EXHIBIT 99.1
[ARLINGTON HOSPITALITY, INC. LETTERHEAD]
For Immediate Release
CONTACT: MEDIA CONTACT:
James B. Dale, Chief Financial Officer Jerry Daly or Carol McCune
847-228-5401 x 361 703-435-6293
jimdale@arlingtonhospitality.com jerry@dalygray.com
ARLINGTON HOSPITALITY, INC. ANNOUNCES TEMPORARY AGREEMENT
WITH HOTEL LANDLORD, FEBRUARY 2004 RESULTS
ARLINGTON HEIGHTS, Ill., March 16, 2004--Arlington Hospitality, Inc.
(Nasdaq/NM: HOST), a hotel development and management company, today announced a
temporary letter agreement with the landlord of 21 AmeriHost Inn hotels operated
by the company, and February 2004 same-room operating results for the AmeriHost
Inn hotels in which the company has an ownership interest. The February 2004
same-room results include 55 AmeriHost Inn hotels which have been opened for at
least 13 months.
TEMPORARY AGREEMENT WITH PMC COMMERCIAL TRUST
As previously announced, the company had entered into discussions with
PMC Commercial Trust ("PMC") (AMEX: PCC), regarding 21 AmeriHost Inn hotels
owned by PMC, which are leased and operated by a wholly-owned subsidiary of
Arlington Hospitality. The company seeks to restructure the lease agreements, in
order to improve operating results and cash flow with respect to these hotels,
and to agree on a plan that would transfer these hotels to other operators
through the sale of the properties.
On March 12, 2004 the company, through the wholly-owned subsidiary,
entered into a temporary letter agreement with PMC, which expires on April 30,
2004. The temporary letter
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agreement provides that base rent will continue to accrue at the rate of
approximately $445,000 per month, as set forth in the lease agreements; however,
the base rent payments required to be paid on March 1, 2004 and April 1, 2004
were reduced to approximately $360,000 per month, with the March 1, 2004 payment
being due and payable upon execution of the temporary letter agreement. In
addition, the company's subsidiary was allowed to utilize $200,000 of its
security deposit held with PMC to fund these payments.
Upon the expiration of the temporary letter agreement on April 30,
2004, the deferred portion of the base rent (approximately $170,000) will be
payable, and the security deposit is to be restored to its March 12, 2004
balance. The temporary letter agreement also resolved all material outstanding
open issues existing between the company's subsidiary and PMC regarding capital
expenditure escrow account contributions and reimbursements, and provided for
the gathering and sharing of certain information regarding a possible
restructuring of the lease.
The company and PMC are in ongoing discussions regarding such a
possible restructuring of the lease. While the objective is to reach a
restructured agreement prior to the expiration of the temporary letter
agreement, there can be no assurance that the leases will be restructured on
terms and conditions acceptable to the company and its subsidiary, if at all, or
that a restructuring will improve operations and cash flow, or provide for the
sale of the hotels to third party operators.
FEBRUARY RESULTS
Same-room revenue per available room (RevPAR) in February 2004
decreased 0.7 percent to $27.89, compared to February 2003. Occupancy decreased
3.7 percent to 49.2 percent,
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and average daily rate (ADR) increased 3.0 percent to $56.67. However, total
room revenue on a same-room basis for the month of February 2004 compared to
February 2003 increased 2.8 percent as a result of the extra day for leap year
in 2004.
Two Months
One Month Ended Ended Twelve Months Ended
February 29 February 29 February 29
--------------- ------------ -------------------
Occupancy - 2004 49.2% 45.3% 56.5%
Occupancy - 2003 51.1% 46.2% 56.6%
Increase (decrease) (3.7%) (1.9%) 0.2%
Average Daily Rate - 2004 $56.67 $55.68 $57.31
Average Daily Rate - 2003 $55.03 $54.35 $57.16
Increase (decrease) 3.0% 2.4% 0.3%
RevPAR - 2004 $27.89 $25.19 $32.39
RevPAR - 2003 $28.10 $25.10 $32.35
Increase (decrease) (0.7%) 0.4% 0.3%
According to Smith Travel Research, preliminary results for February
2004 indicate that RevPAR for the midscale without food and beverage segment of
the lodging industry will improve between 2 and 4 percent, compared to February
2003.
SALES/DEVELOPMENT ACTIVITY
The company did not sell any hotels since its last sales development
update. Currently, the company has six hotels under contract for sale, which are
expected to be consummated within the next six months. When the company has
hotels under contract for sale, even 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.
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For more information regarding Arlington's hotels for sale and
development opportunities either on a joint venture or turnkey basis, contact
Stephen Miller, Senior Vice President - Real Estate and Business Development via
email at stevem@arlingtonhospitality.com, or by telephone at (847) 228-5401,
ext. 312.
ABOUT ARLINGTON HOSPITALITY
Arlington Hospitality, Inc. is a hotel development and management
company that builds, operates and sells mid-market hotels. Arlington is the
nation's largest owner and franchisee of AmeriHost Inn hotels, a 103-property
mid-market, limited-service hotel brand owned and presently franchised in 22
states and Canada by Cendant Corporation (NYSE: CD). Currently, Arlington
Hospitality, Inc. owns or manages 64 properties in 17 states, including 57
AmeriHost Inn hotels, for a total of 4,655 rooms, with additional AmeriHost Inn
& Suites hotels under development.
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. For a discussion of these factors,
see the Company's report on Form 10-Q for the quarter ended September 30, 2003
under the section headed "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Factors Affecting Future Performance."