Filed by Apple Hospitality Two, Inc.
                           Pursuant to Rule 425 under the Securities Act of 1933
                                             Subject Company: Apple Suites, Inc.
                                               Commission File Number: 000-30491



Text of Item 5 of Current Report on Form 8-K filed by Apple Hospitality Two,
Inc. on October 25, 2002.

On October 23, 2002, the boards of directors of Apple Hospitality Two, Inc.
("Hospitality") and Apple Suites, Inc. ("Suites") approved a merger transaction
in which Suites will become a subsidiary of Hospitality. On October 24, 2002, an
agreement and plan of merger was signed by Hospitality, Hospitality Acquisition
Company and Suites.

In the merger, each Suites common share will be converted into the right to
receive one Hospitality unit, each unit consisting of one Hospitality common
share and one Hospitality Series A preferred share, unless the Suites common
shareholder elects to receive $10.00 in cash per Suites common share subject to
a $25 million limit on the cash to be paid in the merger. If more Suites common
shareholders elect to receive cash than the maximum amount of cash consideration
to be paid by Hospitality, Hospitality will distribute the cash pro rata and
round fractional shares to the nearest whole share. Hospitality, at its sole
discretion prior to the effective time of the merger, may determine to increase
the maximum amount of cash consideration to an amount not to exceed $30 million.

As a result of the merger, the 240,000 outstanding Suites Class B convertible
shares will be convertible into 480,000 Suites common shares. Pursuant to the
merger, the Suites Class B convertible shares will be converted into the right
to receive 480,000 Hospitality units, or one Hospitality unit for each Suites
common share, the same exchange ratio applicable to Suites common shareholders.

The merger is expected to be treated as a tax free reorganization for federal
income tax purposes, except for cash, if any, received by Suites shareholders.

Holders of Hospitality units will continue to own their existing Hospitality
units after the merger.

In connection with the merger, Hospitality will pay an extraordinary dividend to
Hospitality common shareholders. The extraordinary dividend will consist of an
aggregate payment of $15 million which will be divided equally among the
outstanding Hospitality common shares (approximately $0.49 per share) and is
contingent on the merger becoming effective. The record date for the
extraordinary dividend will be the record date of the Hospitality common
shareholders' meeting to approve the merger or another date that the Hospitality
Board of Directors declares as long as the record date is prior to the
effectiveness of the merger. The payment date for the extraordinary dividend
will be after the effective date of the merger.

In connection with the merger, the boards of directors of Hospitality and Suites
have determined that the companies will become self-advised contingent upon the
merger occurring. Consequently, the advisory agreements Hospitality and Suites
have with Apple Suites Advisors, Inc. will be terminated concurrently with the
merger and, thereafter, no further advisory fees will be due thereunder. As a
result of this termination, the 240,000 Hospitality Series B convertible
preferred shares held by Mr. Knight and two business associates would be
converted into 1,272,000 Hospitality units. To implement the termination of the
advisory agreement for Hospitality, Hospitality and Glade M. Knight, the sole
shareholder of Apple Suites Advisors, Inc., have reached an agreement in
principle to acquire all of Mr. Knight's stock in Apple Suites Advisors instead
of paying a $6.48 million termination fee due Apple Suites Advisors under the
advisory agreement. In this acquisition, Mr. Knight would receive a cash payment
of $2 million and a non-interest-bearing promissory note due in 2006 in a
principal amount of $4.48 million. This acquisition is subject to the execution
of definitive documentation and is conditioned upon the effectiveness of the
merger. The property acquisition and disposition agreements that Hospitality and
Suites have with Apple Suites Realty, Inc., which is owned by Mr. Knight, will
remain in effect.



The merger is subject to a number of conditions including the approval of the
holders of at least a majority of Hospitality common shares present and voting
at the Hospitality meeting called to consider the merger, excluding Hospitality
common shares owned by or voted under the control of a Hospitality or Suites
director. The merger also requires the approval of the holders of a (i) majority
of the outstanding Suites common shares and (ii) the holders of a majority of
Suites common shares present and voting at the Suites meeting called to consider
the merger, excluding Suites common shares owned by or voted under the control
of a Hospitality or Suites director. The merger is expected to close shortly
after the special meetings of shareholders for both companies if shareholders
approve the merger. A registration statement relating to the approval of the
merger and the offering of the securities to be issued with the merger will be
filled with the Securities and Exchange Commission shortly.

Hospitality is an externally advised real estate investment trust owing
upper-end extended-stay hotels in select metropolitan areas throughout the
United States. As of October 23, 2002, Hospitality owned 48 extended-stay
hotels, comprising 5,767 suites as a part of the Residence Inn(R) by Marriott(R)
Franchise.

Suites is an externally advised real estate investment trust owing upper-end
extended-stay hotels in select metropolitan areas throughout the United States.
As of October 23, 2002, Suites owned 17 extended-stay hotels, comprising 1,922
Suites as part of the Homewood Suites(R) by Hilton(R) franchise.

This Current Report on Form 8-K does not constitute a solicitation of proxies or
an offer of any securities for sale. Apple Hospitality Two, Inc. intends to file
with the Securities and Exchange Commission a registration statement, that will
contain the prospectus of Apple Hospitality Two, Inc. relating to the capital
stock to be issued in the merger, and the proxy statement of Apple Hospitality
Two, Inc. and Apple Suites, Inc. relating to the special meetings of
shareholders at which the agreement and plan of merger will be considered and
voted upon by the shareholders. Shareholders are urged to read the proxy
statement/prospectus along with any other documents filed with the SEC when they
become available because they will contain important information. Shareholders
will be able to obtain a free copy of the registration statement, including the
exhibits filed therewith at the SEC's website at www.sec.gov. In addition,
shareholders may obtain the proxy statement/prospectus and other documents filed
with the SEC free of charge by requesting them from the Corporate Secretary in
writing at Apple Hospitality Two, Inc., Attention: Corporate Secretary, 10 South
Third Street, Richmond, Virginia 23219, or by telephone at (804) 344-8121.