Arlington Hospitality, Inc. Announces September 2003 Operating Results and Recent Hotel Development and Sales Activity.

Business Editors

ARLINGTON HEIGHTS, Ill.--(BUSINESS WIRE)--Oct. 20, 2003

Sells AmeriHost Inn in Kenton, Ohio

Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, today announced September 2003 operating results for 56 AmeriHost Inn hotels in which the company has, or had, an ownership interest and which have been opened at least 13 months, as of September 30, 2003. In addition, the company announced the October 2nd sale of one wholly owned AmeriHost Inn hotel located in Kenton, Ohio.

Arlington is the nation's largest owner and franchisee of AmeriHost Inn hotels, operating 58 AmeriHost Inn hotels. Cendant Corporation (NYSE: CD) is the franchisor of the AmeriHost Inn brand, a mid-market, limited service hotel brand with approximately 100 properties located in 20 states and Canada.

Operating Results

Same-room revenue per available room (RevPAR) in September 2003 decreased 1.0 percent to $32.68, compared to September 2002. Occupancy declined 0.7 percent to 56.6 percent, and average daily rate (ADR) decreased slightly to $57.78. These same-room statistics include the operation of AmeriHost Inn hotels that were open during both periods presented.

                   One Month   Three Months Nine Months  Twelve Months
                      Ended        Ended        Ended        Ended
                  September 30 September 30 September 30 September 30
                  ----------------------------------------------------

Occupancy - 2003      56.6%        64.3%        58.3%        57.0%
Occupancy - 2002      57.0%        64.3%        58.5%        57.3%
Increase (decrease)  (0.7%)         0.0%       (0.3%)       (0.5%)

Average Daily Rate
 - 2003             $57.78       $58.91       $57.34       $57.12
Average Daily Rate
 - 2002             $57.87       $58.89       $57.56       $57.21
Increase (decrease) (0.2%)         0.0%       (0.4%)       (0.2%)

RevPAR - 2003       $32.68       $37.91       $33.46       $32.56
RevPAR - 2002       $33.00       $37.86       $33.67       $32.78
Increase (decrease) (1.0%)         0.0%       (0.7%)       (0.8%)

According to Smith Travel Research, preliminary results for September 2003 indicate that RevPAR for the midscale without food and beverage segment of the lodging industry will be up between 1 and 3 percent, compared to September 2002. "In September, our hotels underperformed the industry primarily as a result of continued weakness in business travel," said Jerry H. Herman, president and chief executive officer. "As previously announced, we are undertaking aggressive new sales and marketing initiatives that focus on enhancing revenues through electronic distribution channels."

Hotel Development

Thus far in 2003, Arlington Hospitality has completed construction and opened three wholly owned AmeriHost Inn hotels and one AmeriHost Inn hotel for a joint venture in which the company is a minority partner. Currently, the company has one 79-room AmeriHost Inn hotel under construction in Weirton, W.V., for a joint venture in which the company has a minority ownership interest. In addition, the company has several other projects in the pre-construction development stage.

For more information regarding turnkey development services, as well as information on all of the company's hotels, contact Steve Miller via email at [e-mail] or by telephone at [phone], ext. 312.

Hotel Asset Sales

As previously announced, the company has implemented a plan for the disposition of 25 to 30 hotels over the next two years in order to reduce debt, increase cash flow, accelerate fees from the Cendant relationship, and provide capital for future hotel development.

The company sold, as previously announced, two wholly owned AmeriHost Inn hotels during September--one located in Jacksonville, Ill., and the other located in New Martinsville, West Virginia. Including the sale of one wholly owned AmeriHost Inn hotel in August 2003, there were a total of three wholly owned AmeriHost Inn hotels sold during the 2003 third quarter. The company paid down approximately $5.8 million in mortgage debt with proceeds from the sale of these three hotels. The company will include the results of these sales in its third quarter 2003 financial statements.

On October 2, 2003, the company sold a wholly owned AmeriHost Inn hotel located in Kenton, Ohio. The company paid off the related mortgage debt in the amount of approximately $1.2 million upon the sale of this hotel, and will include the results of this sale in its fourth quarter 2003 financial statements. Herman said, "These sales demonstrate the continued attractiveness of our hotels to the hotel investment and ownership community, and the ongoing momentum of our company's plan to sell certain hotel assets."

Year to date in 2003, Arlington Hospitality, Inc. has sold seven wholly owned AmeriHost Inn hotels, resulting in net hotel sales revenues of approximately $21.0 million and the reduction of mortgage debt of approximately $12.7 million. During the same period, Arlington also facilitated the sale of two hotels owned by joint ventures in which the company was a partner, including one AmeriHost Inn and one non-AmeriHost Inn hotel.

Currently, the company has four hotels under contract for sale, which are expected to be consummated within the next six months. The revenue and profit/loss from the sale of hotels, as well as the reduction of debt, will be reported in the company's financial statements during the quarter in which the sale transactions close. Although the company has these hotels under contract for sale, with nonrefundable cash deposits in certain cases, certain conditions to closing remain, and there can be no assurance that these sales will be consummated as anticipated.

The amount of revenue and debt reduction described above relates solely to closed or pending sales activities. Any forecasted amounts from closed or pending sales could differ from the final amounts included in the company's applicable quarterly and annual financial statements when issued. Furthermore, such forecasted amounts do not represent guidance on, or forecasts of, the results of the company's entire consolidated operations, which are reported on a quarterly basis.

Arlington has engaged the brokerage firm of Thompson Calhoun Fair to assist in the sale of most of these hotels, and is already evaluating initial offers received on several of the hotels. Information on Arlington's hotels being brokered for sale by Thompson Calhoun Fair can be found at www.tcfhotels.com, or by calling Mark Fair at 404-995-8970.

About Arlington Hospitality

Arlington Hospitality, Inc. is a hotel development and management company that builds, operates and sells mid-market hotels, primarily the AmeriHost Inn brand. Currently, Arlington Hospitality, Inc. owns or manages 66 properties in 17 states, including 58 AmeriHost Inn hotels, for a total of 4,820 rooms, with additional AmeriHost Inn & Suites hotels under development. The AmeriHost Inn brand is a mid-market, limited service hotel brand with approximately 100 properties located in 20 states and Canada.

This press release may contain forward-looking statements. Forward-looking statements are statements that are not historical, including statements regarding management's intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by words such as "believe," "expect," "anticipate," "intend," "estimate," "may," "will," "should," and "could." There are numerous risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements including, without limitation, risks relating to the development and operation of hotels, the timing, consummation and final terms of hotel sales, the availability of capital to finance growth, geopolitical events, competition and the historical cyclicality of the lodging industry. All forward-looking statements included in this press release are based on information available at the time of the release, and Arlington Hospitality assumes no obligation to update any forward-looking statement.