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 DELISTING
                         FROM THE NASDAQ SMALLCAP MARKET

         ARLINGTON HEIGHTS, IL., August 29, 2005 - Arlington Hospitality, Inc.
(NASDAQ: HOSTE) (the "Company") announced today that on August 23, 2005 it
received notice from the Nasdaq Listing Qualification Department stating that
the Company's securities will be delisted from The Nasdaq SmallCap Market
effective with the open of business on Thursday, September 1, 2005 as a result
of the Company's failure to file its quarterly report on Form 10-Q for the
quarter ended June 30, 2005.

         As a result of the Company's failure to satisfy the requirements of
Marketplace Rule 4310(c)(14), a fifth character "E" was added to the Company's
trading symbol at the opening of business on August 25, 2005, and the Company's
securities will be delisted from The Nasdaq Stock Market at the opening of
business on September 1, 2005, unless the Company appeals the decision of the
Nasdaq Staff. The Company has until August 31, 2005 to appeal the decision;
however, the Company does not expect to submit an appeal by this date. The
Company is continuing to evaluate its strategic alternatives, including the
filing of a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The Company's shares may become eligible to trade on the OTC
Bulletin Board, if a market maker makes an application to register and quote the
Company's securities in accordance with SEC Rule15c2-11, such application is
cleared, and provided further, that the Company does not become the subject of a
bankruptcy proceeding. There can be no assurance that trading on the OTC
Bulletin Board will occur.

         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 mid-market,
limited-service hotel brand owned and presently franchised in 20 states and
Canada by Cendant Corporation (NYSE: CD), with over 100 properties. Currently,
Arlington Hospitality, Inc. owns or manages 35 AmeriHost Inn hotels in nine
states, for a total of 2,400 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-K for the year ended December 31, 2004 and report on Form 10-Q
for the three months ended March 31, 2005, under the section headed
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors."