UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                                450 Fifth Street
                             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 March 31, 1999

                           Commission File NO. 0-3858

                        INTERNATIONAL LEISURE HOSTS, LTD.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)



                Wyoming                                  86-0224163
    -------------------------------            ---------------------------------
    (State or other jurisdiction of            (IRS Employer Identification No.)
     incorporation or organization)


    3207 S. Hardy Drive, Tempe, AZ                         85282
---------------------------------------                  ----------
(Address of principal executive office)                  (Zip Code)

Issuer's telephone number, including area code (602) 829-7600

1702 East Highland Avenue, Suite 312, Phoenix, Arizona 85016 (Former address)

             Securities registered under Section 12(b) of the Act:

                                                Name of each exchange
         Title of Each Class                     on which registered
         -------------------                     -------------------

                NONE

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

                           Common Stock $.01 par value
                           ---------------------------
                                (Title of Class)
<PAGE>
Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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 there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B.  If 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. $4,218,365
                                                         ----------

As of June 8, 1999,  there were 694,577 shares of common stock  outstanding  and
the aggregate market value of the common shares (based on the average of the bid
and ask price of these  shares on the NASDAQ  over the  counter  market) of ILHL
held by non-affiliates was approximately $696,375.

                                        2
<PAGE>
                                     PART I
                                                                            Page
                                                                            ----

Item 1.     Business                                                           4

Item 2.     Properties                                                         6

Item 3.     Legal Proceedings                                                  7

Item 4.     Submission of Matters to a Vote of Security Holders                7

                                     PART II

Item 5.     Market for the Registrant's Common                                 8
            Stock and Related Security Holder Matters

Item 6.     Management's Discussion and Analysis                               9
            of Financial Condition and Results of
            Operations

Item 7.     Financial Statements and Supplemental Data                        12

Item 8.     Changes in and Disagreements with                                 23
            Accountants on Accounting and Financial
            Disclosure

                                    PART III

Item 9.     Directors and Executive Officers of the Registrant                23

Item 10.    Executive Compensation                                            24

Item 11.    Security Ownership of Certain                                     25
            Beneficial Owners and Management

Item 12.    Certain Relationships and Related Transactions                    26

                                     PART IV

Item 13.    Exhibits (including Exhibit Index),                               27
            Financial Statements, Schedules and
            Reports on Form 8-K

                                        3
<PAGE>
                                     PART I

ITEM 1. BUSINESS

         The  statements   contained  in  this  Report  regarding   management's
anticipation  of  the  Company's  facility  completion  schedules,   quality  of
facilities, fulfillment of National Park Service requirements, consumer response
to marketing  efforts,  ability to offset  inflation  and adequacy of financing,
constitute  "forward-looking"  statements  within  the  meaning  of the  Private
Securities  Litigation  Reform Act of 1995.  Management's  anticipation is based
upon assumptions  regarding  levels of competition,  acceptance of facilities by
consumers,   favorable   weather   conditions,   ability  to  complete  facility
construction,  the market in which the Company  operates,  the  stability of the
economy and stability of the regulatory  environment.  Any of these  assumptions
could  prove  inaccurate,  and  therefore  there  can be no  assurance  that the
forward-looking information will prove to be accurate.

         International  Leisure  Hosts,  Ltd. (the  "Company")  was formed under
Wyoming law as a corporation on October 18, 1962. The principal  business of the
Company is the  ownership  and  operation  of Flagg Ranch  Resort  ("Flagg"),  a
full-service  resort motel and trailer  park located on the John D.  Rockefeller
Jr. Memorial Parkway approximately four miles north of Grand Teton National Park
("Grand  Teton") and two miles  south of the  southern  entrance of  Yellowstone
National Park ("Yellowstone").

         Flagg  undertook a major  redevelopment  plan in fiscal year 1995 which
included construction of a new main lodge building, plus 50 new cabin units. The
new lodge and cabins opened for business in May 1995. The lodge,  which replaced
existing  facilities,  includes a restaurant,  lounge, gift shop, grocery store,
front desk and gasoline station. The 50 new cabin units replaced 42 rustic cabin
units,  which will be removed from the property.  During  fiscal year 1996,  the
Company began  construction  of an additional 42 new cabin units,  a maintenance
building and a laundry facility.  The 42 new cabins were substantially  complete
in December  1996.  Although  these cabins were ready for  occupancy  during the
winter, certain finish items on the outside of the cabins could not be completed
until the summer of 1997.  The 42 cabins  replaced the  Company's  54-unit motel
which was used for  visitors  through the summer of 1998 and then  converted  to
employee housing.  The new maintenance and laundry  facilities were completed by
August 31, 1997.

         During fiscal year 1999,  Flagg provided  overnight  accommodations  to
national  park  visitors  for up to 328 persons per night via its 92 cabins.  In
addition to the cabin  units,  Flagg  operates a full  service  trailer park and
campground that provides water, electrical and sewer connections for 97
recreational vehicles, plus 74 campsites without utility hookups.

         Flagg is operated as a seasonal  resort.  The two  seasons,  summer and
winter,  coincide with the opening and closing dates of the two national  parks.
The summer season,  which runs from  approximately May 15th through October 15th
of each year,  is the height of activity at Flagg.  In addition to the motel and
trailer  park/campground  accommodations,  Flagg  offers  numerous  services and
activities  for  the  guests'  enjoyment  including  Snake  River  float  trips,
horseback  riding  and a variety of scenic  hiking  trails.  The  summer  season
accounted  for 73%  respectively  of  Flagg's  fiscal  1999 and  1998  operating
revenues.

                                        4
<PAGE>
         Prior to the recently completed redevelopment of its facilities,  Flagg
was not a destination  stop in the summer,  but instead  provided basic services
for visitors to the two  national  parks.  Most of the guests  stayed one to two
nights and the majority of the patrons represented  overflow from other national
park facilities similar to those provided by Flagg. However, with the completion
of the new main lodge and cabin units, management believes that Flagg now offers
facilities equal or superior to those of other national park concessionaires. As
a result,  Flagg intends to develop a reputation  as a destination  location for
visitors in addition to catering to guests staying only one to two nights.

         The winter  season,  which  runs from  mid-December  through  mid-March
accounted  for  27%  of  Flagg's  fiscal  1999  and  1998  operating   revenues.
Yellowstone receives  approximately 150 to 400 inches of snowfall per year which
turns the park into a winter recreational destination. The National Park Service
("NPS")  grooms,  but does not plow,  the snow on the roads inside the park. The
only modes of transportation into the park are snowmobile and snowcoach.

         Management  believes  that  Flagg's  location at the south  entrance to
Yellowstone makes it a premiere  location for winter visitors.  The road is well
plowed from  Jackson,  Wyoming to the entrance to Flagg  offering easy access to
Flagg  for  visitors.  However,  visitors  cannot  proceed  past  Flagg and into
Yellowstone unless they are traveling via snowmobile or snowcoach.  Flagg is the
only vendor  licensed  by the NPS with  unguided  snowmobile  tours at the south
entrance to  Yellowstone.  In fiscal year 1999,  Flagg had a fleet of 85 Polaris
snowmobiles available to the public for rental. In addition,  Flagg offers daily
trips to Old Faithful Lodge in Yellowstone via its two 11-passenger  snowcoachs.
Cross-country skis and snowshoes are also available for rental.

         The Company receives its operating  authorization from the NPS. The NPS
Contract (the "Contract")  which became effective on January 1, 1990 will expire
on December 31,  2009.  The  Contract  requires  the Company to provide  certain
services to the public and  authorizes  other  services that may be offered each
year. It grants the NPS the right to regulate the adequacy, types and charges of
all services offered to the public. The terms and conditions of the Contract are
under the direct supervision of the Superintendent of Grand Teton National Park.
The fee  payable  to the NPS  under  the  Contract  is  subject  to  review  and
adjustment  every five years.  For fiscal 1999,  the fee was calculated at 2% of
the Company's gross receipts (as defined in the Contract).

         Flagg  faces  competition  from  hotels,   camping  areas  and  trailer
facilities in  Yellowstone  and in Grand Teton as well as from a large number of
hotels and motels in Wyoming,  Montana and Idaho offering some facilities  which
are similar to those  offered by Flagg.  In  addition,  the business of Flagg is
susceptible  to weather  conditions and  unfavorable  trends in the economy as a
whole.

         Business  could be  significantly  affected  negatively  depending upon
actions which might be taken by the NPS if cutbacks are made to their budget. If
the NPS decides to close  Yellowstone  for the winter  months,  then Flagg would
have to  discontinue  its  winter  operations.  NPS budget  cutbacks  could also
negatively  impact the length of the summer season and the number of visitors to
the parks and have a corresponding negative impact on Flagg revenues.

                                        5
<PAGE>
         On May 20, 1997, the Fund for Animals,  Biodiversity  Legal  Foundation
et.  al.  filed a lawsuit  against  the NPS  challenging  the  action of the NPS
regarding  winter  use of  Yellowstone  and  Grand  Teton  National  Parks.  The
plaintiffs  have asked the Federal  Court to stop winter  activities,  primarily
snowmobiling  and  related  snow  grooming,   until  environmental  impacts  are
documented.  A settlement agreement was reached that requires the NPS to prepare
an  environmental  impact  statement  ("EIS") over the next three years,  during
which time period the parks will continue  activities  under the existing winter
visitor-use  plan.  If the  NPS is  required  to  suspend  or  terminate  winter
activities in Yellowstone  National  Park,  Flagg Ranch would have to suspend or
discontinue its winter operations.

YEAR 2000 COMPLIANCE

         The Year 2000 Issue is the result of computer  programs  being  written
using two digits  rather  than four to define the  applicable  year.  Any of the
Company's  computer programs that have  time-sensitive  software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a  system  failure  or  miscalculations   causing   disruptions  of  operations,
including,  among other things, a temporary  inability to process  transactions,
send invoices, or engage in similar normal business activities.

         Both  the  Company's  accounting  software  as well as its  reservation
systems are already year 2000 compliant. Management has determined that the year
2000 issue  will not pose  significant  operational  problems  for its  computer
systems. As a result, all costs associated with this conversion
are being expensed as incurred.

         In addition, the Company has communicated with others with whom it does
significant  business to determine their Year 2000 Compliance  readiness and the
extent to which the Company is  vulnerable  to any third party Year 2000 issues.
However,  there can be no guarantee that the systems of other companies on which
the  Company's  systems  rely will be  timely  converted,  or that a failure  to
convert  by another  company,  or a  conversion  that is  incompatible  with the
Company's systems, would not have a material adverse effect on the Company.

ITEM 2. PROPERTIES

         The Flagg  facilities are located on approximately 70 acres in the John
D. Rockefeller Jr. Memorial Parkway. This entire tract of land which the Company
utilizes  is owned by the  Federal  Government  and its usage is governed by the
terms of the Contract.

         Proprietary rights to certain facility improvements  constructed by the
Company  (including  the new lodge and new cabin units) have been granted to the
Company  under the terms of the  Contract;  however,  the NPS may  terminate the
Contract and purchase the Company's improvements,  upon a determination that the
public interest requires Federal  Government  ownership of the improvements.  In
such  event,  the  Federal  Government  is  required  to pay a  price  for  said
improvements equal to the cost of reconstruction less depreciation.  If, however
the Contract is terminated by the Federal  Government for default by the Company
for  unsatisfactory  performance  as defined in the  Contract,  then the Federal
Government  is  required  to  pay  a  price  equal  to  the  tax  basis  of  the
improvements.  At the end of the Contract,  if the Company is not the successful
bidder on a new  contract  for the  property,  then the  Federal  Government  is
required to purchase from the Company the improvements  (including the new lodge
and new  cabin  units)  made to the  property  at a price  equal  to the cost of
reconstruction less depreciation.

                                        6
<PAGE>
         During fiscal year 1998, the Company  incurred  costs of  approximately
$216,000 to complete  construction of the 42 new cabins as well as other related
improvements.   During  fiscal  year  1999,   the  Company   incurred  costs  of
approximately  $800,000 to begin  moving its  employee  housing from its current
location to the high ground above the river.  With the  completion of the 42 new
cabin units in  December  1998,  the  Company  had a total of 146 lodging  units
consisting of 92 cabin units and a 54-unit  riverside  motel  complex  available
during the majority of fiscal year 1998. The 54-unit riverside motel,  which was
converted to employee  housing in December  1997,  was not  available  for guest
lodging  during fiscal year 1999 and the number of lodging  units  available for
rent was 92.

         Under the terms of the  Contract,  the  Company is required to move the
existing 54-unit riverside motel,  which has been converted to employee housing,
from its  current  location  to the high  ground  above the river and make other
improvements  prior to December 31, 1999.  The remaining cost is estimated to be
between  $1,200,000  and  $1,500,000  depending  on  the  extent  of  additional
improvements  required by the NPS.  If the  Company  elects to build new lodging
units to replace the converted  54-unit  riverside motel, the additional cost to
build these units is estimated to be between  $1,000,000  and  $1,200,000.  This
would  result  in a total  remaining  cost of  relocation  and new  construction
combined of between $2,200,000 and $2,700,000.

         On  a  temporary  basis,   during  the  summer  of  1997,   twenty-five
recreational  vehicle  sites and one tent site were not  available for rental to
the  public.  These  sites were  utilized  by  construction  workers  during the
construction period and by employees until the new employee recreational vehicle
sites  were  completed.  This  reduced  the  campground  facility  from 97 to 72
recreational  vehicle  sites and from 74 to 73 tent sites,  and thus  negatively
impacted campground revenues during fiscal year 1998.

ITEM 3. LEGAL PROCEEDINGS

         There are no material legal proceedings against  International  Leisure
Hosts, Ltd.

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

         None

                                        7
<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS

         International  Leisure  Hosts,  Ltd.  common stock is traded on the OTC
bulletin  board,  quoted by NASDAQ under the symbol "ILHL".  The following table
sets forth the high and low bid prices for the stock for each quarter for fiscal
years 1998 and 1999.

                                                     Bid
                                            ----------------------
         Quarter Ended                      High               Low
         -------------                      ----               ---

         June 30, 1997                      6 1/8              5 1/4
         September 30, 1997                 7                  5 1/2
         December 31, 1997                  7 1/4              6 3/8
         March 31, 1998                     6 3/4              5 3/4
         June 30, 1998                      6 1/4              5 7/8
         September 30, 1998                 5 3/4              5 1/2
         December 31, 1998                  4 3/4              4 1/4
         March 31, 1999                     5 3/4              5 1/2

         Over-the-counter market quotations reflect inter-dealer prices, without
retail markup,  markdown or commissions and may not necessarily represent actual
transactions.  As of March 31, 1999,  there were 694,577  shares of  outstanding
common stock and an estimated 900 shareholders of record.

         The level of trading  during fiscal year 1999 was  approximately  4,100
shares the first  quarter,  3,500  shares the second  quarter,  1,500 shares the
third  quarter,  and 2,700  shares the fourth  quarter  ending  March 31,  1999.
Trading  activity  with  respect to the common  stock has been  limited  and the
volume  of  transactions  should  not of  itself  be  deemed  to  constitute  an
"established  public  trading  market."  A  public  trading  market  having  the
characteristics of depth,  liquidity and orderliness depends on the existence of
market makers as well as the presence of willing  buyers and sellers,  which are
circumstances over which the Company does not have control.

         It is the policy of the  Company  not to pay  dividends  but instead to
retain earnings for use in the operation and expansion of its business.

SELECTED FINANCIAL DATA

         The  selected  financial  data for each of the five years in the period
ended March 31, 1999 have been  derived  from the  Company's  audited  financial
statements,  and should be read in conjunction with the financial statements and
related notes thereto and other financial information appearing elsewhere herein
and in Item 6. The selected financial data is not required by Form 10-KSB and is
included herein as an unnumbered item.

                                        8
<PAGE>
                           FISCAL YEAR ENDED MARCH 31,
                     (In thousands except per share amounts)


                                 1999      1998       1997       1996       1995
                                 ----      ----       ----       ----       ----

Total Revenues                 $4,218    $4,631     $4,094     $3,976     $3,781
Net Income (Loss)                 292       156       (113)       199        458
Net Income (Loss) Per Share-      .42       .23       (.16)       .29        .66
  Basic
Total Assets                    6,212     5,393      5,363      4,266      4,431
Long-Term Obligations               0         0        446          0          0
Shareholders' Equity            4,120     3,828      3,672      3,785      3,604
Book Value Per Share             5.93      5.51       5.29       5.45       5.16

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

         The  Company's  net  income was  $292,000,  $.42 per share for the year
ended March 31, 1999.  This compares to net income of $156,000,  $.23 per share,
in 1998 and a net loss of  $113,000,  ($.16) per  share,  in 1997.  The  primary
factor  contributing to the $136,000 increase in 1999 net income was a reduction
in labor and other  operating  costs  resulting  from an increase in efficiency.
Changes in the  Company's  revenues  and  expenses for the fiscal years 1999 and
1998 are summarized  below. All references to years represent fiscal years ended
March 31.

         Total  revenues for 1999 decreased by $413,000 or 9% over 1998. Of this
decrease,  $237,000 was from lodging,  $108,000 from food service,  $40,000 from
float trip revenue,  $33,000 from trail ride revenue,  $123,000 from  snowmobile
revenue,  $3,000  from  transportation  revenue  and $1,000  from  miscellaneous
revenue.  Increases  of $22,000 in RV/Tent  rental,  $55,000 in gift shop sales,
$38,000  in  grocery  store  sales,  $10,000  in  gasoline  sales and  $7,000 in
snowcoach revenue partially offset the above decreases.  The decrease in lodging
revenue is mainly  attributable  to the decrease in total number of rental units
available during the summer season from 146 in fiscal 1998 to 92 in fiscal 1999.
The  decreased  number of guests  contributed  to the decreases in food service,
trail ride and float trip  revenue.  Increases  in gift shop and  grocery  store
revenue is mainly  attributable to increased shelf space and better  merchandise
display in both areas as well as less  employee  turnover and more  attention to
the  merchandise  mix.  Increases in RV/tent rental as well as gasoline sales is
attributed to a higher number of campsites available during the summer.

                                        9
<PAGE>
         While  lodging  revenue  for the 1999  winter  season  was  essentially
unchanged  from 1998, the number of snowmobile  rentals  decreased from 4,622 in
1998 to 3,868 in 1999.  Some of the  decrease can be explained by the closure of
Yellowstone  Park for several days during the very busy  Christmas to New Year's
time period. The balance of the decrease is attributed to increased  competition
from the Jackson Hole snowmobile  rental  companies as well as a decrease in the
overall number of winter visitors due to Delta Airlines  decision to discontinue
full size jet service to Jackson Hole.

         Total revenues for 1998 increased by $538,000 or 13% over 1997. Of this
increase,  $295,000 was from lodging,  $74,000 from food  service,  $58,000 from
float trip revenue,  $25,000 from trail ride revenue,  $165,000 from  snowmobile
revenue,  $38,000 from snowcoach revenue and $2,000 from transportation revenue.
Decreases of $52,000 in gift shop sales,  $35,000 in grocery store sales, $1,000
in  interest  income,  $17,000 in gasoline  sales and  $15,000 in  miscellaneous
revenue partially offset the above increases. The increase in lodging revenue is
mainly  attributable  to the increase in total number of rental units  available
during the summer  season  from 104 in fiscal  1997 to 146 in fiscal  1998.  The
increased number of guests  contributed to the increases in food service,  trail
ride and float trip revenue. Decreases in gift shop and grocery store revenue is
mainly  attributable  to a higher than normal  employee  turnover in those areas
which  resulted  in  less  continuity  of  operations,  less  attention  to  the
merchandise mix and a resulting decrease in sales.

         The 1998 winter  season was longer  than the 1997 winter  season due to
mild weather which resulted in fewer road,  airport and park closures.  The 1998
winter season  consisted of 81 days  compared to 67 days in 1997.  The number of
winter visitors through the south entrance of Yellowstone  increased 46% in 1998
compared to 1997. As a result,  the number of snowmobile  rentals increased from
3,995 in 1997 to 4,622 in 1998.

COSTS AND EXPENSES

         The ratio of cost of merchandise  sold to sales of merchandise  was 60%
in 1999, 59% in 1998, and 61% in 1997. Ending merchandise  inventories increased
from approximately  $50,000 at March 31, 1998 to approximately  $92,000 at March
31, 1999 primarily due to the prior year inventory level being abnormally low.

         Operating  expenses decreased by $545,000 or 22% in 1999 as compared to
1998. In addition,  the ratio of operating costs to operating revenues decreased
to 47% in 1999 from 55% in 1998.  The major  decreases  consisted of $363,000 in
labor, $20,000 in utilities,  $6,000 in office supplies,  $82,000 in repairs and
maintenance,  $26,000 in equipment rental, $107,000 in outside services, $12,000
in commissions, $9,000 in franchise fee, and $24,000 in miscellaneous. The above
decreases  were partially  offset by increases of $8,000 in operating  supplies,
$7,000  in  snowmobile  parts  and  gas,  $31,000  in  advertising,  $22,000  in
telephone,  $6,000 in travel,  $3,000 in printing,  $9,000 in credit card costs,
$3,000 in postage  and  freight,  $14,000 in  licenses  and fees,  and $2,000 in
insurance.  The  labor  cost  decrease  was  primarily  due  to  elimination  of
guaranteed  bonus/severance  agreements  as well as an overall  reduction in the
size of the labor  force.  Outside  services  decreased  due to the  trail  ride
operation  being  handled in house as well as an overall  reduction in float and
trail ride revenue.

                                       10
<PAGE>
         Operating  expenses  increased by $189,000 or 8% in 1998 as compared to
1997. In addition,  the ratio of operating costs to operating revenues decreased
to 55% in 1998 from 57% in 1997.  The major  increases  consisted of $257,000 in
labor, $69,000 in outside services,  and $20,000 in credit card/collection fees.
These  increases were partially  offset in part by the elimination of snowmobile
rental  expense of  $169,000  (which was  partially  offset by  depreciation  of
snowmobiles  of $31,000 and loss on sale of  snowmobiles  of $94,000)  and minor
decreases  in other  expenses.  The labor  increase  was  mainly  the  result of
increased  managerial  costs due to  guaranteed  bonus  payments  and  severance
agreements. The increase in outside services costs were due to increased revenue
in both the float and horse activities which resulted in higher payments due per
lease agreements with the operators. The higher credit card/collection fees were
a result of higher  gross  revenues  and  corresponding  increases in the use of
credit  cards.  Snowmobile  rental  expense  was  eliminated  this year with the
Company's decision to purchase the snowmobiles.

         General and administrative expenses decreased by $48,000 or 18% in 1999
as compared to 1998.  The decrease  consisted  primarily of reductions in travel
and transportation of $24,000,  legal and accounting of $26,000,  and management
fees of $4,000.  These  reductions were partially  offset by increases in office
supplies of $6,000.

         General and  administrative  expenses  decreased  by $230,000 or 47% in
1998 as compared to 1997.  The decrease  consisted  primarily of  reductions  in
telephone  expense of $10,000 and management fees of $253,000 which was a result
of a change in  management  philosophy  and  structure.  These  reductions  were
partially offset by increases in professional fees of $33,000.

         During  1998,  the  Company  had a loss on asset  disposals  of $94,000
partly resulting from the sale to a related party of the snowmobiles used in the
winter operation.  Previously the Company had rented  snowmobiles from a related
party and had included the rental cost in operating expenses.

INFLATION

         The Company expects that it will be able to offset  increased costs and
expenses,  principally labor,  caused by inflation,  by increasing prices on its
services with minimal effect on operations.

LIQUIDITY AND CAPITAL RESOURCES

         During  fiscal  1999,  the  Company  incurred  costs  of  approximately
$800,000 related to certain construction  projects. As a result, working capital
decreased to a negative $1,481,000 at March 31, 1999 from a negative $945,000 at
March 31, 1998. The Company may incur additional costs of between $1,200,000 and
$1,500,000  prior to December  31, 1999 to complete the  relocation  of employee
housing units as required under the NPS Contract.

         The Company intends to fund these  improvements  through  existing cash
funds and cash generated  from  operations.  Cash generated from  operations was
$964,000, $432,000, and $430,000 for the fiscal years ended 1999, 1998 and 1997,
respectively.  The  construction  funds will have to be  obtained  from  outside
sources to the extent they exceed cash  generated from  operations.  There is no
guarantee that the Company will be able to procure financing on favorable terms.

                                       11
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

INDEPENDENT AUDITORS' REPORT

Board of Directors and Shareholders
International Leisure Hosts, Ltd.
Tempe, Arizona

We have audited the  accompanying  consolidated  balance sheets of International
Leisure  Hosts,  Ltd. and  subsidiary  (the  "Company") as of March 31, 1999 and
1998,  and the related  consolidated  statements  of  operations,  shareholders'
equity, and cash flows for each of the three years in the period ended March 31,
1999.  These  financial  statements  are  the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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,  such consolidated  financial  statements present fairly, in all
material  respects,  the financial position of the Company at March 31, 1999 and
1998, and the results of its operations and its cash flows for each of the three
years in the period ended March 31, 1999 in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP
Phoenix, Arizona

June 8, 1999

                                       12
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999 AND 1998
--------------------------------------------------------------------------------

                                                        1999            1998
                                                    -----------     -----------
ASSETS (Note 5)
CURRENT ASSETS:
 Cash & cash equivalents                            $   296,291     $   212,593
 Accounts receivable                                      9,854          23,300
 Accounts receivable from related party (Note 4)                         82,800
 Income tax refund receivable                                            23,471
 Merchandise inventories                                 92,481          50,394
 Prepaid expenses and other                              18,936          10,491
 Deferred income taxes (Note 2)                                          19,603
                                                    -----------     -----------
     Total current assets                               417,562         422,652
                                                    -----------     -----------
PROPERTY AND EQUIPMENT (Notes 3 and 5):
 Buildings and improvements                           5,421,138       5,017,059
 Equipment                                            1,815,620       1,421,234
 Leasehold improvements                                 325,600         325,600
 Construction in progress                               446,206          48,145
                                                    -----------     -----------
     Total property and equipment                     8,008,564       6,812,038
 Less accumulated depreciation and amortization       2,215,754       1,845,325
                                                    -----------     -----------
     Property and equipment - net                     5,792,810       4,966,713
                                                    -----------     -----------
DEPOSITS                                                  1,500           3,402
                                                    -----------     -----------
TOTAL                                               $ 6,211,872     $ 5,392,767
                                                    ===========     ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
 Note payable under line of credit (Note 5)         $ 1,460,000     $ 1,105,000
  Accounts payable:
    Trade                                               110,240          70,570
    Related party (Note 4)                                               17,929
  Income taxes payable                                  117,684
  Accrued liabilities                                    44,257          61,323
  Advance deposits                                      166,842         113,093
                                                    -----------     -----------
      Total current liabilities                       1,899,023       1,367,915
DEFERRED INCOME TAXES (Note 2)                          193,076         196,589
                                                    -----------     -----------
      Total liabilities                               2,092,099       1,564,504
                                                    -----------     -----------
SHAREHOLDERS' EQUITY:
 Preferred stock, $5 par value - authorized
  100,000 shares: none issued
 Common stock,
  $.01 par value - authorized 2,000,000 shares:
  718,373 shares issued                                   7,184           7,184
 Additional paid-in capital                             656,426         656,426
 Retained earnings                                    3,534,075       3,242,565
                                                    -----------     -----------
                                                      4,197,685       3,906,175
 Less common stock in Treasury - at cost,
  23,796 shares                                         (77,912)        (77,912)
                                                    -----------     -----------
     Total shareholders' equity - net                 4,119,773       3,828,263
                                                    -----------     -----------
TOTAL                                               $ 6,211,872     $ 5,392,767
                                                    ===========     ===========

See notes to consolidated financial statements

                                       13
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                            1999           1998           1997
                                                        -----------    -----------    -----------
<S>                                                     <C>            <C>            <C>
REVENUES:
 Sales of merchandise                                   $ 1,833,844    $ 1,821,890    $ 1,874,158
 Room, cabin and trailer space rentals                    1,578,763      1,810,328      1,515,218
 Snowmobile rentals                                         562,284        670,537        505,973
 Other rentals and income                                   240,313        324,520        194,167
 Interest                                                     3,161          3,511          4,043
                                                        -----------    -----------    -----------
    Total revenues                                        4,218,365      4,630,786      4,093,559
                                                        -----------    -----------    -----------
COSTS AND EXPENSES:
 Cost of merchandise                                      1,099,505      1,080,088      1,147,788
 Operating (Note 3)                                       1,979,078      2,523,588      2,165,001
 Operating - related party (Note 4)                                                       169,100
 General and administrative                                  56,330        100,816         78,200
 General and administrative - related party (Note 4)        155,713        159,464        412,286
 Net loss on asset disposals (Note 4)                        13,628         94,387
 Depreciation and amortization                              395,757        364,848        291,329
 Interest - related party (Notes 4 and 5)                    69,966         91,602         14,594
                                                        -----------    -----------    -----------
    Total costs and expenses                              3,769,977      4,414,793      4,278,298
                                                        -----------    -----------    -----------

INCOME (LOSS) BEFORE INCOME TAXES                           448,388        215,993       (184,739)

PROVISION (BENEFIT) FOR INCOME TAXES (Note 2)               156,878         59,538        (71,975)
                                                        -----------    -----------    -----------
NET INCOME (LOSS)                                       $   291,510    $   156,455    $  (112,764)
                                                        ===========    ===========    ===========
NET INCOME (LOSS) PER COMMON SHARE-
 BASIC  (Note 1)                                        $      0.42    $      0.23    $     (0.16)
                                                        ===========    ===========    ===========
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       14
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED MARCH 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                            ADDITIONAL
                                     COMMON STOCK            PAID-IN       RETAINED      TREASURY
                                 SHARES         AMOUNT       CAPITAL       EARNINGS       STOCK
                               ----------     ----------    ----------    ----------    ----------
<S>                            <C>            <C>           <C>           <C>           <C>
BALANCE, APRIL 1, 1996            718,373     $    7,184    $  656,426    $3,198,874    $  (77,512)
  Purchases of common stock                                                                   (400)
  Net loss                                                                  (112,764)
                               ----------     ----------    ----------    ----------    ----------

BALANCE, MARCH 31, 1997           718,373          7,184       656,426     3,086,110       (77,912)
  Net income                                                                 156,455
                               ----------     ----------    ----------    ----------    ----------

BALANCE, MARCH 31, 1998           718,373          7,184       656,426     3,242,565       (77,912)
  Net income                                                                 291,510
                               ----------     ----------    ----------    ----------    ----------

BALANCE, MARCH 31, 1999           718,373     $    7,184    $  656,426    $3,534,075    $  (77,912)
                               ==========     ==========    ==========    ==========    ==========
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       15
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1999, 1998, AND 1997
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                    1999           1998           1997
                                                                 -----------    -----------    -----------
<S>                                                              <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                              $   291,510    $   156,455    $  (112,764)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
      Depreciation and amortization                                  395,757        364,848        291,329
      Deferred income taxes                                           16,090         59,538        (60,403)
      Net loss (gain) on asset disposals                              13,628         94,387           (120)
  Changes in assets and liabilities:
      Accounts receivable                                             13,446          8,528        (26,195)
      Accounts receivable from related party                          82,800        (73,000)        (5,000)
      Income tax refund receivable                                    23,471         43,793         14,028
      Merchandise inventories                                        (42,087)        68,024         48,586
      Prepaid expenses and other                                      (8,445)         6,554         (6,024)
      Deposits                                                         1,902           (925)
      Accounts payable - trade                                        39,670        (57,457)        68,284
      Accounts payable - related party                               (17,929)        17,929
      Accounts payable - construction                                               (29,226)
      Income taxes payable                                           117,684
      Accrued liabilities                                            (17,066)       (18,024)       198,206
      Accrued liabilities to related party                                         (163,209)
      Advance deposits                                                53,749        (46,698)        19,856
                                                                 -----------    -----------    -----------
          Net cash provided by operating activities                  964,180        431,517        429,783
                                                                 -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment                         (1,301,447)      (652,117)    (1,340,235)
      Sale of marketable investment securities
      Cash and accounts payable segregated for construction of                                     (30,293)
        replacement property
      Proceeds from sale of property and equipment                    65,965        214,935          4,758
                                                                 -----------    -----------    -----------
        Net cash used in investing activities                     (1,235,482)      (437,182)    (1,365,770)
                                                                 -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Common stock purchased for treasury                                                             (400)
      Proceeds from long-term debt                                                   60,000        935,000
      Payments on long-term debt                                                   (995,000)
      Proceeds from line of credit                                   395,000      1,105,000
      Payments on line of credit                                     (40,000)
                                                                 -----------    -----------    -----------

        Net cash provided by financing activities                    355,000        170,000        934,600
                                                                 -----------    -----------    -----------
</TABLE>

                                                                     (Continued)

                                       16
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1999, 1998, AND 1997
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                                                                    1999           1998           1997
                                                                 -----------    -----------    -----------
<S>                                                              <C>            <C>            <C>
NET INCREASE (DECREASE) IN CASH AND                                   83,698        164,335         (1,387)
CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                         212,593         48,258         49,645
                                                                 -----------    -----------    -----------

CASH AND CASH EQUIVALENTS, END OF YEAR                           $   296,291    $   212,593    $    48,258
                                                                 ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION - Cash paid for interest                           $   108,985    $    96,284    $    14,594
                                                                 ===========    ===========    ===========
</TABLE>

                                                                     (Concluded)

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       17
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1999, 1998 AND 1997
--------------------------------------------------------------------------------

1.       BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

         International  Leisure  Hosts,  Ltd.  (the  "Company")  operates in one
         business segment,  the ownership and operation of Flagg Ranch Resort, a
         full-service  resort  motel and  trailer  park  located  in the John D.
         Rockefeller Jr.  Memorial  Parkway,  approximately  four miles north of
         Grand Teton National Park and two miles south of the southern  entrance
         to Yellowstone National Park.

         As of March 31, 1997, the financial  statements include the accounts of
         International  Leisure  Hosts,  Ltd.  and  Lewis  &  Clark  Lodge,  its
         wholly-owned  subsidiary.  All  intercompany  transactions and accounts
         were eliminated in consolidation.

         During  1998, a majority of the  outstanding  shares of the Company was
         purchased by an  unrelated  third party.  Subsequent  to the  purchase,
         Lewis & Clark Lodge was dissolved and its assets and  liabilities  were
         transferred to the Company at their historical cost basis.

         SIGNIFICANT ACCOUNTING POLICIES are as follows:

         a.       MERCHANDISE  INVENTORIES  are stated at the lower of aggregate
                  cost (first-in, first-out basis) or market.

         b.       PROPERTY AND  EQUIPMENT  are stated at cost.  Depreciation  is
                  computed by  straight-line  and  accelerated  methods over the
                  estimated  useful lives,  which range from 5 to 40 years,  for
                  such assets.  Leasehold  improvements  are amortized using the
                  straight-line  method over the lesser of the estimated  useful
                  life of the related asset or the term of the lease.

                  The Company  reviews  the  carrying  values of its  long-lived
                  assets and  identifiable  intangibles for possible  impairment
                  whenever events or changes in circumstances  indicate that the
                  carrying  amount  of  assets  to be held  and  used may not be
                  recoverable. For assets to be disposed of, the Company reports
                  long-lived assets and certain identifiable  intangibles at the
                  lower of carrying amount or fair value less cost to sell.

         c.       INCOME TAXES - Deferred  income  taxes have been  provided for
                  the  temporary  differences  between  financial  statement and
                  income tax reporting on certain transactions.

         d.       USE OF ESTIMATES - The preparation of financial  statements in
                  conformity  with  generally  accepted  accounting   principles
                  necessarily   requires   management  to  make   estimates  and
                  assumptions  that  affect the  reported  amounts of assets and
                  liabilities   and   disclosure   of   contingent   assets  and
                  liabilities  at the date of the financial  statements  and the
                  reported amounts of revenues and expenses during the reporting
                  period. Actual results could differ from those estimates.

                                       18

<PAGE>
         e.       NET INCOME  (LOSS) PER  COMMON  SHARE - Net income  (loss) per
                  common  share  is  computed  by  dividing  net  income  by the
                  weighted  average  number of common  shares  outstanding.  The
                  weighted  average  number of  common  shares  outstanding  was
                  694,577,  694,577, and 694,610 shares for 1999, 1998 and 1997,
                  respectively.

         f.       STATEMENTS  OF CASH FLOWS - For  purposes of the  consolidated
                  statements of cash flows, cash and cash equivalents  represent
                  cash in banks, money market funds, and certificates of deposit
                  with initial maturities of three months or less.

         g.       ESTIMATED  FAIR VALUE OF FINANCIAL  INSTRUMENTS  - The Company
                  has  estimated  the fair  value of its  financial  instruments
                  using available market data. However, considerable judgment is
                  required in interpreting  market data to develop  estimates of
                  fair  value.  The  use  of  different  market  assumptions  or
                  methodologies  may have a material  effect on the estimates of
                  fair values. The carrying values of cash,  receivables,  lines
                  of credit,  accounts payable,  accrued expenses, and long-term
                  debt approximate fair values due to the short-term  maturities
                  or market rates of interest.

         h.       NEW  ACCOUNTING  PRONOUNCEMENT   - In June 1998, the Financial
                  Accounting  Standards  Board ("FASB")  issued  SFAS No.  133,
                  ACCOUNTING FOR DERIVATIVE  INSTRUMENTS AND HEDGING ACTIVITIES,
                  but is  considering  delaying the  effective  date from fiscal
                  years  beginning  after  June  15,  1999  to  June  15,  2000.
                  Management  has not completed the analysis of the effects SFAS
                  No. 133 will have on its  financial  statements.  SFAS No. 133
                  establishes  accounting and reporting standards for derivative
                  instruments,  including certain derivatives  embedded in other
                  contracts,  and  for  hedging  activities.  It  requires  that
                  entities   record  all   derivatives   as  either   assets  or
                  liabilities, measured at fair value.

2.       INCOME TAXES

         The provision  (benefit)  for federal  income taxes for the years ended
         March 31 consists of the following:


                                            1999          1998           1997
                                          --------      --------       --------
         Current                          $140,788                     $(53,238)
         Deferred                           16,090      $ 59,538        (18,737)
                                          --------      --------       --------

         Total                            $156,878      $ 59,538       $(71,975)
                                          ========      ========       ========

                                       19
<PAGE>

         A  reconciliation  of the provision  (benefit) for income taxes and the
         amount that would be computed using statutory  federal income tax rates
         on income before income taxes for the years ended March 31 is set forth
         below:


                                              1999         1998           1997
                                            --------     --------      --------
         Income taxes at federal rates      $152,400     $ 73,500      $(63,000)
         Other - net                           4,478      (13,962)       (8,975)
                                            --------     --------      --------
         Provision (benefit) for
          income taxes                      $156,878     $ 59,538      $(71,975)
                                            ========     ========      ========


         Deferred  income  taxes  result  from  temporary   differences  on  the
         recognition of certain  revenue and expense items for tax and financial
         statement  purposes,  principally the gain on settlement of involuntary
         conversion in 1982, which resulted from fire damage,  which resulted in
         a deferred tax liability of $194,990.  The Company paid income taxes of
         approximately $0, $18,250, and $50,000 during the years ended March 31,
         1999, 1998 and 1997, respectively.

3.       COMMITMENTS AND CONTINGENCIES

         The Company receives its operating authorization from the National Park
         Service  ("NPS").  The  NPS  Contract  (the  "Contract")  which  became
         effective on January 1, 1990,  will expire on December 31, 2009.  Under
         the terms of the Contract,  prior to December 31, 1999,  the Company is
         required to move its existing 54-unit  riverside motel from its current
         location  to the high  ground  above  the  river,  to  provide  for new
         employee housing and make certain other  improvements.  The Company has
         chosen to meet these  requirements  by moving the  riverside  motel and
         converting it into employee housing,  plus building additional employee
         support   facilities,   which  began  in  summer  1998,  with  expected
         completion in summer 2000. The cost of this  relocation is estimated to
         be  between  $1,200,000  and  $1,500,000  depending  on the  number  of
         employee  housing  units  and the  extent  of  additional  improvements
         required by the NPS. If the Company builds new lodging units to replace
         the 54-unit  riverside  motel, the additional cost to build these units
         is estimated to be between $1,000,000 and $1,200,000. This would result
         in a combined total cost of relocation and new  construction of between
         $2,200,000 and $2,700,000.  The Company has not made a decision at this
         time regarding replacing the riverside motel with new lodging units.

         The Contract fee to the NPS is calculated  at 2% of gross  receipts (as
         defined),  subject to review and possible  adjustment every five years.
         For the years ended March 31, 1999, 1998 and 1997, this fee amounted to
         $79,712, $88,374, and $76,041, respectively, which has been recorded as
         operating expense.

         Flagg Ranch faces  competition  from hotels,  camping areas and trailer
         facilities in Yellowstone  and Grand Teton National  Parks,  as well as
         from a large number of hotels and motels in Wyoming, Montana and Idaho,
         offering  some  facilities  which are similar to those offered by Flagg
         Ranch.  In  addition,  the  business of Flagg Ranch is  susceptible  to
         weather  conditions and  unfavorable  trends in the economy as a whole.
         Business could be significantly  affected  depending upon actions which
         might be taken by the NPS if cutbacks are made to their budget.  If the
         NPS decides to close  Yellowstone  National Park for the winter months,
         then Flagg Ranch would have to discontinue its winter  operations.  NPS
         budget cutbacks could also  negatively  impact the length of the summer
         season and the number of visitors to the Parks and have a corresponding
         negative impact on Flagg Ranch revenues.

                                       20
<PAGE>
         On May 20, 1997, the Fund for Animals,  Biodiversity  Legal  Foundation
         et. al. filed a lawsuit  against the NPS  challenging the action of the
         NPS regarding winter use of Yellowstone and Grand Teton National Parks.
         The plaintiffs have asked the Federal Court to stop winter  activities,
         primarily  snowmobiling and related snow grooming,  until environmental
         impacts  are  documented.  A  settlement  agreement  was  reached  that
         requires the NPS to prepare an environmental  impact statement  ("EIS")
         over the next three  years,  during  which  time  period the Parks will
         continue  activities under the existing winter visitor-use plan. If the
         NPS  is  required  to  suspend  or  terminate   winter   activities  in
         Yellowstone  National  Park,  Flagg  Ranch  would  have to  suspend  or
         discontinue its winter operations.

4.       TRANSACTIONS WITH RELATED PARTIES

         General and administrative - related party expenses for the years ended
         March  31,  1999,   1998  and  1997, represent   management   fees  and
         administrative   expenses   paid  to  related   parties   and   totaled
         approximately $156,000, $160,000, and $412,000,  respectively.  For the
         year ended  March 31,  1997 all  related  parties  referred to in these
         financial  statements  were  owned by family  members of  Elizabeth  A.
         Nicoli who were the  majority  owners of the  Company in 1997.  Related
         parties  during the years  ended  March 31, 1999 and March 31, 1998 are
         owned by the Company's current majority owner, Robert Walker, or family
         members.

         Operating - related  party  expenses  for the year ended March 31, 1997
         represent leased  snowmobiles  under  short-term  leases from a related
         party.

         The Company incurred borrowings under a line of credit agreement with a
         related  party (Note 5).  Interest  incurred for the fiscal years ended
         March  31,  1999,  1998 and  1997 was  $108,985,  $91,602  and  $14,594
         respectively.  For fiscal year 1999, the Company capitalized $39,019 of
         interest.

         In March 1998,  the Company sold 96  snowmobiles  for total proceeds of
         $144,000  and a loss  of  $94,387.  A  related  party  of  the  Company
         purchased  46  snowmobiles  for a total of  $82,800,  all of which  was
         recorded as a receivable  at March 31, 1998.  During 1999,  the Company
         repurchased  41  snowmobiles  from the related  party for $75,645.  The
         Company  subsequently  sold the snowmobiles to an unrelated  entity and
         recognized a loss of approximately $14,000.

                                       21
<PAGE>
         At March 31,  1998,  the  Company  recorded  a payable  of $17,929 to a
         related party for certain operating  expenses paid by the related party
         on behalf of the Company.

         During the year ended March 31, 1999,  the Company  paid  approximately
         $30,000 to a related  party for  construction  costs related to the new
         employee housing and other facility improvements.

5.       NOTE PAYABLE UNDER LINE OF CREDIT

         During  October  1998,  the  Company  entered  into  a line  of  credit
         agreement  ("Agreement")  with an affiliated company expiring September
         30, 1999, which provides for secured  borrowings of up to $1,500,000 at
         an  interest  rate of  prime  plus .5  percent.  Borrowings  under  the
         Agreement are  collateralized  by the assets and  improvements of Flagg
         Ranch. The Company has borrowed $1,460,000 on this line of credit as of
         March 31,  1999.  The Company  used,  in part,  the  proceeds  from the
         drawdown on the Agreement to fund its construction  costs. The terms of
         the  Agreement  contain,  among  other  provisions,   requirements  for
         maintaining minimum cash flows (as defined in the Agreement) and places
         limitations  on the  Company's  ability to make loans.  As of March 31,
         1999,  the Company  was not in  compliance  with the minimum  cash flow
         requirement.  On June  8,  1999,  the  Company  received  a  waiver  of
         noncompliance for the year ended March 31, 1999.

                                       22
<PAGE>
ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURES

          None

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Name                   Age   Positions With Company    Term as Director
         ----                   ---   ----------------------    ----------------

         Elizabeth A. Nicoli     69   Chairman/Director         10/75 - Present
         Robert L. Walker        65   President/Director        12/97 - Present
         A. Clarene Law          65   Director                   6/92 - Present
         F. Ray Evarts           73   Director/Secretary         9/22 - Present
         Michael P. Perikly      47   Director/Treasurer/CFO    12/97 - Present

         Mrs.  Elizabeth  A.  Nicoli was  elected to the Board of  Directors  in
October,  1975, and has been associated with the Company in various  capacities.
Upon the death of Mr. Nicoli, the former Chairman, Treasurer,  President and CEO
of the Company,  on October 22, 1996, she was elected as President and Chairman,
and served as President until September 29, 1997.

         Robert L. Walker was elected as President on September 30, 1997 and was
elected to the Board of  Directors  in December,  1997.  Mr.  Walker has been an
executive  with  numerous  companies  over the last 35  years.  From 1976 to the
present,  he has been  President  of PNI,  Inc.,  a privately  owned  investment
company.  From 1989 to 1994,  he was  President  and Chairman of Turf  Paradise,
Inc.,  an  Arizona  based,  publicly  traded  company  that owns and  operates a
thoroughbred horse racing facility conducting pari-mutuel wagering.

         A. Clarene Law was elected to the Board of  Directors on September  11,
1992. She is the owner and Chief  Executive  Officer of Elk Country Motels which
operates four motel properties  aggregating 270 rooms in Jackson,  Wyoming. Mrs.
Law has over 35 years experience in the hospitality industry.

         F. Ray Evarts was elected to the Board of Directors  on  September  11,
1992.  He was  elected  Assistant  Secretary  of the Company on June 6, 1994 and
Secretary  on August 5, 1997.  He is  currently  self-employed  as a real estate
consultant in Arizona and  California,  for planning,  developing and leasing of
commercial  and  multi-family  properties as well as consulting in all phases of
the restaurant  business.  From 1982 to 1992, he was Project  Manager for Warren
Properties,  Inc.,  a  California  based,  privately  held  hotel and  apartment
developer and owner with properties in 18 states.

         Michael P. Perikly,  CPA, was elected as Treasurer and Chief  Financial
Officer of the  Company on  September  30,  1997 and was elected to the Board of
Directors  in  December,  1997.  From  1990 to the  present,  he has been  Chief
Financial Officer of PNI, Inc., a privately owned investment company.  From 1989
to 1994, Mr. Perikly was the Chief Financial Officer, Secretary and Treasurer of
Turf  Paradise,  Inc., an Arizona based,  publicly  traded company that owns and
operates a thoroughbred horse racing facility conducting pari-mutuel wagering.

                                       23
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         Name and principal
         Position                             Year          Salary
         ------------------                   ----          ------

         Robert L. Walker                     1999               --
         President*                           1998

         Elizabeth A. Nicoli                  1998               --
         President and Chairman**             1997               --

         John L. Bradley                      1997         $ 75,464
         President***

         All executive officers
         as a group (three)                   1999         $ 36,000
                    (three)                   1998         $ 28,000
                    (three)                   1997         $188,904

         All  executive  officers  as a group  received  cash  compensation  for
services  rendered to the Company over the three  years,  a portion of which was
paid pursuant to the management  contracts  described under the heading "Item 12
Certain Relationships and Related Transactions."

There are no compensation arrangements for directors.

*    Robert L. Walker became President of the Company on September 30, 1997.

**   Elizabeth A. Nicoli became  Chairman of the Company on October 23, 1996 and
     served  as  President  from  October  23,  1996  until her  resignation  on
     September 29, 1997.

***  John Bradley  served as President  until the  termination of his employment
     with the Company on July 31, 1996,  at which time Anthony J. Nicoli  became
     President.

                                       24
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following  table  indicates as of June 8, 1999, the common stock of
the  Registrant  owned  beneficially  by each  director,  by all  directors  and
executive  officers as a group and by each person who is known by the Registrant
to own beneficially more than 5% of the outstanding common stock.

Name and Address                      Common Stock            Percent Held
----------------                      ------------            ------------
Robert L. Walker                           351,669                50.63%
Director
3207 S. Hardy Drive
Tempe, Arizona 85282

A. Clarene Law                               3,000                    *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016

Michael P. Perikly                           2,500                    *
Director
3207 S. Hardy Drive
Tempe, Arizona 85282

F. Ray Evarts                                  100                    *
Director
1702 E. Highland Ave., #312
Phoenix, Arizona 85016

William S. Levine                          124,233 (A)             17.9%
Levine Investments Limited
Partnership
2525 E. Camelback Rd., Suite #275
Phoenix, Arizona 85016

Krist A. Jake                               73,800 (B)             10.6%
P.O. Box 640219
San Francisco, California 94164

Bar-B-Bar Corporation                       37,307 (C)              5.4%
Max C. Chapman, Jr.
P.O. Box 194
Scarborough, New York 10510

All Executive Officers and                 357,269                51.44%
Directors as a group (5 persons)

*Less than 1%

                                       25
<PAGE>
(A)      Based on Schedule 13G filed with the Securities and Exchange Commission
         on March 12, 1998 by William S. Levine and Levine  Investments  Limited
         Partnership.

(B)      Based on Schedule 13D filed with the Securities and Exchange Commission
         on June 7, 1997 by Krist A. Jake.

(C)      Based on Schedule 13D filed with the Securities and Exchange Commission
         on December 6, 1991 by Bar-B-Bar Corporation and Max C. Chapman, Jr.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

GENERAL AND  ADMINISTRATIVE  - related party  expenses for the years ended March
31, 1999, 1998 and 1997, represent  management fees and administrative  expenses
paid to related  parties  and  totaled  approximately  $156,000,  $160,000,  and
$412,000,  respectively.  For the year ended March 31, 1997 all related  parties
referred  to in these  financial  statements  were  owned by family  members  of
Elizabeth A. Nicoli who were the majority owners of the Company in 1997. Related
parties  during the years  ended  March 31, 1999 and March 31, 1998 are owned by
the Company's current majority owner, Robert Walker, or family members.

OPERATING - related party  expenses for the year ended March 31, 1997  represent
leased snowmobiles under short-term leases from a related party.

The Company incurred  borrowings under a line of credit agreement with a related
party (Note 5).  Interest  incurred  for the fiscal  years ended March 31, 1999,
1998 and 1997 was $108,985,  $91,602 and $14,594  respectively.  For fiscal year
1999, the Company capitalized $39,019 of interest.

In March 1998,  the Company sold 96  snowmobiles  for total proceeds of $144,000
and a loss of $94,387.  A related party of the Company  purchased 46 snowmobiles
for a total of $82,800,  all of which was recorded as a receivable  at March 31,
1998. During 1999, the Company repurchased 41 snowmobiles from the related party
for  $75,645.  The Company  subsequently  sold the  snowmobiles  to an unrelated
entity and recognized a loss of approximately $14,000.

At March 31, 1998, the Company  recorded a payable of $17,929 to a related party
for  certain  operating  expenses  paid by the  related  party on  behalf of the
Company.

During the year ended March 31, 1999, the Company paid approximately  $30,000 to
a related party for  construction  costs related to the new employee housing and
other facility improvements.

                                       26
<PAGE>
                                     PART IV

ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

         (a)  1. Financial Statements                                       Page
                                                                            ----

          The  following  consolidated  financial  statements  of  International
          Leisure Hosts, Ltd. and Subsidiary are included in Part II, Item 7:

                  Independent Auditors' Report                                12

                  Consolidated Balance Sheets - March 31, 1999
                  and 1998                                                    13

                  Consolidated Statements of Operations - years
                  ended March 31, 1999, 1998 and 1997                         14

                  Consolidated Statements of Shareholders' Equity
                  years ended March 31, 1999, 1998 and 1997                   15

                  Consolidated Statements of Cash Flows-
                  years ended March 31, 1999, 1998 and 1997                   16

                  Notes to consolidated financial statements                  18

           3.     The following  exhibits are incorporated by reference
                  as indicated:

           3.1    By-Laws-Adopted  June 22,  1992  Filed with Form 10-K
                  dated March 31, 1992

           3.2    Articles of Incorporation-filed  with Form 10-K dated
                  March 31, 1986, pages 32-41

           10.1   United  States  Department  of the Interior  National
                  Park  Service  Contract-filed  with Form  10-Q  dated
                  December 31, 1989

           10.2   Pacific  West  Construction  Contract  for new  lodge
                  building filed with Form 10-KSB dated March 31, 1994

           10.3   Pacific West Construction Contract for 50 new lodging
                  units filed with Form 10-QSB dated June 30, 1994

           10.4   Pacific West Construction contract for 42 new lodging
                  units filed with Form 10-QSB dated September 30, 1995

           22.    Subsidiaries of Registrant: incorporated by reference
                  from the  Registrant's  report on Form  10-KSB  dated
                  March 31, 1994

         (b)   None.

All other  schedules and exhibits for which  provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related  instructions or are inapplicable  and,  therefore,  have been
omitted.

                                       27
<PAGE>
                                   SIGNATURES

         Pursuant to the  requirements of Section 13 or 15 (d) of the Securities
and  Exchange  Act of 1934,  the  Registrant  has duly  caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.

                                        International Leisure Hosts, Ltd.

                                        /s/ Robert L. Walker
                                        ------------------------------
                                        Robert L. Walker, President
                                        Date: 6/29/99


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the date indicated.


/s/ Robert L. Walker                    /s/ Michael P. Perikly
------------------------------          ------------------------------
Robert L. Walker                        Michael P. Perikly
President                               Chief Financial Officer/Treasurer
Date: 6/29/99                           Date: 6/29/99

                                       28