Full Speed Ahead For AFM Hospitality Corporation.

Business Editors

SEATTLE--(BUSINESS WIRE)--June 20, 2001

AFM Hospitality Corporation (TSE:AFM.)

Revenue and Rooms Up as Leading North American Lodging

Firm Issues Long-Term Forecast

More properties, more revenue and continued expansion are on the travel itinerary as a leading North American lodging franchisor maps out growth targets for the first half of the new decade.

AFM Hospitality Corporation (TSE:AFM.), a North American hotel management company with offices in Seattle and Toronto, presented its long-term forecasts for growth through 2004, to shareholders at its Annual General Meeting in Toronto June 6. Chief among its forecasts was a threefold increase in licenses and management agreements for hotel properties and rooms by FY 2004 compared to FY 2000. AFM is looking to build on its portfolio of recognized lodging brands, following its recent franchise rights agreement in Canada for the Park Plaza and Park Inn hotels. AFM also intends to expand its relationships with its blue-chip strategic marketing partners including Cendant, Air Canada, Petro-Canada and the Canadian National Post.

AFM expects continued growth in its three core businesses: franchising, hotel management and purchasing services. AFM also announced long-term growth goals in revenue and cash flow and made the following forecasts through FY 2004:

--  20%-25% annual growth in number of franchised and managed
    properties
--  25%-30% annual growth in revenue
--  50% annual growth in EBITDA

If the targets are met, AFM would achieve system-wide sales in excess of CDN$1 billion, gross revenue of $45+ million and the number of rooms franchised and managed exceeding 35,000 by the end of 2004. AFM expects to achieve these results with increased management fee income and additional franchise sales as it executes its growth plan.

"While our growth forecasts may seem aggressive, we believe this is a realistic roadmap to get us through to the middle of the decade," says Lawrence Horwitz, Chairman of AFM Hospitality Corporation. "We have the management and development teams in place to work toward these growth targets over the next four years. And exceptional first-quarter 2001 results heading into our traditionally strong summer season is helping build the foundation to a strong growth plan."

Stephen Phillips, AFM Vice-Chairman and CEO, also highlighted for shareholders a number of key achievements in 2000, including growth in shareholder equity to $6.9 million, expansion into the U.S. through the acquisition of Seattle-based Northwest Lodging Inc.'s portfolio of 14 hotel management agreements, and the acquisition of the Park Plaza/Park Inn brands for Canada.

"We head into the first half of the decade with our strongest-ever portfolio of lodging brands and management expertise across all sectors," says Phillips. "Our plan is to build on this momentum and establish our position among North America's premier hospitality companies."

Shareholders at the annual general meeting also gave unanimous approval to all matters presented, including ratifying new corporate by-laws, amending the existing employee stock option plan and approving the private placement of common shares to Rushlake Hotels (USA), Inc. Full details of the matters that were unanimously approved at the annual general meeting are set out in AFM's Information Circular dated April 10, 2001, which is available on SEDAR.

About AFM Hospitality Corporation

Through its subsidiaries, AFM Hospitality Corporation, which also owns HFS Purchasing Services Canada, AFM Asset Management Inc., Northwest Lodging International (USA) Inc. and Northwest Lodging International (Canada) Inc., is the exclusive Canadian Master Franchisor for ASTON(R), Best Inns(R), Hawthorn(R) Suites, Howard Johnson(R), Knights Inn(R), Park Plaza, Park Inn, Ramada(R) and Villager(R) Lodge. AFM Hospitality Corporation operates or has open and/or executed franchise agreements with more than 140 hotels in North America, representing an inventory of nearly 14,000 hotel rooms. The company's primary focus is to increase the number of hotels franchised by the respective brands, franchise new brands, build the portfolio of hotel management agreements, and acquire other franchise businesses related to the hospitality industry, while making available property management services. AFM Hospitality Corporation is a publicly traded company listed on the Toronto Stock Exchange (TSE:AFM). AFM Hospitality Corporation system-wide sales for branded hotels in its franchise portfolio and properties operated by the company exceed CDN$300 million per year. AFM Hospitality Corporation may be reached at www.afmcorp.com

Forward-Looking Information

This Press Release contains certain forward-looking statements and information from AFM Hospitality Corporation's first quarter 2001 relating, but not limited, to the company's operations, anticipated financial performance, business prospects and strategies. Forward-looking information typically contains statements with words such as "anticipate," "believe," "plan" or similar words suggesting future outcomes.

The results or events predicted in these statements may differ materially from actual results or events. By its nature, AFM Hospitality Corporation's forward-looking information involves numerous assumptions, inherent risks and uncertainties, including but not limited to the following factors: changes in business strategies; general global economic and business conditions; the effects of competition and pricing pressures; hotel industry overcapacity; shifts in market demand; changes in laws and regulations; uncertainties of litigation; labour disputes; timing of completion of capital or maintenance projects by both franchised and managed hotels; currency and interest rate fluctuations; various events which disrupt operations; and technological changes.

AFM Hospitality Corporation undertakes no obligation to update publicly or otherwise revise forward-looking information, whether as a result of new information, future events or otherwise.