Jerry H. Herman, President and CEO, commented, �We are extremely pleased to announce the opening of two newly constructed AmeriHost Inn hotels located in Willows, California and DeWitt, Michigan.  Despite the continuing challenges in the lodging industry, our Company has built nine newly constructed AmeriHost Inn hotels during the past two years.� 

Same Room RevPAR for the Company�s AmeriHost Inn hotels decreased 3.2% to $22.71 for the month of January 2003 compared to January 2002, as occupancy decreased 1.4% to 42.2% and average daily rate decreased 1.8% to $53.79.  Herman commented, �These results are reflective of the industry-wide trend of reduced corporate travel and the concerns over the economy and the possibility of war in Iraq.� 

For the year ended December 31, 2002, Smith Travel Research reported a (0.6%) decrease in RevPAR for the mid-scale without food & beverage segment of the lodging industry, versus a 3.7% increase for the Company�s AmeriHost Inn hotels.  Herman continued, �In this difficult time for hotels and the overall economy, the strong performance of our AmeriHost Inn hotels in 2002 is a tribute to the strength of our Company�s employees and hotel product.�

Arlington Hospitality sells existing AmeriHost Inn hotels, as well as other branded hotels, as part of its hotel development strategy.  These hotels are wholly owned by the Company, leased or owned by a joint venture in which the Company is a partner.  The Company typically facilitates the sale of hotels owned by joint ventures and landlords.  Arlington sold two wholly owned AmeriHost Inn hotels during January and February 2003, including the AmeriHost Inn hotel in Willows, California which was built by the Company and opened on January 31, 2003.  The Company expects these sales to generate first quarter 2003 revenue of approximately $6.5 million, and the reduction of debt of approximately $4.2 million.

The Company currently has three AmeriHost Inn hotels and two other branded hotels under contract for sale, including hotels owned by joint ventures.  These sales are expected to close during 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 as of the date the sale transactions close.  One of the previously disclosed AmeriHost Inn hotels currently under contract for sale is expected to generate pretax income of approximately $1.3 million, as adjusted, including the gain recognized from an insurance settlement of approximately $300,000 in the fourth quarter of 2002.  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 sale of AmeriHost Inn hotels allows the Company to realize a development incentive fee from its agreement with Cendant Corporation in addition to any profits realized from the sale.  The Company also benefits from a long term royalty sharing agreement with Cendant from each AmeriHost Inn hotel not owned by the Company that is in the franchise system.  The above-mentioned anticipated results from these sales do not include any of these fees and payments from Cendant. 

The forecasted amounts of revenue and pretax income described above relate solely to closed or pending sales activities.  Such 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. 

During January 2003, the Company opened two newly constructed AmeriHost Inn hotels for its own account, one in Willows, California which was subsequently sold, and one in DeWitt, Michigan.  Currently, the Company has two AmeriHost Inn hotels under construction, including one wholly owned hotel and one joint venture.  These hotels are expected to open during the next six months.  The Company also has several additional hotel projects in various stages of the pre-construction development process. 

From time to time, the Company may utilize cash to purchase its own common stock.  Currently, the Board of Directors has authorized the Company to buy back, at any time and without notice, up to 1,000,000 shares of it own common stock under certain conditions.

Arlington Hospitality, Inc. is a publicly traded hotel management and development company that builds, manages and sells mid-priced hotels throughout the United States, primarily under the AmeriHost Inn brand.  Arlington Hospitality, Inc. owns or manages 72 properties in 17 states, including 62 AmeriHost Inn hotels, and 10 other branded hotels, for a total of 5,296 rooms, with two additional AmeriHost Inn & Suites hotels under construction. 

The statements appearing in this press release can be construed as forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 

Cendant Corporation (NYSE:  CD) is the franchisor of the AmeriHost Inn brand.