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

"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.

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.

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.