBITDA may include funds that may not be available for the Company’s discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions, and other commitments and uncertainties.

The following is a reconciliation between net income and EBITDA for the three months ended March 31, 2007 and 2006, respectively (in thousands):

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NET INCOME TO EBITDA RECONCILIATION

Key Hotel Operating Statistics

The following table illustrates key operating statistics of our portfolio for the three months ended March 31, 2007. This table assumes that the third party lessee structure for the Embassy San Juan Hotel & Casino does not exist:

For comparative purposes this schedule includes the Embassy Suites Boston at Logan International Airport, which was acquired on July 21, 2006 for the entire three month periods ending March 31, 2007 and 2006.

LIQUIDITY AND CAPITAL RESOURCES

Our principal source of funds to meet our cash requirements, including distributions to stockholders, is our share of the operating partnership’s cash flow. The operating partnership’s principal source of revenue is the cash flow provided by the hotel operations. We also plan to recycle capital by disposing of stabilized assets when attractive opportunities are available.

Below is a comparison of the cash flows for the three months ended March 31, 2007 and 2006, respectively (000’s):

Cash flow from hotel operations is subject to all operating risks common to the hotel industry, including:

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Recurring capital expenditures and debt service are the most significant short-term liquidity requirements. During the remainder of 2007, we expect capital expenditures will be substantially funded by our replacement reserve accounts and cash provided by hotel operations.

We expect to set aside 4% of certain future hotel revenues (5% with respect to the Hyatt Regency Rochester) in our replacement reserve accounts to fund capital expenditures. Throughout the remainder of 2007 we expect to make approximately $10.0 to $12.0 million in capital expenditures with the majority of the expenditures occurring at the Hilton Glendale, Hyatt Regency Rochester, Embassy Suites Phoenix, Embassy Suites Boston Logan Airport and the Embassy Suites Dublin. We anticipate that these expenditures will be funded from existing restricted cash reserves and cash provided by hotel operations.

We may seek to negotiate additional credit facilities, replacement credit facilities, or we may issue debt instruments. Any debt incurred or issued by us may be secured or unsecured, long-term, medium-term or short-term, bear interest at a fixed or variable rate, and be subject to such other terms as the Board of Directors considers prudent. However, we cannot assure you that we would be able to obtain such financings on favorable terms, if at all.

We have considered our short-term (defined as one-year or less) liquidity needs and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We expect our principal short-term liquidity needs will be to fund normal recurring expenses, debt service requirements, and any distributions on our outstanding common shares, Series A Preferred Shares and operating partnership units. We anticipate that these needs will be met with cash flows provided by operating activities and proceeds from additional financings.

We expect to meet long-term (defined as greater than one year) liquidity requirements such as property acquisitions, scheduled debt maturities, major renovations, development projects and other nonrecurring capital improvements utilizing cash flow from operations, additional debt financings and preferred or common equity offerings. We expect to acquire additional hotel properties as suitable opportunities arise.

Capital Projects

During the three months ended March 31, 2007, we spent approximately $2.2 million, on capital improvements.

Below is a table depicting the significant capital expenditures by hotel for the three months ended March 31, 2007:

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Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.

Cash Distribution Policy

We have elected to be taxed as a REIT commencing with our taxable year ended December 31, 2004. To qualify as a REIT, we will be required to make annual distributions to our shareholders of at least 90% of our REIT taxable income (which is determined without regard to the dividends paid deduction and by excluding net capital gain and which does not necessarily equal net income as calculated in accordance with generally accepted accounting principles). The amount, timing and frequency of distributions will be authorized by our board of directors and declared by us based upon a variety of factors deemed relevant by our directors, and no assurance can be given that our distribution policy will not change in the future. Our ability to pay distributions to our stockholders will depend, in part, upon the management of our properties by our independent hotel managers. Distributions to our stockholders will generally be taxable to our stockholders as ordinary income; however, because a portion of our investments will be equity ownership interests in hotels, which will result in depreciation and non-cash charges against our income, a portion of our distributions may constitute a tax-free return of capital. To the extent not inconsistent with maintaining our REIT status, our TRS may retain any after-tax earnings.

Inflation

We rely entirely on the performance of our properties and the ability of the properties’ managers to increase revenues to keep pace with inflation. Hotel operators can generally increase room rates rather quickly, but competitive pressures may limit their ability to raise rates faster than inflation. Our general and administrative costs, such as real estate and personal property taxes, wages, property and casualty insurance, and utilities are also subject to inflationary pressures.

Seasonality

Virtually all of our properties’ operations are subject to the peaks and valleys associated with seasonal occupancy. The seasonality pattern nevertheless can be expected to cause fluctuations in our revenue. We anticipate that our cash flow from the operation of the properties will be sufficient to enable us to make quarterly distributions to maintain our REIT status. To the extent that cash flow from operations is insufficient during any quarter due to temporary or seasonal fluctuations in revenue, we expect to utilize other cash on hand or borrowings to make required distributions. However, we cannot make any assurances that we will make distributions in the future.

Geographic Concentration

Three of our hotels are located in the Northern Kentucky/Greater Cincinnati, Ohio metropolitan area. Economic and real estate conditions in this area significantly affect our revenues. Business layoffs, downsizing, industry slowdowns, demographic changes and other similar factors may adversely affect the economic climate in this locale. Any resulting oversupply or reduced demand for hotels in the area would adversely affect revenues and net income.

Competition and Other Economic Factors

Our hotels are located in developed areas that contain other hotel properties. The future occupancy, average daily rate and RevPAR of any hotel could be materially and adversely affected by an increase in the number of or quality of the competitive hotel properties in its market area. Competition could also affect the quality and quantity of future investment opportunities, and our ability to sell existing properties.

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As a portion of the lodging industry’s sales are based upon business, commercial and leisure travel, changes in general economic conditions, demographics, or changes in local business economics, could affect these and other travel segments. This may affect demand for rooms, which would affect hotel revenues.

Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates. Our variable rate debt as of March 31, 2007 is $71.8 million, or approximately 28%, of our debt.

We have entered into both variable and fixed rate debt arrangements to allow us to optimize the balance of using variable rate debt versus fixed rate debt. The weighted average interest rate of our variable rate debt and total debt as of March 31, 2007 was 7.82% and 5.46%, respectively.

We do not believe that changes in market interest rates will have a material impact on the performance or fair value of our hotel portfolio because the value of our hotel portfolio is based primarily on the operating cash flow of the hotels, before interest expense charges. However, a change of 1/4% in the index rate to which our variable rate debt is tied would change our annual interest expense incurred by $0.2 million, based upon the debt outstanding at March 31, 2007.

As of March 31, 2007, an evaluation was performed under the supervision and with the participation of the principal executive and financial officers regarding the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) or 15d-15(e)). Based upon the evaluation, they concluded that our disclosure controls and procedures were effective in ensuring that material information required to be disclosed in this Quarterly Report was recorded, processed, summarized and reported on a timely basis.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2007 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

On February 28, 2007, a purported class action complaint was filed in the Commonwealth of Kentucky Kenton Circuit Court against Eagle Hospitality Properties Trust, Inc. (the “Company”), each of its directors and Corporex Companies, LLC. The action was brought by the City of Pontiac General Employees’ Retirement System, on behalf of itself and behalf of all holders of the Company’s stock (excluding the named defendants and their affiliates). The complaint alleges, among other things, that the directors are in breach of their fiduciary duties to shareholders in connection with the previously announced exploration of strategic alternatives by the Special Committee of the Company and, in particular, in connection with a letter received from Corporex Companies, Inc., an affiliate of William P. Butler, the Chairman of the Company, regarding a potential acquisition of the outstanding common stock of the Company not currently owned by Corporex or its affiliates. The complaint seeks, among other things, unspecified damages on behalf of the Company, including attorneys’ fees, costs and expenses, and injunctive relief against the Company from consummating any buyout between the Company and Corporex.

The Company and the directors believe that the allegations in the complaint are without merit and intend to vigorously defend themselves in this matter.

In addition to the complaint mentioned above, we are subject to various legal proceedings and claims that arise in the ordinary course of business. In our opinion, the amount of any ultimate liability with respect to these actions will not materially affect our financial position, results of operations or liquidity.

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There have been no material changes to the risk factors disclosed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

None.

None.

None.

None.

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.

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