Arlington August 2003 Operating Results

Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, today announced August 2003 operating results for 58 AmeriHost Inn hotels in which the company has, or had, an ownership interest and which have been opened at least 13 months as of August 31, 2003. Also, the company announced: a new addition to its senior management team in the development area, the sale of three hotels, and the commencement of construction on a new hotel in Weirton, W.V.
Arlington is the nation`s largest owner and franchisee of AmeriHost Inn hotels, operating 59 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.
Same-room revenue per available room (RevPAR) in August 2003 increased 1.3 percent to $40.01, compared to August 2002. Occupancy improved 1.1 percent to 66.9 percent, while average daily rate increased slightly to $59.78.
According to Smith Travel Research, preliminary results for August 2003 indicate that RevPAR for the midscale without food and beverage segment of the lodging industry will be flat to up 2 percent, compared to August 2002. “We are extremely encouraged by our positive August results, as well as the industry trend,” said Jerry H. Herman, president and chief executive officer. “Our leisure business remains strong, and we`re hopeful that business travel will soon show signs of a rebound. As previously announced, we have implemented several initiatives to improve both occupancy and average daily rate at our hotels, including the addition of a new corporate revenue manager in September 2003 to help maximize all of our hotel room distribution channels with a goal of improving revenues company-wide. The new revenue manager will focus on several key areas, including the Internet and GDS distribution channels, as well as other areas where we feel there is significant revenue enhancement opportunity. We look forward to seeing the positive results of these efforts in both the short and long term.”
New Senior Vice President of Construction and Development

- To support Arlington`s expanded development strategy, the company announced the appointment of Stephen Harris as senior vice president, construction and development. “Steve will assume leadership of the company`s construction and development department, and will spearhead new construction activities, an area which is expected to significantly expand over the next few years,” Herman said. “Steve`s department also will assume responsibility for our hotels` ongoing capital expenditure, preventative maintenance, and energy management programs. He brings to Arlington nearly 20 years in leadership roles in the development, construction, and renovation of hotels and commercial real estate.”
A registered architect, Harris`s career has focused on nationwide, multi-site, high volume development and capital expenditure programs for several companies. Most recently, he was director, technical services, for Six Continents Hotels, responsible for directing renovation projects at 110 hotels in the United States and Canada.
In other development activity, Arlington Hospitality announced it began construction on a 79-room AmeriHost Inn hotel 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 [email protected] or by telephone at (847) 228-5401, ext. 312.
During August, as previously announced, the company sold one wholly owned AmeriHost Inn hotel, located in Fontana, Calif. In September to date, the company has sold two wholly owned AmeriHost Inn hotels, one located in Jacksonville, Ill. And the other located in New Martinsville, W.V., resulting in three wholly-owned AmeriHost Inn hotels sold during the 2003 third quarter to date. 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.
Through August 31, 2003, and prior to its sale in September, the Jacksonville AmeriHost Inn hotel was owned by a joint venture in which the company had a minority ownership interest. Pursuant to a previously disclosed agreement made in 2000, the company acquired the remaining ownership interest in this hotel in September 2003, including interests held by a director of the company, using cash of approximately $830,000. The purchase and subsequent sale of this hotel eliminates the last remaining related-party relationship between the company and its directors. Since the significant changes in the composition of the board last year, the company has now successfully eliminated all related-party items previously disclosed in its public filings.
Year to date in 2003, Arlington Hospitality, Inc. has sold six wholly owned AmeriHost Inn hotels, resulting in net hotel sales revenues of approximately $19.1 million and the reduction of mortgage debt of approximately $11.4 million. During the same period, Arlington 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. 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 recently 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 68 properties in 17 states, including 59 AmeriHost Inn hotels, for a total of 5,024 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.

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