--------------------------------------------------------------------------------
                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               ------------------



                                   FORM 10-KSB


                               ------------------



                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001


                               ------------------



                         Commission file number 33-11096

                         CRI HOTEL INCOME PARTNERS, L.P.
             Organized pursuant to the Laws of the State of Delaware


                               ------------------



        Internal Revenue Service - Employer Identification No. 52-1500621

                 11200 Rockville Pike, Rockville, Maryland 20852

                                 (301) 468-9200


                               ------------------



               Securities registered pursuant to Section 12(g) of
                                    the Act:

                        BENEFICIAL ASSIGNEE CERTIFICATES


                               ------------------



Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB [X]

State issuer's revenues for its most recent fiscal year $9,634,280.

The  beneficial  assignee  certificates  of the registrant are not traded in any
market.  Therefore,  the beneficial  assignee  certificates had neither a market
selling  price nor an average bid or asked price within the 60 days prior to the
date of this filing.


--------------------------------------------------------------------------------
<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                        2001 ANNUAL REPORT ON FORM 10-KSB

                                TABLE OF CONTENTS



                                                                         Page

                                     PART I

Item 1.   Business....................................................... I-1
Item 2.   Properties..................................................... I-2
Item 3.   Legal Proceedings.............................................. I-2
Item 4.   Submission of Matters to a Vote of Security Holders............ I-2


                                     PART II

Item 5.   Market for the Registrant's Beneficial Assignee Certificates
            and Related Partnership Matters ............................. II-1
Item 6.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations.................................... II-3
Item 7.   Financial Statements........................................... II-9
Item 8.   Changes in and Disagreements with Accountants
            on Accounting and Financial Disclosure....................... II-9


                                    PART III

Item 9.   Directors and Executive Officers of the Registrant............. III-1
Item 10.  Executive Compensation......................................... III-2
Item 11.  Security Ownership of Certain Beneficial Owners and
            Management................................................... III-2
Item 12.  Certain Relationships and Related Transactions................. III-3
Item 13.  Exhibits and Reports on Form 8-K............................... III-3

Signatures............................................................... III-5

Financial Statements..................................................... III-7



<PAGE>
                                     PART I


ITEM 1. BUSINESS
        --------

Development and Description of Business
---------------------------------------

     CRI Hotel Income Partners,  L.P. (the Partnership) is a limited partnership
which was formed under the Delaware  Revised Uniform Limited  Partnership Act as
of  September  23,  1986 and will  continue  until  December  31,  2016,  unless
dissolved earlier in accordance with the Partnership Agreement.  The Partnership
was formed for the purpose of investing in hotels that were  acquired  from Days
Inns of America, Inc. (Days Inns). The Partnership's primary objectives continue
to be cash flow growth and capital  appreciation.  However,  the  attainment  of
these objectives is principally dependent on the hotels' operations.  The hotels
are operated by Bryanston Group d/b/a Buckhead Hotel  Management  Company,  Inc.
(Buckhead),  formerly known as Days Inns  Management  Company,  Inc.,  under the
nationally recognized franchise name of Days Inns.

     The General  Partner of the  Partnership is CRICO Hotel  Associates I, L.P.
(CRICO Associates), a Delaware limited partnership, the general partner of which
is C.R.I., Inc. (CRI), a Delaware corporation. The General Partner has authority
in the overall  management and control of the Partnership.  The Assignor Limited
Partner of the Partnership is CRICO Hotel Fund, Inc. (CRICO Hotel Fund).

     The Registration Statement of the Partnership was declared effective by the
Securities and Exchange  Commission (SEC) on April 17, 1987, and a prospectus of
the same date was  printed.  The  Partnership  registered  a total of  6,000,000
Beneficial  Assignee  Certificates  (BACs),  at $25 per BAC,  with the SEC. BACs
represent beneficial  assignments of limited partner interests which are held by
CRICO  Hotel  Fund.  BACs were to be offered in series,  with  Series A having a
minimum of 196,000  BACs,  or  $4,900,000,  and a maximum of 2,344,000  BACs, or
$58,600,000.  The Partnership terminated the Series A offering on March 31, 1988
with 868,662  BACs,  or gross  proceeds of  $21,716,550,  and does not intend to
offer another series.

     The  number  of BACs  sold,  along  with  debt  instruments  issued  by the
Partnership,  generated  sufficient  proceeds  to  purchase  five hotels and one
leasehold interest.  As of December 31, 2001, the Partnership  remained invested
in four hotels and one leasehold interest, as discussed below.

Employees
---------

     The  Partnership  has no  employees.  Services  are  performed  by CRI, the
general partner of the General Partner, and agents retained by it. See the notes
to  the  financial  statements  for  additional   information  concerning  these
services.

                                       I-1

<PAGE>
                                     PART I

ITEM 2. PROPERTIES
        ----------

     A  schedule  of  the  hotels  and  the  leasehold  interest  owned  by  the
Partnership as of December 31, 2001, follows.

<TABLE>
<CAPTION>
                                                                                  ORIGINALLY                      AMOUNT OF
    NAME AND LOCATION              NO. OF ROOMS       DATE ACQUIRED               FINANCED BY                     PURCHASE
------------------------           ------------       -------------       ---------------------------          ---------------
<S>                                <C>                <C>                 <C>                                  <C>
Minneapolis Days Inn                   130               11/01/87         Proceeds of public offering             $4,800,000
  Minneapolis, Minnesota                                                  and Zero Coupon Purchase
                                                                          Money Note

Plymouth Days Inn                      115               12/30/87         Proceeds of public offering             $4,000,000
  Plymouth, Minnesota                                                     and Zero Coupon Purchase
                                                                          Money Note

Roseville Days Inn                     114               03/01/88         Proceeds of public offering             $4,200,000
  Roseville, Minnesota                                                    and Zero Coupon Purchase
                                                                          Money Note

Clearwater Days Inn                    120               04/01/88         Proceeds of public offering             $3,750,000
  Clearwater, Florida                                                     and Zero Coupon Purchase
                                                                          Money Note

Scottsdale Days Inn                    165               07/01/88         Proceeds of public offering             $2,000,000
  Scottsdale, Arizona
  (leasehold interest)

</TABLE>

ITEM 3. LEGAL PROCEEDINGS
        -----------------

     There are no material pending legal proceedings to which the Partnership is
a party.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
        ---------------------------------------------------

     No matters were  submitted to a vote of security  holders during the fourth
quarter of 2001.

                                       I-2

<PAGE>
                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S BENEFICIAL ASSIGNEE
        -----------------------------------------------
          CERTIFICATES AND RELATED PARTNERSHIP MATTERS
          --------------------------------------------

     (a)  There is no  established  market  for the  purchase  and sale of BACs,
          although various informal  secondary market services exist. Due to the
          limited markets, however, investors may be unable to sell or otherwise
          dispose of their BACs.

          On December  12,  2000,  Everest  Properties  (Everest),  a Beneficial
          Assignee  Certificate  (BAC) holder of the  Partnership,  initiated an
          unregistered  tender  offer  to  purchase  no  more  than  4.3% of the
          outstanding units of the Partnership at a price of $3.75 per BAC unit.
          The price offered was  determined  solely at the discretion of Everest
          and did not  necessarily  represent the fair market value of each BAC.
          The Everest offer expired on January 11, 2001.

          On December 13, 2000, Madison Capital  (Madison),  a BAC holder of the
          Partnership,  initiated  an  unregistered  tender offer to purchase no
          more than 3.58% of the outstanding units of the Partnership at a price
          of $3.75 per BAC unit. The price offered was determined  solely at the
          discretion  of  Madison  and did not  necessarily  represent  the fair
          market  value of each BAC.  The Madison  offer  expired on January 12,
          2001.

          The  General  Partner  has reason to believe  that in  December  2001,
          Sierra Capital (Sierra), a BAC holder of the Partnership, initiated an
          unregistered  tender  offer  to  purchase  outstanding  units  of  the
          Partnership  at a price of $5 per BAC  unit.  The  price  offered  was
          determined  solely at the discretion of Sierra and did not necessarily
          represent  the fair market value of each BAC. The General  Partner has
          no other information regarding this offer.

          The General  Partner did not express any opinion and remained  neutral
          toward the offers for the purchase of BACs described above.

          If  more  than  five  percent  of  the  total   outstanding  BACs  are
          transferred due to sale in any one calendar year (not counting certain
          exempt  transfers),  the  Partnership  could be  taxed as a  "publicly
          traded  partnership," with potentially severe tax implications for the
          Partnership and its investors.  Specifically, the Partnership would be
          taxed as a corporation  and the income and losses from the Partnership
          would no longer be considered a passive activity. From January 1, 2000
          through August 4, 2000,  approximately  4.9% of outstanding  BACs were
          sold.  Accordingly,  to remain  within the five  percent  safe harbor,
          effective  August 7, 2000,  the  General  Partner  of the  Partnership
          halted  recognition  of any  transfers  that  exceeded the safe harbor
          limit  through  December  31,  2000.  This halt was  lifted  effective
          January  1,  2001.  From  January  1, 2001  through  March  14,  2001,
          approximately  4.8% of  outstanding  BACs were sold.  Accordingly,  to
          remain within the five percent safe harbor,  effective March 19, 2001,
          the General Partner halted  recognition of any transfers that exceeded
          the safe harbor limit through  December 31, 2001. This halt was lifted
          effective January 1, 2002.

     (b)  As of March 8, 2002, there were approximately 1,300 registered holders
          of BACs in the Partnership.

                                      II-1

<PAGE>
                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S BENEFICIAL ASSIGNEE
        -----------------------------------------------
          CERTIFICATES AND RELATED PARTNERSHIP MATTERS - Continued
          --------------------------------------------

     (c)  Cash  available  for  distribution,  as  defined  in  the  Partnership
          Agreement,  is intended to be distributed on a quarterly  basis within
          sixty days after the end of each  calendar  quarter.  The  Partnership
          paid or accrued  distributions of $347,464 and $443,019 to BAC holders
          during 2001 and 2000, respectively.  On March 1, 2002, the Partnership
          paid a cash distribution to BAC holders for the quarter ended December
          31, 2001. See Part II, Item 6, Management's Discussion and Analysis of
          Financial   Condition  and  Results  of  Operations,   for  additional
          information concerning the distributions during these years, and for a
          discussion of factors which may affect future distribution levels.



                                      II-2

<PAGE>
                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS
          -----------------------------------

     CRI Hotel Income Partners, L.P.'s (the Partnership) Management's Discussion
and Analysis of Financial  Condition and Results of Operations  section contains
information  that  may  be  considered  forward  looking,  including  statements
regarding  the effect of  governmental  regulations.  Actual  results may differ
materially from those  described in the forward  looking  statements and will be
affected by a variety of factors including seasonality with respect to the hotel
industry,  national and local economic conditions, the general level of interest
rates, governmental regulations affecting the Partnership and interpretations of
those  regulations,   the  competitive  environment  in  which  the  Partnership
operates, and the availability of working capital.

     On  September  11,  2001,  terrorists  launched  attacks on the World Trade
Center in New York City and the Pentagon in Washington,  D.C. The attacks had an
immediate  and  significant   adverse  effect  on  the  United  States  economy,
particularly on the travel and hospitality  industries.  The hotels in which the
Partnership  is invested  have been  adversely  affected in the aftermath of the
September 11th  terrorist  attacks.  Since the attacks,  some of the hotels have
experienced significant short-term declines in occupancy and revenue compared to
the prior  year.  The  hotels  which  were most  affected  were the  Clearwater,
Plymouth,  and Roseville  hotels.  Thus far in 2002, these declines appear to be
continuing at the Plymouth and Roseville hotels,  while the Clearwater hotel has
experienced  results  more  consistent  with 2001 actual  results.  Although the
Scottsdale  hotel  was able to offset  declines  in the  average  room rate with
increased  occupancy  during  the  fourth  quarter  of 2001,  the hotel has seen
declines in occupancy  coupled with continued  declines in the average room rate
thus far in 2002.  Weaker  hotel  performance  could  impact  the  Partnership's
ability  to pay  operating  expenses  and short  term  commitments,  to fund the
working capital and capital improvements reserves, to fund capital projects, and
to pay  distributions  to BAC holders.  The  Partnership is currently  unable to
estimate  the impact that the  September  11th  terrorist  attacks or any future
terrorist  attacks or other  developments  in the war on terrorism could have on
its operations, liquidity, or capital resources.

     As a  result  of  the  uncertainty,  the  General  Partner  decided  it was
necessary to conserve cash, and therefore suspended  distributions for the third
quarter of 2001. Despite the continued uncertainty,  the General Partner decided
to make a distribution  for the fourth quarter of 2001. The General Partner will
continue to monitor the situation, and will reevaluate the Partnership's ability
to make a distribution to BAC holders for the first quarter of 2002 in May 2002.
In the meantime,  the General Partner continues to work closely with the hotels'
manager to  institute  stricter  cost-cutting  and  cost-control  measures in an
effort to maintain  liquidity  at the  hotels.  Also,  the  General  Partner has
temporarily halted all major hotel renovations.  At present, it is expected that
major renovations will resume later in 2002.

                          Financial Condition/Liquidity
                          -----------------------------

     The  Partnership  expects that the hotels in the  aggregate  will  generate
sufficient cash flow to achieve a positive cash flow after  operating  expenses.
In addition to the periodic  replacement  of fixed  assets,  which are primarily
funded from the capital improvements reserve, the General Partner has determined
that certain capital improvements are needed to enhance the marketability of the
hotels.  Since 1997, the Partnership  funded a total of approximately $2 million
from the working capital reserve to the hotels for such capital improvements.

     During 2000, the General Partner approved a $930,000 renovation and capital
improvement  project  for the  Scottsdale  hotel,  to be funded from the working
capital  reserve of the  Partnership  in the amounts of $488,000 and $292,000 in
2000 and 2001, respectively, and from the Scottsdale replacements reserve in the
amounts of $90,000  and  $60,000 in 2000 and 2001,  respectively.  During  2000,
$481,955  was  funded  by the  Partnership  and  $51,785  was  funded  from  the
Scottsdale  replacements reserve for the Scottsdale  renovation project.  During
2001,

                                      II-3

<PAGE>
                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

$252,726 was funded from the  Partnership's  working capital reserve and $92,050
was funded from the  Scottsdale  replacements  reserve to complete this project,
for a total of $878,516, which is less than the approved amount of $930,000.

     During 2000, the General Partner approved a $145,000 renovation project for
the  Roseville  hotel,  to be funded  from the  working  capital  reserve of the
Partnership in the amount of $70,000 and from the Roseville replacements reserve
in the amount of $75,000. During 2000, $20,409 was funded from the Partnership's
working capital  reserve and $75,526 was funded from the Roseville  replacements
reserve for this project. During 2001, $46,192 was funded from the Partnership's
working capital reserve to complete this project, for a total of $142,127, which
is less than the approved amount of $145,000.

     In April 2001, the Partnership  approved a $280,000  renovation project for
the  Minneapolis  hotel.  The cost was to be  funded  from the  working  capital
reserve of the  Partnership  in the amount of $217,000 and from the  Minneapolis
replacements  reserve in the amount of $63,000.  During 2001, $72,813 was funded
from the  Partnership's  working capital reserve and $42,917 was funded from the
Minneapolis  replacements  reserve for this  project.  In  September  2001,  the
General Partner  temporarily  halted further  expenditures on this project,  but
expects to resume this project later in 2002.

     The Partnership's  liquidity and future results of operations are primarily
dependent upon the performance of the underlying hotels. Hotel operations may be
materially  affected by changing market conditions and by seasonality  caused by
variables  such as  vacations,  holidays and climate.  The  Partnership  closely
monitors its liquidity and cash flow in an effort to ensure that sufficient cash
is available for operating  requirements,  and for possible distributions to BAC
holders.  See above for a  discussion  of the  impact  of the  recent  terrorist
attacks on the Partnership's operations and liquidity.

     The Partnership's net cash provided by the hotels' operating activities for
2001 and  2000 was  adequate  to  support  operating,  investing  and  financing
requirements,  and to  declare  distributions  to BAC  holders  and the  General
Partner.  The Partnership  anticipates  that existing cash and cash  equivalents
along with future cash flows from the hotels' operations, in the aggregate, will
be sufficient to pay operating expenses and short term commitments,  and to fund
the working capital and capital improvements reserves. Current liabilities as of
December 31, 2001 totaled $972,482, which represents a $33,399 increase from the
balance at December 31, 2000. This increase  resulted from increases in accounts
payable and accrued expenses,  distributions payable, and the short-term portion
of mortgage payable, offset by a decrease in hotel trade payables.

Financing
---------

     On December  19, 1997,  the  Partnership  refinanced  the Zero Coupon Notes
which were originally issued in connection with the Partnership's acquisition of
the hotels.  The current loan bears  interest at the rate of 7.72% per annum and
matures  January  1,  2008.  On that  date,  a balloon  payment in the amount of
$7,273,441  will be due. In accordance  with the terms of the current loan,  the
Partnership  began paying monthly  installments of principal and interest in the
amount of  $67,049  on the  first day of each  month  beginning  February  1998.
Subject to prepayment  terms, as discussed below, the current mortgage loan does
not  preclude  the  future  sale  of the  hotels,  either  individually  or as a
portfolio.

                                      II-4

<PAGE>
                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

     Under the terms of the current loan,  such loan may be prepaid,  subject to
terms and  prepayment  penalties as set forth in the note.  The current loan has
been  securitized  in a "no lock"  program,  which permits the prepayment of the
current loan with a three percent  premium  during the first three years,  a two
percent  premium during the next three years,  a one percent  premium during the
next three years,  and no penalty during the tenth and final year. See the notes
to the financial  statements for further information  concerning the acquisition
and servicing of this loan.

     The Partnership  made  installments  of principal and interest  aggregating
$804,589  during each of 2001 and 2000. The  Partnership's  balance on this loan
was $8,396,298 and $8,537,759 as of December 31, 2001 and 2000, respectively.

Real Estate Tax And Capital Improvements Reserve Escrows
--------------------------------------------------------

     In addition to the monthly  loan  installments,  as  discussed  above,  the
Partnership   also  makes  monthly  payments  which  are  escrowed  for  capital
improvements  reserves and estimated  annual real estate taxes.  During 2001 and
2000, the Partnership  made escrow deposits  aggregating  $232,374 and $232,374,
respectively, for capital improvements and $421,397 and $470,990,  respectively,
for estimated  annual real estate taxes.  As of December 31, 2001 and 2000,  the
servicer held $92,953 and $99,854,  respectively,  for capital  improvements and
$83,893 and $119,232,  respectively,  for real estate taxes.  Additionally,  the
servicer  held $3,522 for  insurance  reserves as of both  December 31, 2001 and
2000.

Working Capital Reserve; Intercompany Transactions
--------------------------------------------------

     The working  capital reserve of $192,910 and $8,456 as of December 31, 2001
and 2000, respectively, represents cash and cash equivalents, as defined in Note
1.e. of the accompanying  financial statements,  which are maintained as working
capital for the  Partnership.  The working  capital  reserve may be increased or
reduced by the General Partner as it deems appropriate.

     On January 6, 2000,  the  Partnership  advanced  $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing  loan.  On February  4, 2000,  the
Scottsdale hotel repaid $70,000 of this loan. The remaining  $30,000 balance was
repaid on March 1, 2000.

     On June 28, 2000, the Partnership advanced $150,000 to the Scottsdale hotel
in the form of a  non-interest  bearing loan,  which was repaid during the first
quarter of 2001. This intercompany  balance was eliminated in the preparation of
the accompanying balance sheet at December 31, 2000.

     On September 27, 2001, the Partnership  advanced $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing  loan.  On February 27, 2002,  the
Scottsdale  hotel repaid $75,000 of this loan. The remaining  $25,000 balance is
expected to be repaid later in March 2002.  This  intercompany  balance has been
eliminated in the preparation of the accompanying  balance sheet at December 31,
2001.

                                      II-5

<PAGE>
                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

Distributions to BAC holders
----------------------------

     Distributions paid or accrued to BAC holders of record during 2001 and 2000
follow.

<TABLE>
<CAPTION>
                                           2001                           2000
                                       Distributions                 Distributions to
                                        BAC holders                     BAC holders
                                  ------------------------       ------------------------
          Quarter Ended              Total         Per BAC          Total         Per BAC
          -------------           -----------      -------       -----------      -------
          <S>                     <C>              <C>           <C>              <C>
          March 31                $        --      $    --       $        --      $    --
          June 30                     173,732         0.20           147,673         0.17
          September 30                     --           --           147,673         0.17
          December 31                 173,732         0.20           147,673         0.17
                                  -----------      -------       -----------      -------
              Total               $   347,464      $  0.40       $   443,019      $  0.51
                                  ===========      =======       ===========      =======

</TABLE>

                       Results of Operations - Partnership
                       -----------------------------------

2001 versus 2000
----------------

     The Partnership's net income,  which consists  principally of revenues from
hotel  operations,  decreased  $79,891  in 2001 from  2000,  primarily  due to a
$173,680  increase  in  unallocated  operating  expenses,  offset  by a  $39,517
increase in interest and other  income,  a $41,822  increase in gross  operating
income, and a $12,450 decrease in interest expense.  The increase in unallocated
operating   expenses  was  primarily  due  to  increases  in  depreciation   and
amortization  expense,  and energy  expense,  partially  offset by  decreases in
general and administrative expense, property operations and maintenance expense,
and loss on disposal of fixed assets. The increase in gross operating income was
due to decreases in all  departmental  expense  categories with the exception of
telephone expense, which increased slightly. These savings were partially offset
by decreases in all revenue  categories,  with the  exception of rooms  revenue,
which increased.

     See the  following  discussion  for an analysis of each  hotel's  operating
results for the year 2001 versus the year 2000.

                         Results of Operations - Hotels
                         ------------------------------

Operating statistics
--------------------

     The  hotels'   results  of  operations  are  affected  by  changing  market
conditions  and by seasonality  caused by variables such as vacations,  holidays
and climate.  Based on the hotels' operating budgets and historical  trends, the
following  months should provide the highest gross operating income and net cash
flow.

                  Hotel Location                         Peak Months
                  ---------------                    ---------------------

                  Clearwater, FL                     October through April
                  Minneapolis, MN                    May through October
                  Plymouth, MN                       June through October
                  Roseville, MN                      May through October
                  Scottsdale, AZ                     January through May


                                      II-6

<PAGE>
                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

     As discussed above, the Clearwater and Scottsdale hotels,  which are now in
their  traditionally peak months,  have been adversely impacted in the aftermath
of the September 11th terrorist attacks.

     The  Partnership's  statements of income include operating results for each
of the hotels as summarized  below.  Gross  Operating  Income  represents  total
revenue from rooms, telephone, food and beverage, and rental and other, less the
related  departmental  expenses.  Operating  Income  represents  Gross Operating
Income less net unallocated  operating  expenses.  The results of operations and
average occupancy for the hotels for the years ended December 31, 2001 and 2000,
follow.

                                                    Gross Operating Income
                                                 -----------------------------
             Hotel Location                         2001              2000
             --------------                      -----------       -----------

             Clearwater, FL                      $   981,749       $   896,891
             Minneapolis, MN                       1,785,891         1,779,152
             Plymouth, MN                            846,422           933,190
             Roseville, MN                           976,040           963,140
             Scottsdale, AZ                        2,135,961         2,111,868
                                                 -----------       -----------
                 Total                           $ 6,726,063       $ 6,684,241
                                                 ===========       ===========


                                                        Operating Income
                                                 -----------------------------
             Hotel Location                          2001             2000
             --------------                      -----------       -----------

             Clearwater, FL                      $   339,304       $   260,759
             Minneapolis, MN                         945,072           931,811
             Plymouth, MN                            270,199           340,505
             Roseville, MN                           376,184           340,354
             Scottsdale, AZ                          272,567           279,625
             Depreciation and net Partnership
               operating expenses                 (1,459,455)       (1,316,842)
                                                 -----------       -----------
                 Total                           $   743,871       $   836,212
                                                 ===========       ===========


                                                        Average Occupancy
                                                 -----------------------------
             Hotel Location                         2001              2000
             --------------                      -----------       -----------

             Clearwater, FL                           55%              56%
             Minneapolis, MN                          81%              82%
             Plymouth, MN                             66%              71%
             Roseville, MN                            74%              74%
             Scottsdale, AZ                           78%              78%
                                                    ----             ----
                Weighted average occupancy (1)        72%              73%
                                                    ====             ====

(1)  Weighted  average  occupancy is computed by taking into  consideration  the
     number of rooms at each location.

2001 versus 2000
----------------

Clearwater,  Florida:  Gross operating  income and operating income increased in
2001 from 2000 as a result of an eight  percent  increase in the  average  rate,
partially offset by a one point decrease in average  occupancy.  The increase in
the average  room rate was  primarily  the result of Super Bowl XXIV,  which was
held in Tampa, Florida in January 2001. The slight decrease in average occupancy
was the net effect of a sharp  increase in  occupancy  during the first  quarter
primarily  due to the  Super  Bowl  XXIV  lodging  in  January  2001,  offset by
intermittent declines in occupancy during the remainder of 2001 due to increased
competition and the impact of the weakening  economy on tourism in the area. The
most notable declines in average  occupancy  occurred during  September  through
November 2001, in the wake of the September 11th terrorist attacks. Contributing
to the increase in operating income were decreases in general and administrative

                                      II-7

<PAGE>
                                     PART II


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        -------------------------------------------------
          CONDITION AND RESULTS OF OPERATIONS - Continued
          -----------------------------------

expense and property  operations and maintenance  expense,  partially  offset by
increases in energy expense and property taxes.

Minneapolis, Minnesota: Gross operating income and operating income increased in
2001 from 2000 as a result of a one percent increase in the average rate, offset
by a one point decrease in average  occupancy.  The Minneapolis hotel was not as
adversely  affected by the weakening  economy,  primarily due to its contract to
provide housing for students of the University of Minnesota. Contributing to the
increase  in  operating  income  were  decreases  in  property   operations  and
maintenance  expense and  marketing  expense,  partially  offset by increases in
property taxes and energy expense.

Plymouth,  Minnesota:  Gross operating  income and operating income decreased in
2001 from 2000 as a result of a five point decrease in average occupancy,  while
the average rate remained constant. The decrease in average occupancy was due to
the slowing economy coupled with the hotel's inability to replace,  in 2001, the
demand  generated by a major  convention  held in the area during 2000. The most
notable declines in average occupancy occurred during September through November
2001, in the wake of the September 11th terrorist attacks.  Partially offsetting
the decrease in operating  income were  decreases in general and  administrative
expense and property operations and maintenance expense.

Roseville,  Minnesota:  Gross operating income  increased  slightly in 2001 from
2000 as a result of a two percent  increase in the average  rate,  while average
occupancy remained constant.  The increase in the average rate was primarily due
to the NCAA Final Four college basketball playoffs held in the area during 2001.
The constant average occupancy was the net effect of increased  occupancy during
the first three quarters of the year, offset by significant decreases during the
fourth quarter.  The increases in average occupancy were primarily the result of
the NCAA Final Four college basketball playoffs and other corporate and sporting
events held in the area,  coupled with new business generated in connection with
construction projects taking place in the area. The decline in average occupancy
during the  fourth  quarter  primarily  reflected  the  impact of the  weakening
economy in the wake of the September 11th terrorist attacks. Contributing to the
increase in  operating  income  were  decreases  in general  and  administrative
expense,  marketing expense, and energy expense, partially offset by an increase
in property operations and maintenance expense.

Scottsdale,  Arizona:  Gross operating  income  increased in 2001 from 2000 as a
result  of a one  percent  increase  in the  average  rate,  while  the  average
occupancy remained constant. The Scottsdale hotel was able to achieve relatively
stable  average room rate and average  occupancy  levels,  despite the weakening
economy  and a drop in  tourism  in the area,  mainly  due to  increased  demand
resulting from marketing efforts as well as the recent renovations  performed at
the hotel. Also,  departmental expenses at the hotel were reduced significantly.
Operating  income  decreased  primarily  due to increases in marketing  expense,
general and administrative expense, energy expense, property taxes, and building
lease  expense,  partially  offset by a  decrease  in  property  operations  and
maintenance expense.

                                      II-8

<PAGE>
                                     PART II


ITEM 7. FINANCIAL STATEMENTS
        --------------------

     The information required by this item is contained in Part III.


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        -------------------------------------------------
          ACCOUNTING AND FINANCIAL DISCLOSURE
          -----------------------------------

     None.

                                      II-9

<PAGE>
                                    PART III


ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
        --------------------------------------------------

     (a), (b) and (c)

     The  Partnership  has  no  directors,  executive  officers  or  significant
     employees of its own.

     (a), (b), (c) and (e)

     The names,  ages and business  experience  of the  directors  and executive
     officers of C.R.I.,  Inc. (CRI),  the General  Partner of the  Partnership,
     follow.

William B. Dockser, 65, has been the Chairman of the Board and a Director of CRI
since 1974.  Prior to forming  CRI, he served as  President of Kaufman and Broad
Asset Management,  Inc., an affiliate of Kaufman and Broad,  Inc., which managed
publicly held limited  partnerships created to invest in low and moderate income
multifamily apartment properties.  Prior to joining Kaufman and Broad, he served
in various positions at HUD,  culminating in the post of Deputy FHA Commissioner
and Deputy Assistant Secretary for Housing Production and Mortgage Credit, where
he was responsible for all federally insured housing production programs. Before
coming to the Washington,  D. C. area, Mr. Dockser was a practicing  attorney in
Boston and served as a special  Assistant  Attorney General for the Commonwealth
of  Massachusetts.  He holds a Bachelor of Laws degree from Yale  University Law
School and a Bachelor of Arts degree, cum laude, from Harvard University.  He is
also Chairman of the Board and a Director of CRIIMI MAE Inc. and CRIIMI, Inc.

H. William Willoughby,  55, has been President,  Secretary and a Director of CRI
since  January 1990 and was Senior  Executive  Vice  President,  Secretary and a
Director  of CRI  from  1974 to  1989.  He is  principally  responsible  for the
financial  management of CRI and its associated  partnerships.  Prior to joining
CRI in 1974,  he was Vice  President  of Shelter  Corporation  of America  and a
number of its subsidiaries  dealing principally with real estate development and
equity  financing.  Before  joining  Shelter  Corporation,  he was a senior  tax
accountant with Arthur  Andersen & Co. He holds a Juris Doctor degree,  a Master
of Business  Administration  degree and a Bachelor of Science degree in Business
Administration  from the  University of South Dakota.  He is also a Director and
executive officer of CRIIMI MAE Inc. and CRIIMI, Inc.

Susan R. Campbell,  43, is Executive Vice President and Chief Operating Officer.
Prior to joining CRI in March 1985,  she was a budget analyst for the B. F. Saul
Advisory  Company.  She holds a Bachelor of Science  degree in General  Business
from the  University  of  Maryland.  Ms.  Campbell  has  resigned  her  position
effective March 29, 2002.

     (d)  There is no family relationship between any of the foregoing directors
          and executive officers.

     (f)  Involvement in certain legal proceedings.

          None.

     (g)  Promoters and control persons.

          Not applicable.

                                      III-1

<PAGE>
                                    PART III


ITEM 10. EXECUTIVE COMPENSATION
         ----------------------

     (a), (b), (c), (d), (e), (f), (g), and (h)

     The Partnership has no officers or directors.  However,  in accordance with
     the Partnership Agreement, and as disclosed in the public offering, various
     types of  compensation  and fees were paid or are  payable  to the  General
     Partner and its affiliates.  Additional  information required by Item 10 is
     incorporated  herein  by  reference  to Note 9 of the  notes  to  financial
     statements contained in Part III.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         ---------------------------------------------------
           MANAGEMENT
           ----------

     (a)  Security ownership of certain beneficial owners.

          The following  table sets forth  certain  information  concerning  any
          person  (including any "group") who is known to the  Partnership to be
          the  beneficial  owner of more than five  percent  of the  issued  and
          outstanding BACs at March 8, 2002.

           Name and Address                 Amount and Nature       % of total
          of Beneficial Owner            of Beneficial Ownership    BACs issued
          -------------------            -----------------------    -----------

          Equity Resources Group,
            Incorporated, et. al.              51,293 BACs               5.9%
            14 Story Street
            Cambridge, MA 02138

     (b)  Security ownership of management.

          The following table sets forth certain information concerning all BACs
          beneficially  owned,  as of March 8, 2002, by each director and by all
          directors and officers as a group of the managing  general  partner of
          the Partnership's General Partner.

               Name of                      Amount and Nature       % of total
           Beneficial Owner              of Beneficial Ownership    BACs issued
           ----------------              -----------------------    -----------

           William B. Dockser                      None                   0%
           H. William Willoughby                   None                   0%
           All Directors and Officers
             as a Group (3 persons)                None                   0%

     (c)  Changes in control.

          There exists no arrangement known to the Partnership, the operation of
          which may, at a subsequent date,  result in a change in control of the
          Partnership. There is a provision in the Limited Partnership Agreement
          which  allows,  under  certain  circumstances,  the  ability to change
          control.


                                      III-2

<PAGE>
                                    PART III


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------

     (a) and (b)

          Transactions with management and others.

          The  Partnership  has no  directors  or  officers.  In  addition,  the
          Partnership  has  had no  transactions  with  individual  officers  or
          directors of the managing  general  partner of the General  Partner of
          the  Partnership  other than any indirect  interest  such officers and
          directors  may have in the amounts paid to the General  Partner or its
          affiliates by virtue of either their  interest in the General  Partner
          or  their  stock  ownership  in CRI.  Item 10 of  this  report,  which
          contains  a  discussion  of the fees and  other  compensation  paid or
          accrued by the  Partnership to the General  Partner or its affiliates,
          is incorporated herein by reference.  Note 9 of the notes to financial
          statements,  which contains  disclosure of related party transactions,
          is also incorporated herein by reference.

     (c)  Certain business relationships.

          The  Partnership's  response to Item 12(a) is  incorporated  herein by
          reference.  In addition,  the Partnership has no business relationship
          with  entities of which the  managing  general  partner of the General
          Partner of the  Partnership  is an officer,  director or equity  owner
          other than as set forth in the Partnership's response to Item 12(a).

     (d)  Transactions with promoters.

          Not applicable.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
         --------------------------------

     (a)  Index of  Exhibits  (Listed  according  to the number  assigned in the
          table in Item 601 of Regulation S-B.)

          Exhibit No. 1 - Underwriting Agreement

          a.   Forms of Sales Agency Agreement, incorporated by reference to the
               Registration Statement on Form S-1 filed on December 24, 1986.
          b.   Forms of Selected Dealer Agreements, incorporated by reference to
               the  Registration  Statement  on Form S-1 filed on  December  24,
               1986.

          Exhibit No. 3 - Articles of Incorporation and Bylaws

          a.   Certificate of Limited Partnership dated as of September 23, 1986
               of CRI Hotel  Income  Partners,  L.P.  (formerly  named CRI Hotel
               Income Fund, L.P.), incorporated by reference to the Registration
               Statement on Form S-1 filed on December 24, 1986.

               1.   Amendment dated as of March 12, 1987.
               2.   Amendment dated as of April 17, 1987.

                                      III-3

<PAGE>
                                    PART III


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K - Continued
          --------------------------------

          Exhibit No. 10 - Material Contracts

          a.   Sale/Purchase  Agreement,  dated as of October  9,  1986,  by and
               between Days Inns of America,  Inc. (DIA), Days Inns Corp. (DID),
               Days Inns Management  Company,  Inc. (DIM.), and CRI Hotel Income
               Fund,  L.P.,  and  six  modifications  thereto,  incorporated  by
               reference  to the  Registration  Statement  on Form S-1  filed on
               December 24, 1986.
          b.   Form of  Management  Agreement  by and between DIM. and CRI Hotel
               Income Fund, L.P.,  incorporated by reference to the Registration
               Statement on Form S-1 filed on December 24, 1986.
          c.   Form  of  Beneficial   Assignee   Certificate,   incorporated  by
               reference  to the  Registration  Statement  on Form S-1  filed on
               December 24, 1986.
          d.   Forms of Amendment to Hotel  Management  Agreement by and between
               CRI Hotel Income  Partners,  L.P. and Buckhead  Hotel  Management
               Company, Inc. incorporated by reference to the 1994 Annual Report
               on Form 10-K filed on March 15, 1995.

     (b)  Reports on Form 8-K

     No reports on Form 8-K were filed  during the quarter  ended  December  31,
2001.



                                      III-4

<PAGE>
                                   SIGNATURES

     In accordance  with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                      CRI HOTEL INCOME PARTNERS, L.P.
                      ----------------------------------------------------------
                      (Registrant)

                      by:  CRICO Hotel Associates I, L.P.
                           -----------------------------------------------------
                           General Partner

                           by:  C.R.I., Inc.
                                ------------------------------------------------
                                its General Partner


March 8, 2002                   by:  /s/ William B. Dockser
-------------                        -------------------------------------------
DATE                                 William B. Dockser,
                                       Director, Chairman of the Board,
                                       and Treasurer
                                       (Principal Executive Officer)


     In  accordance  with the Exchange Act, this report has been signed below by
the following  persons on behalf of the  registrant and in the capacities and on
the dates indicated.


March 8, 2002                   by:  /s/ H. William Willoughby
-------------                        -------------------------------------------
DATE                                 H. William Willoughby,
                                       Director, President,
                                       and Secretary




March 8, 2002                   by:  /s/ Michael J. Tuszka
-------------                        -------------------------------------------
DATE                                 Michael J. Tuszka
                                       Vice President
                                       and Chief Accounting Officer
                                       (Principal Financial Officer
                                       and Principal Accounting Officer)


                                      III-5

<PAGE>



Report of Independent Certified Public Accountants


To the Partners
CRI Hotel Income Partners, L.P.

We have audited the  accompanying  balance sheets of CRI Hotel Income  Partners,
L.P. (a Delaware limited  partnership) as of December 31, 2001 and 2000, and the
related  statements of income,  changes in partners'  (deficit) capital and cash
flows  for  the  years  then  ended.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of CRI Hotel Income Partners, L.P.
as of December 31, 2001 and 2000, and the results of its operations,  changes in
partners'  (deficit)  capital,  and its cash flows for the years then ended,  in
conformity with accounting principles generally accepted in the United States of
America.


                                                   Grant Thornton LLP

Vienna, Virginia
February 25, 2002

                                      III-6

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                                 BALANCE SHEETS


                                     ASSETS

<TABLE>
<CAPTION>
                                                                                                  December 31,
                                                                                          -----------------------------
                                                                                             2001              2000
                                                                                          -----------      ------------
<S>                                                                                       <C>              <C>
Property and equipment - at cost:
  Land .................................................................................   $  1,574,490    $  1,574,490
  Buildings and site improvements ......................................................     13,840,515      13,937,210
  Furniture, fixtures and equipment ....................................................      2,105,067       2,041,320
  Leasehold improvements ...............................................................      1,422,865       2,039,881
                                                                                           ------------    ------------

                                                                                             18,942,937      19,592,901
  Less: accumulated depreciation and amortization ......................................     (7,794,067)     (7,872,375)
                                                                                           ------------    ------------

                                                                                             11,148,870      11,720,526

Hotel operating cash ...................................................................        224,656         176,202
Cash and cash equivalents ..............................................................        177,278         150,687
Working capital reserve ................................................................        192,910           8,456
Capital improvements, real estate tax and insurance reserves held by servicer ..........        180,368         222,608
Receivables and other assets ...........................................................        458,953         457,830
Acquisition fees, principally paid to related parties,
  net of accumulated amortization of $473,947 and $439,943, respectively ...............        546,157         580,161
Property purchase costs,
  net of accumulated amortization of $84,333 and $78,257, respectively .................         97,933         104,009
                                                                                           ------------    ------------

    Total assets .......................................................................   $ 13,027,125    $ 13,420,479
                                                                                           ============    ============


                   LIABILITIES AND PARTNERS' (DEFICIT) CAPITAL


Current liabilities:
  Accounts payable and accrued expenses ................................................   $    465,992    $    412,299
  Distributions payable ................................................................        177,278         150,687
  Hotel trade payables .................................................................        176,272         234,636
  Short-term portion of mortgage payable ...............................................        152,940         141,461
                                                                                           ------------    ------------

Total current liabilities ..............................................................        972,482         939,083
                                                                                           ------------    ------------

Long term debt:
  Mortgage payable .....................................................................      8,243,358       8,396,298
                                                                                           ------------    ------------

    Total liabilities ..................................................................      9,215,840       9,335,381
                                                                                           ------------    ------------

Commitments and contingencies

Partners' (deficit) capital:
  General Partner ......................................................................       (312,558)       (307,081)
  Beneficial Assignee Certificates (BACs) Series A;
    868,662 BACs issued and outstanding ................................................      4,123,843       4,392,179
                                                                                           ------------    ------------

    Total partners' capital ............................................................      3,811,285       4,085,098
                                                                                           ------------    ------------

    Total liabilities and partners' capital ............................................   $ 13,027,125    $ 13,420,479
                                                                                           ============    ============
</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-7

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                              STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                           For the years ended
                                                               December 31,
                                                        --------------------------
                                                           2001           2000
                                                        -----------    -----------
<S>                                                     <C>            <C>
Revenue:
  Rooms .............................................   $ 9,090,937    $ 9,057,550
  Telephone .........................................       162,106        224,765
  Rental and other ..................................       325,472        338,575
  Food and beverage .................................        55,765         71,032
                                                        -----------    -----------

                                                          9,634,280      9,691,922
                                                        -----------    -----------

Departmental expenses:
  Rooms .............................................    (2,613,732)    (2,696,668)
  Telephone .........................................      (110,468)      (107,490)
  Rental and other ..................................      (131,044)      (142,761)
  Food and beverage .................................       (52,973)       (60,762)
                                                        -----------    -----------

                                                         (2,908,217)    (3,007,681)
                                                        -----------    -----------

Gross operating income ..............................     6,726,063      6,684,241
                                                        -----------    -----------


Unallocated operating income (expenses):
  Interest and other income .........................       153,043        113,526
  General and administrative ........................    (1,041,221)    (1,094,517)
  Building lease ....................................      (601,650)      (594,579)
  Marketing .........................................      (925,449)      (916,661)
  Depreciation and amortization .....................    (1,261,812)    (1,015,376)
  Energy ............................................      (529,273)      (510,827)
  Property taxes ....................................      (567,087)      (563,106)
  Property operations and maintenance ...............      (574,366)      (620,092)
  Management fees ...................................      (338,252)      (340,558)
  Base asset management fee, paid to related parties        (93,750)       (93,750)
  Professional fees .................................      (126,375)      (121,589)
  Loss on disposal of fixed assets ..................       (76,000)       (90,500)
                                                        -----------    -----------

                                                         (5,982,192)    (5,848,029)
                                                        -----------    -----------

Operating income ....................................       743,871        836,212


Other expense:
  Interest expense ..................................      (663,128)      (675,578)
                                                        -----------    -----------

Net income ..........................................   $    80,743    $   160,634
                                                        ===========    ===========


Net income allocated to General Partner (2%) ........   $     1,615    $     3,213
                                                        ===========    ===========


Net income allocated to BAC holders (98%) ...........   $    79,128    $   157,421
                                                        ===========    ===========


Net income per BAC, based on 868,662 BACs outstanding   $      0.09    $      0.18
                                                        ===========    ===========

</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-8

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

              STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL


<TABLE>
<CAPTION>
                                                                                Beneficial
                                                                                 Assignee
                                                             General           Certificate
                                                             Partner             Holders            Total
                                                            ----------         ------------       ----------
<S>                                                         <C>                <C>                <C>
Partners' (deficit) capital, January 1, 2000                $(301,252)         $4,677,777         $4,376,525

  Net income                                                    3,213             157,421            160,634

  Distributions of $0.51 per BAC                               (9,042)           (443,019)          (452,061)
                                                            ---------          ----------         ----------

Partners' (deficit) capital, December 31, 2000               (307,081)          4,392,179          4,085,098

  Net income                                                    1,615              79,128             80,743

  Distributions of $0.40 per BAC                               (7,092)           (347,464)          (354,556)
                                                            ---------          ----------         ----------

Partners' (deficit) capital, December 31, 2001              $(312,558)         $4,123,843         $3,811,285
                                                            =========          ==========         ==========
</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                      III-9

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      For the years ended
                                                                                          December 31,
                                                                                   --------------------------
                                                                                      2001            2000
                                                                                   -----------    -----------
<S>                                                                                <C>            <C>
Cash flows from operating activities:
  Net income ...................................................................   $    80,743    $   160,634

  Adjustments  to  reconcile  net  income  to net  cash  provided  by  operating
    activities:
    Depreciation and amortization ..............................................     1,261,812      1,015,376
    Loss on disposal of fixed assets ...........................................        76,000         90,500

    Changes in assets and liabilities:
      (Increase) decrease in receivables and other assets, net .................       (17,412)        82,655
      Increase (decrease) in accounts payable and accrued expenses .............        53,693       (109,022)
      Decrease in hotel trade payables .........................................       (58,364)       (60,408)
                                                                                   -----------    -----------

        Net cash provided by operating activities ..............................     1,396,472      1,179,735
                                                                                   -----------    -----------


Cash flows from investing activities:
  Net additions to property and equipment ......................................      (709,787)      (858,136)
  Net (deposits to) withdrawals from working capital reserve ...................      (184,454)       163,925
  Net withdrawals from capital improvements, real estate tax and
    insurance reserves held by servicer ........................................        42,240         41,324
                                                                                   -----------    -----------

        Net cash used in investing activities ..................................      (852,001)      (652,887)
                                                                                   -----------    -----------


Cash flows from financing activities:
  Distributions paid to BAC holders and General Partner ........................      (327,965)      (301,374)
  Payment of principal on mortgage payable .....................................      (141,461)      (129,011)
                                                                                   -----------    -----------

        Net cash used in financing activities ..................................      (469,426)      (430,385)
                                                                                   -----------    -----------


Net increase in hotel operating cash and cash and cash equivalents .............        75,045         96,463

Hotel operating cash and cash and cash equivalents, beginning of year ..........       326,889        230,426
                                                                                   -----------    -----------


Hotel operating cash and cash and cash equivalents, end of year ................   $   401,934    $   326,889
                                                                                   ===========    ===========




Supplemental disclosure of cash flow information:
  Cash paid during the year for interest .......................................   $   663,128    $   675,578
                                                                                   ===========    ===========
</TABLE>

                   The accompanying notes are an integral part
                         of these financial statements.

                                     III-10

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a.   Organization and offering
          -------------------------

          CRI  Hotel  Income  Partners,  L.P.  (the  Partnership)  is a  limited
     partnership  which was formed under the Delaware  Revised  Uniform  Limited
     Partnership  Act as of September 23, 1986 and will continue  until December
     31, 2016,  unless  dissolved  earlier in  accordance  with the  Partnership
     Agreement.  The  Partnership  was formed for the  purpose of  investing  in
     hotels that were acquired from Days Inns of America,  Inc. (Days Inns). The
     Partnership's  primary  objectives  continue  to be cash  flow  growth  and
     capital  appreciation.  However,  the  attainment  of these  objectives  is
     principally dependent on the hotels' operations. The hotels are operated by
     Bryanston Group d/b/a Buckhead Hotel Management Company,  Inc.  (Buckhead),
     formerly known as Days Inns Management Company,  Inc., under the nationally
     recognized franchise name of Days Inns.

          The General  Partner of the  Partnership is CRICO Hotel  Associates I,
     L.P.  (CRICO  Associates),  a Delaware  limited  partnership,  the  general
     partner of which is C.R.I., Inc. (CRI), a Delaware corporation. The General
     Partner  has  authority  in  the  overall  management  and  control  of the
     Partnership. The Assignor Limited Partner of the Partnership is CRICO Hotel
     Fund, Inc. (CRICO Hotel Fund).

          Cumulative  offering costs in the amount of $2,580,132,  consisting of
     legal and filing fees and certain travel, communication and other expenses,
     were recorded as a reduction of partners' capital when incurred and are not
     amortized for financial statement or income tax purposes.

          The Registration  Statement of the Partnership was declared  effective
     by the  Securities and Exchange  Commission  (SEC) on April 17, 1987, and a
     prospectus of the same date was printed. The Partnership registered a total
     of 6,000,000 Beneficial Assignee  Certificates (BACs), at $25 per BAC, with
     the SEC. BACs represent beneficial assignments of limited partner interests
     which are held by CRICO Hotel Fund. BACs were to be offered in series, with
     Series A having a minimum of 196,000 BACs, or $4,900,000,  and a maximum of
     2,344,000  BACs, or $58,600,000.  The  Partnership  terminated the Series A
     offering  on March  31,  1988  with  868,662  BACs,  or gross  proceeds  of
     $21,716,550, and does not intend to offer another series.

          In  addition  to  the  capital  provided  by the  sale  of  BACs,  the
     Partnership issued Zero Coupon Notes (the Notes) to finance its acquisition
     of the hotels.  The Partnership's  original  prospectus  indicated that the
     hotels would need to be sold or the debt would need to be refinanced at the
     time the Notes matured.  The prospectus also indicated that the Partnership
     intended to sell the hotels (after a period of time not likely to be longer
     than twelve years after the date of acquisition) if financial conditions in
     the future made such sales  desirable.  During  1997,  the General  Partner
     solicited and reviewed offers for both sale and  refinancing  opportunities
     for the hotels.  The  solicitation,  however,  did not result in a purchase
     offer which would have provided an adequate return to the BAC holders. As a
     result,  the  General  Partner  chose to  refinance  the  loans on the four
     hotels. Proceeds of the refinancing were adequate to pay the maturing Notes
     and to set aside reserves for capital  improvements,  which may enhance the
     potential for a higher sale price in the future. The General Partner is not
     currently soliciting sale offers.

                                     III-11

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     b.   Method of Accounting
          --------------------

          The financial  statements of the Partnership have been prepared on the
     accrual  basis of  accounting  in  conformity  with  accounting  principles
     generally accepted in the United States of America.

     c.   Depreciation and amortization
          -----------------------------

          Depreciation  is based on the  estimated  useful lives of  depreciable
     assets using the straight-line  method.  During the fourth quarter of 2001,
     the General  Partner  changed the estimated  depreciable  lives for certain
     hotel  furniture,  fixtures and equipment;  the impact of the change was to
     increase 2001 depreciation expense by $160,542. The estimated lives used in
     determining depreciation follow.

                   Type of asset                               Estimated life
                   -------------                               --------------

                   Building and site improvements              10-30 years
                   Furniture, fixtures and equipment           7 years
                   Leasehold improvements                      7-10 years

          Property  purchase costs and acquisition fees are being amortized over
     a thirty-year period using the straight-line method.

     d.   Hotel operating cash; cash and cash equivalents
          -----------------------------------------------

          Hotel operating cash and cash and cash equivalents consist of all time
     and demand deposits and repurchase  agreements with original  maturities of
     three  months or less  which  have not been  deemed  as a  working  capital
     reserve by the General  Partner.  Hotel  operating  cash  represents  funds
     maintained at the hotels and by the hotels' manager,  Buckhead,  while cash
     and cash equivalents  represents  funds maintained at the Partnership.  The
     Partnership  has  determined  that the  carrying  amounts  for these  items
     approximate fair value.

     e.   Working capital reserve
          -----------------------

          The working capital reserve  represents all cash and cash equivalents,
     as defined above,  maintained as working capital for the  Partnership.  The
     General  Partner  has  determined  that  all  cash  and  cash   equivalents
     maintained at the Partnership which are not currently  distributable to the
     BAC  holders and General  Partner of the  Partnership  shall be deemed as a
     working  capital  reserve.  The working capital reserve may be increased or
     reduced by the General Partner as it deems appropriate.

     f.   Income taxes
          ------------

          For federal and state income tax purposes, each partner reports on his
     or her  personal  income tax  return his or her share of the  Partnership's
     income or loss as determined  for tax purposes.  Accordingly,  no provision
     has been made for income taxes in these financial statements.

                                     III-12

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     g.   Use of estimates
          ----------------

          In  preparing  financial  statements  in  conformity  with  accounting
     principles  generally  accepted  in  the  United  States  of  America,  the
     Partnership is required to make estimates and  assumptions  that affect the
     reported amounts of assets and liabilities and the disclosure of contingent
     assets and  liabilities  at the date of the  financial  statements,  and of
     revenues and expenses  during the reporting  periods.  Actual results could
     differ from those estimates.

     h.   Fair value of financial instruments
          -----------------------------------

          In accordance  with  Statement of Financial  Accounting  Standards No.
     107,   "Disclosure   About  Fair  Value  of  Financial   Instruments,"  the
     Partnership  has disclosed  fair value  information  about those  financial
     instruments  for which it is  practicable  to estimate  that  value.  Where
     applicable,  such information has been disclosed  elsewhere in the notes to
     the financial statements.

     i.   Long-lived assets
          -----------------

          The  Partnership  reviews  long-lived  assets for impairment  whenever
     events or changes in circumstances  indicate that the carrying amount of an
     asset  may  not be  fully  recoverable.  Recoverability  is  measured  by a
     comparison  of the  carrying  amount  of an asset to the  estimated  future
     undescended  net cash flows  expected to be generated  by the asset.  If an
     asset were  determined to be impaired,  its basis would be adjusted to fair
     value through the recognition of an impairment loss.

     j.   Single operating segment
          ------------------------

          The Partnership  and the chief  operating  decision maker consider the
     hotels' operations as a single homogeneous  business activity as it relates
     to achieving their objectives of cash flow growth and capital appreciation.
     The chief operating  decision maker reviews cash flow and operating results
     in the  aggregate  in  order to  determine  the  appropriate  level of cash
     available  for   distribution   to  the   investors  in  the   Partnership.
     Accordingly,  the  Partnership  considers  itself  to  operate  in a single
     reportable  segment in accordance  with  Statement of Financial  Accounting
     Standards No. 131.

     k.   Risk and uncertainties
          ----------------------

          On September 11, 2001,  terrorists launched attacks on the World Trade
     Center in New York City and the  Pentagon in  Washington,  D.C. The attacks
     had an  immediate  and  significant  adverse  effect on the  United  States
     economy,  particularly on the travel and hospitality industries. The hotels
     in which the  Partnership is invested have been  adversely  affected in the
     aftermath of the September 11th terrorist attacks.  Since the attacks, some
     of the hotels have experienced significant short-term declines in occupancy
     and revenue compared to the prior year. The Partnership is currently unable
     to estimate the impact that the  September  11th  terrorist  attacks or any
     future  terrorist  attacks or other  developments  in the war on  terrorism
     could have on its operations, liquidity, or capital resources.

                                     III-13

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     l.   Reclassifications
          -----------------

          Certain   amounts  in  the  2000   financial   statements   have  been
     reclassified to conform to the 2001 presentation.

     m.   New accounting pronouncement
          ----------------------------

          In  June  2001,  the  Financial   Accounting  Standards  Board  issued
     Statement of Financial Accounting Standards No. 142 ("SFAS No. 142" or "the
     Statement"),  "Goodwill  and Other  Intangible  Assets,"  which  supercedes
     Accounting  Principles Board Opinion No. 17, "Intangible  Assets." SFAS No.
     142   eliminates  the  current   requirement   to  amortize   goodwill  and
     indefinite-lived   intangible   assets,   addresses  the   amortization  of
     intangible assets with a defined life, and addresses the impairment testing
     and recognition for goodwill and intangible assets. SFAS No. 142 will apply
     to goodwill  and  intangible  assets  arising from  transactions  completed
     before and after the Statement's  effective date. SFAS No. 142 is effective
     for fiscal  year 2002,  however,  earlier  application  is  permitted.  The
     General Partner  believes that the adoption of SFAS No. 142 will not have a
     material  impact on the financial  position or the results of operations of
     the Partnership.


2.   HOTELS AND LEASEHOLD INTEREST OWNED BY THE PARTNERSHIP

     The  number  of BACs  sold,  along  with  debt  instruments  issued  by the
Partnership,  as discussed below, generated sufficient proceeds to purchase five
hotels and one  leasehold  interest.  As of December 31, 2001,  the  Partnership
remained invested in four hotels and one leasehold interest, as follows.



            Hotels                  Date of purchase         Amount of purchase
     ----------------------         ----------------         ------------------

     Clearwater Days Inn                 4/01/88                 $3,750,000
     Minneapolis Days Inn               11/01/87                 $4,800,000
     Plymouth Days Inn                  12/30/87                 $4,000,000
     Roseville Days Inn                  3/01/88                 $4,200,000

       Leasehold interest           Date of purchase         Amount of purchase
     ----------------------         ----------------         ------------------

     Scottsdale Days Inn (A)             7/01/88                 $2,000,000

     (A)  Included in the  purchase of the  Scottsdale  leasehold  interest  was
          $618,000 allocated to furniture, fixtures and equipment.


3.   MORTGAGE PAYABLE

     On December 19, 1997, the Partnership refinanced with Citicorp Real Estate,
Inc. (Citicorp) the Zero Coupon Notes which were originally issued in connection
with the  Partnership's  acquisition  of the  hotels.  The  current  loan  bears
interest  at the rate of 7.72% per annum and  matures  January 1, 2008.  On that
date, a balloon  payment in the amount of $7,273,441  will be due. In accordance
with the  terms of the  current  loan,  the  Partnership  began  paying  monthly
installments of principal and interest in the amount of $67,049 on the first day
of each month  beginning  February 1998. If any such monthly  installment is not
paid when due, the entire  principal  amount  outstanding  and accrued  interest
thereon  shall at once  become due and  payable,  at the  option of the  holder.
Subject to prepayment terms, as discussed below, the current

                                     III-14

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


3.   MORTGAGE PAYABLE - Continued

mortgage  loan  does  not  preclude  the  future  sale  of  the  hotels,  either
individually or as a portfolio.  Scheduled annual  principal  payments due under
the loan are as follows:

                  2002                               $  152,940
                  2003                                  165,349
                  2004                                  176,920
                  2005                                  193,122
                  2006                                  208,792
                  Thereafter                          7,499,175
                                                     ----------
                          Total                      $8,396,298
                                                     ==========

     Under the terms of the current loan,  such loan may be prepaid,  subject to
terms and  prepayment  penalties as set forth in the note.  The current loan has
been  securitized  in a "no lock"  program,  which permits the prepayment of the
current loan with a three percent  premium  during the first three years,  a two
percent  premium during the next three years,  a one percent  premium during the
next three years, and no penalty during the tenth and final year.  Additionally,
see Note 9 for further  information  concerning the acquisition and servicing of
this loan.

     The Partnership  made  installments  of principal and interest  aggregating
$804,589  during each of 2001 and 2000. The  Partnership's  balance on this loan
was $8,396,298 and $8,537,759 as of December 31, 2001 and 2000, respectively.

     The  Partnership has determined that the carrying value of the current loan
approximates fair value.


4.   CAPITAL IMPROVEMENTS, REAL ESTATE TAX AND INSURANCE
       RESERVES HELD BY SERVICER

     In addition to the monthly  loan  installments,  as  discussed  above,  the
Partnership   also  makes  monthly  payments  which  are  escrowed  for  capital
improvements  reserves (CIR) and estimated annual real estate taxes. The monthly
CIR  payment  totaling  $19,365  is held in  escrow  and may be  drawn on by the
Partnership for ongoing capital improvement expenditures and for the replacement
of furniture,  fixtures and equipment at the hotels. The monthly real estate tax
payments equal  one-twelfth of the estimated  yearly taxes and assessments to be
levied on the  hotels,  currently  estimated  as $39,961  per month for the year
2002.  The  servicer of the loan pays such taxes and  assessments  when due from
these escrows. Both the CIR and real estate tax payments are due on the same day
as the monthly principal and interest installments, commencing February 1, 1998,
until the current loan is paid in full.

     During 2001 and 2000,  the  Partnership  made escrow  deposits  aggregating
$232,374 and $232,374,  respectively,  for capital improvements and $421,397 and
$470,990,  respectively,  for estimated annual real estate taxes. As of December
30, 2001 and 2000,  the servicer  held $92,953 and  $99,854,  respectively,  for
capital  improvements  and $83,893 and $119,232,  respectively,  for real estate
taxes. Additionally,  the servicer held $3,522 for insurance reserves as of both
December 30, 2001 and 2000.

                                     III-15

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


5.   WORKING CAPITAL RESERVE; INTERCOMPANY TRANSACTIONS

     The working  capital reserve of $192,910 and $8,456 as of December 31, 2001
and 2000, respectively, represents cash and cash equivalents, as defined in Note
1.e.,  maintained as working  capital for the  Partnership.  The working capital
reserve  may  be  increased  or  reduced  by the  General  Partner  as it  deems
appropriate.

     On January 6, 2000,  the  Partnership  advanced  $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing  loan.  On February  4, 2000,  the
Scottsdale hotel repaid $70,000 of this loan. The remaining  $30,000 balance was
repaid on March 1, 2000.

     On June 28, 2000, the Partnership advanced $150,000 to the Scottsdale hotel
in the form of a  non-interest  bearing loan,  which was repaid during the first
quarter of 2001. This intercompany  balance was eliminated in the preparation of
the accompanying balance sheet at December 31, 2000.

     On September 27, 2001, the Partnership  advanced $100,000 to the Scottsdale
hotel in the form of a  non-interest  bearing  loan.  On February 27, 2002,  the
Scottsdale  hotel repaid $75,000 of this loan. The remaining  $25,000 balance is
expected to be repaid later in March 2002.  This  intercompany  balance has been
eliminated in the preparation of the accompanying  balance sheet at December 31,
2001.


6.   COMMITMENTS

     a.   Hotel operations management agreements
          --------------------------------------

          The  Partnership  entered into  management  agreements  with Bryanston
     Group  d/b/a  Buckhead  Hotel  Management   Company,   Inc.  (Buckhead)  in
     connection with operation of the hotels. The management  agreements,  which
     were extended  during 2001 to expire  between  November 2007 and July 2008,
     provide  for a base asset  management  fee of 3.5% of gross  revenues  from
     operations. The management agreements also call for a marketing fee of 1.5%
     of net room  revenues,  a  reservation  fee of 2.3% of gross  revenues from
     rental of hotel guest rooms,  and an  incentive  management  fee  generally
     equal to 25% of net cash flow  available  after payment of a preferred cash
     flow return to the Partnership equal to 11% of the aggregate purchase price
     for Series A hotels owned by the Partnership.  No incentive management fees
     were earned in 2001 or 2000.

     b.   Operating lease agreements
          --------------------------

          The Partnership  assumed an existing lease agreement from Days Inns in
     connection with the acquisition of the leasehold interest in the Scottsdale
     Days Inn. The  assumption  transfers  the rights to operate the property on
     the lease's  existing terms over the remaining life of the lease. The lease
     has been extended to expire on December 31, 2003.  The lease may be renewed
     at the option of the  lessee for an  additional  five year  period.  Annual
     lease  payments  are equal to the  greater of $140,450 or 22% of total room
     revenue and 2.5% of food and beverage  revenue.  Minimum lease  payments of
     $11,704 are payable monthly with a quarterly  analysis of the actual amount
     due. For the years ended December 31, 2001 and 2000,  annual lease payments
     were $601,650 and $594,579, respectively.

                                     III-16

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


6.   COMMITMENTS - Continued

          The  Partnership  has also entered into various  operating  leases for
     equipment  used at the hotels,  which expire  through  2004.  Minimum lease
     payments  under the  operating  leases and the  Scottsdale  facility  lease
     follow.

                          2002           $ 218,572
                          2003             218,295
                          2004              13,918
                                         ---------
                                         $ 450,785
                                         =========

          Total  rental  expense  under the leases was $697,944 and $685,965 for
     the years ended December 31, 2001 and 2000, respectively.

     c.   Scottsdale, Roseville and Minneapolis capital improvements
          ----------------------------------------------------------

          During 2000, the General  Partner  approved a $930,000  renovation and
     capital improvement project for the Scottsdale hotel, to be funded from the
     working  capital  reserve of the Partnership in the amounts of $488,000 and
     $292,000  in  2000  and  2001,   respectively,   and  from  the  Scottsdale
     replacements  reserve in the  amounts of  $90,000  and  $60,000 in 2000 and
     2001, respectively. During 2000, $481,955 was funded by the Partnership and
     $51,785  was  funded  from  the  Scottsdale  replacements  reserve  for the
     Scottsdale  renovation  project.  During 2001, $252,726 was funded from the
     Partnership's  working  capital  reserve  and  $92,050  was funded from the
     Scottsdale  replacements  reserve to complete this project,  for a total of
     $878,516, which is less than the approved amount of $930,000.

          During  2000,  the  General  Partner  approved a  $145,000  renovation
     project for the  Roseville  hotel,  to be funded  from the working  capital
     reserve of the  Partnership in the amount of $70,000 and from the Roseville
     replacements  reserve in the amount of $75,000.  During  2000,  $20,409 was
     funded  from the  Partnership's  working  capital  reserve  and $75,526 was
     funded from the Roseville  replacements  reserve for this  project.  During
     2001, $46,192 was funded from the Partnership's  working capital reserve to
     complete  this  project,  for a total of  $142,127,  which is less than the
     approved amount of $145,000.

          In April 2001, the Partnership  approved a $280,000 renovation project
     for the  Minneapolis  hotel.  The cost was to be  funded  from the  working
     capital  reserve of the  Partnership in the amount of $217,000 and from the
     Minneapolis  replacements  reserve in the amount of $63,000.  During  2001,
     $72,813  was funded  from the  Partnership's  working  capital  reserve and
     $42,917  was funded  from the  Minneapolis  replacements  reserve  for this
     project.  In September 2001, the General Partner temporarily halted further
     expenditures  on this project,  but expects to resume this project later in
     2002.


7.   GROUND LEASE AGREEMENTS

     The Partnership  leases a portion of the  Minneapolis  Days Inn property to
Vicorp  Restaurants,   Inc.  (Vicorp),  which  is  operating  a  Baker's  Square
restaurant  on the  property.  This lease  expires on  December  31,  2005,  and
provides three options to extend the lease for additional  periods of five years
each. Gross rental income pursuant to the lease agreement with Vicorp,  which is
included in interest and other income in the accompanying  statements of income,
was $59,950 and $57,923 during 2001 and 2000, respectively.

                                     III-17

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


7.   GROUND LEASE AGREEMENTS - Continued

     The  Partnership  leases an  adjacent  building on the  Roseville  Days Inn
property  to Happy  Chef  Systems,  Inc.  (Happy  Chef).  Happy  Chef,  in turn,
subleases  this space to the India  Palace,  which  operates a restaurant on the
property.  During the third  quarter  2000,  Happy Chef  exercised the third and
final option on this lease, thereby extending the term for five additional years
through September 30, 2005. Happy Chef continues to sublease this space to India
Palace.  Gross rental income  pursuant to the lease  agreement  with Happy Chef,
which is included in interest and other income in the accompanying statements of
income, was $40,594 and $38,555 for 2001 and 2000, respectively.


8.   PARTNERS' CAPITAL

     The Partnership's profits and losses and distributions are allocated 98% to
the BAC holders and 2% to the General Partner.  Upon reaching a  non-cumulative,
annual preferred cash flow return of 12%, the  Partnership's  profits and losses
and  distributions  will  be  allocated  85% to the BAC  holders  and 15% to the
General  Partner.  To date,  the annual  preferred cash flow return has not been
achieved.  Cash  available  for  distribution,  as  defined  in the  Partnership
Agreement,  is intended to be  distributed  on a quarterly  basis within 60 days
after the end of each calendar quarter.

     Distributions paid or accrued to BAC holders of record during 2001 and 2000
follow.

                                    2001                         2000
                                Distributions               Distributions to
                                 BAC holders                   BAC holders
                          ------------------------     ------------------------
     Quarter Ended           Total         Per BAC        Total         Per BAC
     -------------        -----------      -------     -----------      -------

     March 31             $        --      $    --     $        --      $    --
     June 30                  173,732         0.20         147,673         0.17
     September 30                  --           --         147,673         0.17
     December 31              173,732         0.20         147,673         0.17
                          -----------      -------     -----------      -------
         Total            $   347,464      $  0.40     $   443,019      $  0.51
                          ===========      =======     ===========      =======


9.   RELATED-PARTY TRANSACTIONS

     In accordance with the terms of the Partnership Agreement,  the Partnership
paid the  General  Partner a fee for  services  in  connection  with the review,
selection,   evaluation,   negotiation  and  acquisition  of  the  hotels.   The
Partnership  paid  $1,142,516 in  acquisition  fees. The  acquisition  fees were
capitalized  and  are  being  amortized  over a  thirty-year  period  using  the
straight-line method.

     In accordance with the terms of the Partnership Agreement,  the Partnership
reimbursed the General Partner or its affiliates for costs incurred on behalf of
the  Partnership  for real estate  appraisals  and market  studies,  engineering
studies,  legal  consultation  and  accounting  fees,  as  well  as  travel  and
communication expenses related to the acquisition of the hotels. The Partnership
paid $233,474 in such costs.  The costs were capitalized and are being amortized
over a thirty-year period using the straight-line method.

                                     III-18

<PAGE>
                         CRI HOTEL INCOME PARTNERS, L.P.

                          NOTES TO FINANCIAL STATEMENTS


9.   RELATED-PARTY TRANSACTIONS - Continued

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to reimburse the General Partner or its affiliates for their direct
expenses  in  connection  with  managing  the  Partnership.  For the years ended
December  31,  2001  and  2000,  the  Partnership   paid  $61,336  and  $48,800,
respectively,  to the General Partner or its affiliates as direct  reimbursement
of expenses incurred on behalf of the Partnership.  Such reimbursed expenses are
included in the accompanying  statements of income as general and administrative
expenses.

     In accordance with the terms of the Partnership Agreement,  the Partnership
is obligated to pay the General  Partner  and/or its  affiliates  an annual base
asset  management fee (Management  Fee),  equal to 0.50% of the weighted average
balance of the adjusted partnership  investment during the period, as defined in
the Partnership Agreement.  The Partnership paid a Management Fee of $93,750 for
each of the years ended December 31, 2001 and 2000.

     The $8.9 million loan originated and  underwritten by Citicorp (see Note 3)
was acquired by CRIIMI MAE Inc., and was included in a  securitization  by it in
June 1998. As master and special servicer for the loan pool, CRIIMI MAE Services
Limited Partnership, a CRIIMI MAE Inc. affiliate, retained a portion of the cash
flow,  and would have  retained  any  prepayment  penalties.  The  Chairman  and
President of CRIIMI MAE Inc. are the Chairman and President,  respectively,  of,
and holders of a 100% equity  interest in,  C.R.I.,  Inc.,  which is the general
partner of CRICO  Hotel  Associates  I, L.P.,  which,  in turn,  is the  General
Partner of the  Partnership.  On February 26, 2002,  CRIIMI MAE Services Limited
Partnership  sold the loan pool and the servicing  thereof to an unrelated third
party.

     C.R.I.,  Inc., the general partner of the General  Partner,  has contracted
with Capitol  Hotel Group,  Inc.  (CHG),  to perform  certain  asset  management
services  related to the  oversight  of the  operations  and  management  of the
hotels.  The  Chairman  and  President  of C.R.I.,  Inc.,  are the  Chairman and
President,  respectively,  of, and  (effective as of January 1, 2000) holders of
100% of the equity interest in, CHG.


10.  RECONCILIATION OF THE PARTNERSHIP'S FINANCIAL STATEMENT
       NET INCOME TO TAXABLE INCOME

     A reconciliation  of the  Partnership's  financial  statement net income to
taxable income follows.

                                                          For the years ended
                                                              December 31,
                                                         ----------------------
                                                           2001          2000
                                                         --------      --------

Financial statement net income                           $ 80,743      $160,634

  Depreciation of buildings and site improvements
    computed over 40 years for tax purposes, and over
    shorter lives for financial statement purposes        309,456       232,040
                                                         --------      --------
Taxable income                                           $390,199      $392,674
                                                         ========      ========





                                      # # #

                                     III-19

<PAGE>