UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB

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

                      For fiscal year ended March 31, 1997
                                           ----------------

                          Commission File Number 0-3858
                                                --------

                           INTERNATIONAL LEISURE HOSTS, LTD.
--------------------------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

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

1702 E. Highland Ave., Ste. #312, Phoenix, AZ                   85016
---------------------------------------------         --------------------------
(Address of principal executive office)                       (Zip Code)

Issuer's telephone number (602) 266-0001
                         ----------------

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)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such  shorter  period  that the issuer 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. $4,093,559
                                                        -------------

As of June 9,1997, 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 $550,341.
<PAGE>
                                     PART I
                                                                          Page
                                                                          ----

Item 1.          Business                                                    3

Item 2.          Properties                                                  5

Item 3.          Legal Proceedings                                           6

Item 4.          Submission of Matters to a Vote of                          6
                 Security Holders

                                     PART II

Item 5.          Market for the Registrant's Common                          7
                 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                           21
                 Accountants on Accounting and Financial Disclosure

                                    PART III

Item 9.          Directors and Executive Officers of the Registrant          21

Item 10.         Executive Compensation                                      22

Item 11.         Security Ownership of Certain                               23
                 Beneficial Owners and Management

Item 12.         Certain Relationships and Related Transactions              25


                                     PART IV

Item 13.         Exhibits (including Exhibit Index),                         26
                 Financial Statements, Schedules and
                 Reports on Form 8-K
                                       2
<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 Village ("Flagg"),  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  ("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 and were rented during the winter season. 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. It is anticipated
that the new maintenance and laundry  facilities will be completed by August 31,
1997.

     During  fiscal  year  1996,  Flagg  provided  overnight  accommodations  to
national park visitors for up to 372 persons per night via its 54-unit motel and
50 cabins. Upon substantial  completion of the 42 cabins in December 1996, Flagg
increased its overnight  accommodations to 536 persons per night via its 54-unit
motel and 92 cabin  units.  In  addition  to the motel  and 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 74% of Flagg's fiscal 1997 and 1996 operating revenues.

     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,  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. 
                                       3
<PAGE>
     The winter season, which runs from mid-December through mid-March accounted
for 26% of Flagg's fiscal 1997 and 1996 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.

     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 1997, Flagg had a fleet of 85 new Polaris  snowmobiles  available to
the public for rental.  In  addition,  Flagg  offers daily trips to Old Faithful
Lodge in Yellowstone  via its  11-passenger  snowcoach.  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 expense  under the  Contract is subject to review and  adjustment  every
five years.  For fiscal 1997, the fee was calculated at 2% of 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. In 1997,
extreme winter weather  conditions  caused numerous  closures of local airports,
roads,  and national  parks,  primarily  during the  Christmas  holiday  season,
traditionally  the  strongest  period  of the  winter  season.  These  closures,
combined with record snowfall throughout the remainder of the winter resulted in
lower than anticipated winter season revenues for fiscal 1997.

     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  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.

     The Federal Government's  inability to reach a budget agreement resulted in
a partial  shutdown of the Government  which included the closure of Yellowstone
from  mid-December  1995 to January 5, 1996.  As a National  Park  Concessioner,
Flagg was forced to close,  and it remained closed during the Christmas  holiday
season.
                                        4
<PAGE>
The Company estimates the operating revenue lost as a result of this closure was
in excess of $300,000 for fiscal 1996.

     On May 20, 1997, the Fund for Animals,  Biodiversity  Legal  Foundation et.
al. filed a lawsuit against the National Park Service  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.  If the Federal Court were to suspend or terminate winter activities
in  Yellowstone,  then Flagg  would have to  suspend or  discontinue  its winter
operations.

     The Company  employed 335  individuals  in fiscal 1997,  consisting  of 306
part-time employees and 29 full-time employees.  The maximum number of employees
at any one time during fiscal 1997 was 138.

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  certain  improvements  (including the new
lodge and new cabin  units) made to the property at a price equal to the cost of
reconstruction less depreciation.

     During fiscal year 1996, the Company commenced construction of 42 new cabin
units,  which were  substantially  completed  and placed in service in December,
1996. When completed, the total cost will be approximately  $1,320,000, of which
$1,250,000 was incurred as of March 31, 1997. With the substantial completion of
the 42 new cabin units in December  1996, the Company has a total of 146 lodging
units consisting of 92 cabin units and a 54-unit riverside motel complex. During
fiscal  year  1997,  the  Company  commenced  construction  of new  laundry  and
maintenance  facilities,  which are scheduled to be completed by August 31, 1997
for an estimated cost of $170,000.

     Under  the terms of the  Contract,  the  Company  is  required  to move the
existing  54-unit  riverside motel from its current  location to the high ground
above the river, to provide for new employee housing and make other improvements
prior to December 31, 1999. If the Company chooses to meet these requirements by
moving the riverside motel and converting it into employee housing plus building
additional employee housing and a new employee dining facility, then the cost is
estimated to be between  $2,400,000  and  $2,800,000  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 
                                       5
<PAGE>
motel,  the additional cost to build these units will be between  $1,000,000 and
$1,200,000. This would result in a total cost of relocation and new construction
combined of between $3,400,000 and $4,000,000.

     On a temporary basis, during the summer of 1997,  twenty-five  recreational
vehicle  sites and one tent site will not be available for rental to the public.
These sites will be utilized by  construction  workers  during the  construction
period and by employees  until the new employee  recreational  vehicle sites are
completed. This reduces the campground facility to 72 recreational vehicle sites
and 73 tent sites, and thus will negatively  impact  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
                                       6
<PAGE>
                                     PART II
                                     -------

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

     International   Leisure  Hosts,   Ltd.   common  stock  is  traded  in  the
over-the-counter market, 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 1996 and 1997.

                                                 Bid
                                                 ---
                                        High              Low
                                        ----              ---
     Quarter Ended
     -------------
     June 30, 1995                      5                 5
     September 30, 1995                 5                 5
     December 31, 1995                  5 3/8             5
     March 31, 1996                     5 7/8             5 3/8
     June 30, 1996                      5 7/8             5 3/8
     September 30, 1996                 5 7/8             5
     December 31, 1996                  5 1/2             4 3/4
     March 31, 1997                     5 1/2             5

     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,  1997 there were  694,577  shares of  outstanding
common stock and an estimated 1,100 shareholders of record.

     The level of trading during fiscal year 1997 was approximately 1,000 shares
the first  quarter,  9,500  shares the second  quarter,  2,350  shares the third
quarter,  and 3,000 shares the fourth  quarter  ending  March 31, 1997.  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.
                                       7
<PAGE>
Selected Financial Data

     The selected  financial data for each of the five years in the period ended
March  31,  1997  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.

                           FISCAL YEAR ENDED MARCH 31,
                     (In thousands except per share amounts)
                     ---------------------------------------

                                 1997      1996      1995      1994      1993
                                 ----      ----      ----      ----      ----
Total Revenues                $ 4,094    $ 3,976   $ 3,781   $ 3,694   $ 3,552

Net Income (Loss)                (113)       199       458       536       483

Net Income (Loss) Per Share      (.16)       .29       .66       .77       .68

Total Assets                    5,363      4,266     4,431     3,568     3,100

Long-Term Obligations             446          0         0         0         0

Shareholders' Equity            3,672      3,785     3,604     3,147     2,629

Book Value Per Share             5.29       5.45      5.16      4.50      3.74

                                       8
<PAGE>
Item 6.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations

     The Company's  net loss was  $113,000,  ($.16) per share for the year ended
March 31, 1997. This compares to net income of $199,000, $.29 per share, in 1996
and $458,000,  $.66 per share, in 1995. The primary factors  contributing to the
$312,000 decline in 1997 net income were the severe winter weather conditions in
1997 which caused  numerous  closures of the local  airport,  roads and national
parks plus the increased  costs  associated  with the  construction  and initial
start up of the 42 new  cabin  units.  Changes  in the  Company's  revenues  and
expenses for the fiscal years 1997 and 1996 are summarized below. All references
to years represent fiscal years ended March 31.

     Total  revenues  for 1997  increased  by $117,000 or 3% over 1996.  Of this
increase,  $93,000 was from  grocery  store sales,  $31,000 from food  services,
$29,000 from gift shop sales,  $17,000 from  snowmobile  parts revenue,  $12,000
from  insurance  proceeds  and $7,000 from the sale of old cabins.  Decreases of
$48,000 in snowmobile revenue,  $15,000 in interest income,  $12,000 in gasoline
sales and $10,000 in snowcoach  revenue  offset the above  increases.  The total
number of visitors  through the south  entrance of  Yellowstone  decreased 4% in
1997 from  1966.  While  total  revenues  from room and cabin  rentals  remained
basically  unchanged from 1996 to 1997, the relative mix between motel and cabin
units and the average daily rates changed.  In 1996,  motel unit rentals totaled
6,308 with an average  daily rate of $91 and cabin unit  rentals  totaled  7,283
with an average  daily rate of $94. In 1997,  motel unit rentals  totaled  5,367
with an average  daily rate of $89 and cabin unit rentals  totaled 7,759 with an
average daily rate of $100. In 1997, the Company increased its marketing efforts
to have tour buses stop at Flagg for lunch and dinner.  The increased  number of
tour buses  contributed to the  improvement in grocery store,  food services and
gift shop revenues.

     Although  the  national  parks were closed for 19 days during the winter of
1996  because of the Federal  Government  shutdown,  the 1997 winter  season was
shorter than the 1996 winter season. The 1997 winter season consisted of only 67
days compared to 75 days in 1996. In 1996 the national  parks opened on December
15, 1995 and closed on March 17, 1996, whereas in 1997 the national parks opened
on December 20, 1996 and closed on March 9, 1997.  In addition,  extreme  winter
weather  conditions  in 1997  caused the  closure of local  airports,  roads and
national parks for 13 days,  primarily during the Christmas holiday season.  The
number of winter visitors through the south entrance of Yellowstone decreased 7%
in 1997  compared  to 1996.  As a  result,  the  number  of  snowmobile  rentals
decreased from 4,610 in 1996 to 3,995 in 1997.

     Total  revenues  for 1996  increased  by $195,000 or 5% over 1995.  Of this
increase,  $275,000 was from motel and cabin rentals, $34,000 from grocery store
sales, $104,000 from food services,  $35,000 from RV park rentals,  $60,000 from
gift shop sales,  $48,000 from horse rental revenue, and $63,000 from float trip
revenue.  Decreases  of  $158,000 in  snowmobile  revenue,  $9,000 in  snowcoach
revenue,  $163,000 in gasoline sales,  $59,000 in interest income and $17,000 in
other income  offset the above  increases.  The average daily rates were $91 for
motel units and $94 for cabins compared to $76 and $67 respectively in 1995. The
number of motel and cabin rental days decreased to 13,591 in 1996 from 13,811 in
1995.
                                       9
<PAGE>
     Although motel and cabin rental days were down in 1996, the new cabin units
have significantly higher rack rates,  resulting in an increase in total lodging
revenue. The new lodge facility has a larger restaurant,  gift shop, and grocery
store,  which  contributed  to the  increases in these  revenues.  A better than
average snowfall,  along with a wet spring,  provided excellent river conditions
resulting in a large  increase in float trip revenue.  During  fiscal 1996,  the
Company began offering horse trail rides during the summer season. The decreases
in snowmobile  and snowcoach  revenue in 1996 were caused by the shutdown of the
Federal  Government  and related  closure of  Yellowstone  during the  Christmas
holiday  season,  typically  the  strongest  period of the  winter  season.  The
decrease in gasoline  sales is primarily a result of the new location of the gas
station away from the main highway.

Costs and Expenses
------------------

     The ratio of cost of merchandise  sold to sales of  merchandise  was 61% in
1997,  56% in 1996 and 58% in 1995.  At the end of the 1997 season,  significant
price reductions were made on selected gift shop items in an effort to liquidate
old,  stagnant  merchandise in preparation for the 1998 season,  resulting in an
increased cost of sales percentage.  Ending  merchandise  inventories  decreased
from $167,000 at March 31, 1996 to $118,000 at March 31, 1997.

     Operating  expenses  increased  by  $392,000  or 20% in 1997 as compared to
1996. In addition,  the ratio of operating costs to operating revenues increased
to 57% in 1997 up from 49% in 1996. The major increases consisted of $137,000 in
labor, $51,000 in supplies,  $48,000 in utilities,  $44,000 in snowmobile parts,
$40,000 in repairs and maintenance,  $22,000 in transportation rentals,  $21,000
in advertising and $20,000 in property taxes. In general the operating  expenses
increased due to the addition of 42 new cabin units during 1997, expanded winter
services  provided  to guests  and the  impact of the  unusually  severe  winter
weather  conditions in 1997.  The labor increase was the result of a 9% increase
in the federal minimum wage, in conjunction  with increasing the number of staff
in accounting, marketing,  housekeeping, motel front desk, reservations and food
services. The bulk of the increase in supplies came from the purchase of initial
start-up supplies for the 42 new cabin units  completed  in 1997.  The number of
cabins opened  during the winter season went from 50 in 1996 to 92 in 1997.  The
increase in  utilities  was  generated  by the 84%  increase in cabin units open
during the winter season.  In addition,  the riverside  motel units,  which were
closed  down during the winter of 1996,  were opened for the 1997 winter  season
and used as extra employee housing.

     Operating  expenses  increased  by  $392,000  or 25% in 1996 as compared to
1995. In addition,  the ratio of operating costs to operating revenues increased
to 49% in 1996 from 43% in 1995. The major increases in operating  expenses were
$173,000 in operating labor,  $59,000 in outside services for the float trip and
horse  operators,  $17,000  in  advertising,  $25,000  in  insurance,  $9,000 in
property  taxes,  $45,000  in  utilities,  and  $52,000 in  operating  supplies.
Operating  expenses  increased  due to  operation  of the  new  facilities,  the
additional costs associated with the opening of the new facilities,  and the new
and expanded  horse  rental and float trip  operations.  The Federal  Government
shutdown and closure of Yellowstone  contributed  greatly to the increase in the
ratio of operating expenses to operating revenues.  During the park 
                                       10
<PAGE>
closure,  the Company lost approximately  $300,000 in projected revenue, but was
unable to reduce  operating  expenses because it had to maintain a full staff at
all times due to the uncertainty of when the shutdown would end.

     General and administrative  expenses decreased by $66,000 or 12% in 1997 as
compared to 1996. The decrease  consisted  primarily of reductions in management
fees of $24,000, professional fees of $24,000 and travel of $23,000.

     General and administrative  expenses ("G&A") increased by $99,000 or 22% in
1996 as compared to 1995.  G&A as a ratio of operating  revenues was 14% in 1996
as compared to 13% in 1995.  There was a $120,000  increase in management  fees,
which related to the management of the newly  expanded  facilities and oversight
of the  major  construction  projects.  There  was also a  $20,000  increase  in
professional  fees.  Decreases  of  $20,000  in  travel  and  $21,000  in  other
administrative expenses offset the above increases.

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 the fiscal year ended March 31, 1997, the Company  incurred costs of
approximately  $976,000 to  substantially  complete  construction  of the 42 new
cabin units,  which were placed in to service in December 1996.  When completed,
the total cost of the cabins will be approximately $1,320,000.  During 1997, the
Company also incurred costs of approximately  $214,000  relating to construction
of  new  laundry  and  maintenance  facilities,   employee  housing,  and  other
improvements  required under the NPS contract.  As a result, the working capital
decreased  from  $16,000 at March 31,  1996 to a negative  $677,000 at March 31,
1997.  The Company plans to incur  additional  costs of between  $3,400,000  and
$4,000,000  prior to December 31, 1999 to construct new laundry and  maintenance
facilities,  new employee  housing units, new motel units replacing the existing
54-unit  riverside motel complex and other  improvements  required under the NPS
Contract.

     The Company intends to fund these improvements  through existing cash funds
and cash generated from  operations,  plus  additional  borrowings from lenders.
Cash generated from  operations was $430,000,  $139,000,  and $766,000 in fiscal
years 1997, 1996, and 1995, respectively.  The Company has two credit facilities
with a bank.  The first  credit  facility  provides  for maximum  borrowings  of
$500,000 with a draw period to September 30, 1997.  Principal  payments begin on
October 30, 1997 in 60 equal  monthly  installments,  maturing on September  30,
2002.  As of March 31,  1997 the Company  had  borrowed  $495,000 on this credit
facility. The second credit facility provides for maximum borrowings of $500,000
and  matures on  September  30,  1997.  As of March 31,  1997,  the  Company had
borrowed $440,000 on this credit facility.
                                       11
<PAGE>
Item 7.       Financial Statements and Supplemental Data


INDEPENDENT AUDITORS' REPORT


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


We have audited the  accompanying  consolidated  balance sheets of International
Leisure  Hosts,  Ltd.  (the  "Company")  as of March 31, 1997 and 1996,  and the
related  consolidated  statements of operations,  shareholders'  equity and cash
flows for each of the three  years in the period  ended  March 31,  1997.  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, 1997 and
1996, and the results of its operations and its cash flows for each of the three
years in the period ended March 31, 1997 in conformity  with generally  accepted
accounting principles.



DELOITTE & TOUCHE LLP
Phoenix, Arizona

May 23, 1997
                                      -12-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.

CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND 1996
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                            1997           1996
<S>                                                                                     <C>            <C>        
ASSETS (Note 5)
CURRENT ASSETS:
  Cash and cash equivalents                                                             $    48,258    $    49,645
  Accounts receivable                                                                        31,828          5,633
  Accounts receivable (affiliate)                                                             9,800          4,800
  Income tax refund receivable                                                              146,404         81,292
  Merchandise inventories                                                                   118,418        167,004
  Prepaid expenses and other                                                                 17,045         11,021
                                                                                        -----------    -----------
          Total current assets                                                              371,753        319,395
                                                                                        -----------    -----------
PROPERTY AND EQUIPMENT (Note 3):
  Buildings and improvements on leased land                                               4,616,051      4,562,418
  Equipment                                                                               2,728,178      1,359,396
  Leasehold improvements                                                                    310,000        310,000
  Construction in process                                                                   213,899        301,876
                                                                                        -----------    -----------
          Total property and equipment                                                    7,868,128      6,533,690
  Less accumulated depreciation and amortization                                          2,879,362      2,589,192
                                                                                        -----------    -----------
          Property and equipment - net                                                    4,988,766      3,944,498
                                                                                        -----------    -----------
DEPOSITS                                                                                      2,478          2,478
                                                                                        -----------    -----------
TOTAL                                                                                     5,362,997      4,266,371
                                                                                        ===========    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable:
    Trade                                                                               $   128,027    $    59,743
    Construction                                                                             29,226         59,519
  Accrued liabilities                                                                        79,347         44,350
  Accrued liabilities (affiliate) (Note 4)                                                  163,209
  Advance deposits                                                                          159,791        139,935
  Current portion of long-term debt (Note 5)                                                489,500              
                                                                                        -----------    -----------
          Total current liabilities                                                       1,049,100        303,547

DEFERRED INCOME TAXES (Note 2)                                                              196,589        177,852

LONG-TERM DEBT (Note 5)                                                                     445,500              
                                                                                        -----------    -----------
          Total liabilities                                                               1,691,189        481,399
                                                                                        -----------    -----------
COMMITMENTS AND CONTINGENCIES (Note 3)

SHAREHOLDERS' EQUITY:
  Preferred stock, $5 par value - authorized, 100,000 shares; issued, none
  Common stock, $.01 par value - authorized, 2,000,000 shares; issued, 718,373 shares         7,184          7,184
  Additional paid-in capital                                                                656,426        656,426
  Retained earnings                                                                       3,086,110      3,198,874
  Common stock in treasury - at cost, 23,796 shares and 23,696 shares
    in 1997 and 1996, respectively                                                          (77,912)       (77,512)
                                                                                        -----------    -----------
          Total shareholders' equity                                                      3,671,808      3,784,972
                                                                                        -----------    -----------
TOTAL                                                                                   $ 5,362,997    $ 4,266,371
                                                                                        ===========    ===========
</TABLE>
See notes to consolidated financial statements.
                                      -13-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<TABLE>
----------------------------------------------------------------------------------------------
<CAPTION>
                                                        1997           1996          1995
<S>                                                  <C>            <C>           <C>        
REVENUES:
  Sales of merchandise                               $ 1,874,158    $ 1,710,931   $ 1,687,416
  Room, cabin and trailer space rentals                1,515,218      1,522,645     1,230,690
  Snowmobile rentals                                     505,973        553,555       711,264
  Interest                                                 4,043         19,008        77,910
  Other rentals and income                               194,167        169,954        73,420
                                                     -----------    -----------   -----------

          Total revenues                               4,093,559      3,976,093     3,780,700
                                                     -----------    -----------   -----------

COSTS AND EXPENSES:
  Cost of merchandise                                  1,147,788        960,687       984,311
  Operating (Note 3)                                   2,179,595      1,787,110     1,394,901
  Operating - affiliated (Note 4)                        169,100        169,100       169,100
  General and administrative                              78,200        120,575       142,090
  General and administrative - affiliated (Note 4)       412,286        436,384       316,231
  Depreciation and amortization                          291,329        232,050        79,542
                                                     -----------    -----------   -----------

          Total costs and expenses                     4,278,298      3,705,906     3,086,175
                                                     -----------    -----------   -----------

(LOSS) INCOME BEFORE INCOME TAXES                       (184,739)       270,187       694,525

(BENEFIT) PROVISION FOR INCOME TAXES
  (Note 2)                                               (71,975)        71,000       237,000
                                                     -----------    -----------   -----------

NET (LOSS) INCOME                                    $  (112,764)   $   199,187   $   457,525
                                                     ===========    ===========   ===========

NET (LOSS) INCOME PER COMMON SHARE
   (Note 1)                                          $     (0.16)   $      0.29   $       .66
                                                     ===========    ===========   ===========
</TABLE>
See notes to consolidated financial statements.
                                      -14-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
                                     Common Stock         Additional             
                                ----------------------     Paid-in     Retained      Treasury
                                  Shares       Amount      Capital     Earnings       Stock

<S>                              <C>        <C>          <C>          <C>          <C>        
BALANCE, APRIL 1, 1994           718,373    $    7,184   $  656,426   $2,542,162   $  (59,228)

  Net income                                                             457,525
                                 -------    ----------   ----------   ----------   ---------- 

BALANCE, MARCH 31, 1995          718,373         7,184      656,426    2,999,687      (59,228)

  Purchases of common stock                                                           (18,284)

  Net income                                                             199,187
                                 -------    ----------   ----------   ----------   ---------- 

BALANCE, MARCH 31, 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)
                                 -------    ----------   ----------   ----------   ---------- 
</TABLE>
See notes to consolidated financial statements.
                                      -15-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                    1997           1996           1995
<S>                                                             <C>            <C>            <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                             $  (112,764)   $   199,187    $   457,525
  Adjustments to reconcile net (loss) income to net cash
    provided by operating activities:
      Depreciation and amortization                                 291,329        232,050         79,542
      Deferred income taxes                                          18,737         (3,000)        (2,000)
      Gain on sale of assets                                           (120)
  Changes in assets and liabilities:
    Accounts receivable                                             (26,195)         2,209         33,919
    Accounts receivable (affiliate)                                  (5,000)        (1,787)        16,787
    Merchandise inventories                                          48,586        (52,489)        23,439
    Prepaid income taxes                                             23,335        (66,145)       (15,147)
    Prepaid expenses and other                                       (6,024)        (4,683)           185
    Accounts payable                                                 68,284       (181,375)       176,744
    Accrued liabilities                                             198,206        (18,655)       (17,016)
    Income taxes                                                    (88,447)                      (38,811)
    Advance deposits                                                 19,856         33,415         50,629
                                                                -----------    -----------    -----------
          Net cash provided by operating activities                 429,783        138,727        765,796
                                                                -----------    -----------    -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                            (1,340,235)      (885,049)    (2,766,417)
  Purchases of marketable investment securities                                                  (200,000)
  Sale of marketable investment securities                                         300,000      1,344,848
  Cash and accounts payable segregated for construction of                 
    replacement property                                            (30,293)       (59,028)     1,333,547
  Proceeds from sale of property and equipment                        4,758
                                                                -----------    -----------    -----------
          Net cash used in investing activities                  (1,365,770)      (644,077)      (288,022)
                                                                -----------    -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Common stock purchased for treasury                                  (400)       (18,284)
  Proceeds from long-term debt                                      935,000
                                                                -----------    -----------    -----------
          Net cash provided by (used in) financing activities       934,600        (18,284)
                                                                -----------    -----------    -----------

NET (DECREASE) INCREASE IN CASH AND
  CASH EQUIVALENTS                                                   (1,387)      (523,634)       477,774

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                         49,645        573,279         95,505
                                                                -----------    -----------    -----------

CASH AND CASH EQUIVALENTS, END OF YEAR                               48,258         49,645        573,279
                                                                ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION - Cash paid for interest                               14,594
                                                                ===========
</TABLE>
See notes to consolidated financial statements.
                                      -16-
<PAGE>
INTERNATIONAL LEISURE HOSTS, LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1997, 1996 AND 1995
--------------------------------------------------------------------------------


1.    BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

      The Company operates in one business segment,  the ownership and operation
      of Flagg Ranch,  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.

      Principles  of  Consolidation  -  The  consolidated  financial  statements
      include the  accounts of  International  Leisure  Hosts,  Ltd. and Lewis &
      Clark Lodge, its wholly-owned  subsidiary  (collectively,  the "Company").
      All  intercompany  transactions  and  accounts  have  been  eliminated  in
      consolidation.

      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
            primarily by an accelerated  method over the estimated useful lives,
            which  range from 5 years 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.

      c.    Income taxes have been accounted for in accordance with Statement of
            Financial  Accounting  Standards  ("SFAS") No. 109,  Accounting  for
            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.

      e.    Net (loss)  income 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
            694,610,  697,510  and  698,498  shares  for  1997,  1996 and  1995,
            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.
                                      -17-
<PAGE>
      h.    Reclassifications - Certain  reclassifications have been made to the
            1996  and  1995   financial   statements  to  conform  to  the  1997
            presentation.


2.    INCOME TAXES

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


                                               1997         1996         1995

      Current                               $ (53,238)   $  74,000    $ 239,000
      Deferred                                (18,737)      (3,000)      (2,000)
                                            ---------    ---------    ---------

      Total                                 $ (71,975)   $  71,000    $ 237,000
                                            =========    =========    =========


      A  reconciliation  of the  (benefit)  provision  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:


                                                1997         1996         1995

      Income taxes at federal rates          $ (63,000)   $  92,000   $ 236,000
      Tax-exempt income                              0       (1,000)     (6,000)
      Other - net                               (8,975)     (20,000)      7,000
                                             ---------    ---------   ---------

      (Benefit) provision for income taxes   $ (71,975)   $  71,000   $ 237,000
                                             =========    =========   =========


      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.  This gain  resulted in a deferred tax  liability  of $194,990.  The
      Company paid income taxes of approximately $50,000,  $140,000 and $293,000
      during the years ended March 31, 1997, 1996 and 1995, 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.   If  the  Company  chooses  to  meet  these
      requirements by moving the riverside motel and converting it into employee
      housing  plus  building  additional  employee  housing and a new  employee
      dining facility,  then the cost is estimated to be between  $2,400,000 and
      $2,800,000  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  will be  between  $1,000,000  and
      $1,200,000.  This  would  result  in a total  cost of  relocation  and new
      construction combined of between $3,400,000 and $4,000,000.

      The fee expense to the NPS under the Contract is calculated at 2% of gross
      receipts (as  defined),  subject to review and possible  adjustment  every
      five years.  For the years ended March 31, 1997,  1996 and 1995,  this fee
      amounted to $80,004, $76,260 and $70,607, respectively.
                                      -18-
<PAGE>
      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.

      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.  If the Federal Court were to suspend or terminate
      winter  activities in Yellowstone  National  Park,  then Flagg Ranch would
      have to suspend or discontinue its winter operations.

4.    TRANSACTIONS WITH AFFILIATED COMPANIES AND RELATED PARTIES

      General and administrative expenses - affiliated for the years ended March
      31,  1997,  1996 and 1995  represent  management  fees and  administrative
      expenses paid to affiliated  companies.  All affiliated companies referred
      to in these financial  statements are owned by family members of Elizabeth
      A. Nicoli who are the majority owners of the Company.

      The Company leases  snowmobiles under short-term leases from an affiliated
      company.  For each of the  years  ended  March  31,  1997,  1996 and 1995,
      snowmobile  lease  expense  totaled  $169,100.  As of March 31, 1997,  the
      Company owes the affiliated company $163,209 relating to this lease.

5.    LONG-TERM DEBT

      Long-term debt as of March 31, 1997 consists of the following:
<TABLE>
<S>                                                                                        <C>     
        Bank credit facility which provides maximum borrowings of $500,000,  draw period                 
         extended  from  September  30, 1996 to September  30, 1997,  monthly  interest            
         payments at prime plus .5% (9% at March 31, 1997),  principal  payments  begin            
         October 30, 1997 in 60 equal monthly installments,  maturity date of September            
         30, 2002, collateralized by all accounts, an assignment of                                
         contract and all improvements made to Flagg Ranch property                        $495,000
                                                                                                   
        Additional bank credit facility which provides  maximum  borrowings of $500,000,           
         due September  30, 1997,  monthly  interest  payments at prime plus .5% (9% at            
         March 31, 1997), collateralized by all accounts, an assignment of the contract            
         and all improvements made to Flagg Ranch property                                  440,000
                                                                                           --------
                                                                                                   
        Total                                                                               935,000
        Less current portion                                                                489,500
                                                                                           --------
                                                                                                   
        Long-term debt - net                                                               $445,500
                                                                                           ========
</TABLE>
                                      -19-
<PAGE>
      Annual maturities of long-term debt as of March 31 are as follows:


        1998                                                            $489,500
        1999                                                              99,000
        2000                                                              99,000
        2001                                                              99,000
        2002                                                              99,000
        Thereafter                                                        49,500
                                                                        --------

        Total                                                           $935,000
                                                                        ========


      Both credit  agreements  covering the LOC's with the bank contain  certain
      covenants.   The  agreement  requires  the  Company  to  maintain  certain
      financial  ratios  and,  among other  things,  places  limitations  on the
      Company's  ability to make loans. As of March 31, 1997, the Company was in
      compliance with all covenants.

                                   * * * * * *
                                      -20-

<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
     ---------                  ---               ----------------------
     Elizabeth A. Nicoli        67               Chairman/President/Director
     George B. Toney            70               Director
     A. Clarene Law             63               Director
     F. Ray Evarts              71               Director/Assistant Secretary
     Mark G. Sauder             37               Secretary/Treasurer/CFO

     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.

     George B. Toney was  elected to the Board of  Directors  on  September  11,
1992. He was President of TW  Recreational  Services,  Inc.  ("TW") from 1982 to
1988. Mr. Toney retired from TW in 1988, after 24 years with the company.

     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 34 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.  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.

     Mark G. Sauder,  CPA, was elected as Chief Financial Officer of the Company
on June 6, 1994.  On October 23, 1996 he was elected as Treasurer  and Secretary
of the Company. For the past 7 years Mr. Sauder acted as Chief Financial Officer
for Nicoli  Enterprises.  Mr. Sauder's  experience also includes  serving as the
Chief  Financial  Officer  for  a  commercial  general  contractor,   the  Chief
Accounting  Officer for a real estate  developer and Senior Auditor for a public
accounting firm. 
                                       21
<PAGE>
Item 10.        Executive Compensation

                           SUMMARY COMPENSATION TABLE
                           --------------------------

           (a)                            (b)                   (c)
-----------------------------        -------------        ----------------

Name and principal
      Position                            Year                 Salary

Elizabeth A. Nicoli                       1997                  ---
President and Chairman*                   1996                  ---
                                          1995                  ---

Anthony J. Nicoli                         1997                  ---
CEO, Chairman, President                  1996                  ---
and Treasurer**                           1995                  ---

John L. Bradley                           1997                $ 75,464
President***                              1996                $156,380
                                          1995                $111,725

All executive officers
       as a group (three)                 1997                $188,904
                   (three)                1996                $194,630
                   (three)                1995                $152,366

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.

*    Elizabeth A. Nicoli became President and Chairman of the Company on October
     23, 1996.

**   Anthony J. Nicoli  served as Chairman,  Treasurer,  President and CEO until
     his death on October 22, 1996.

***  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. 
                                       22
<PAGE>
Item 11.      Security Ownership of Certain Beneficial Owners and Management

     The following  table indicates as of June 11, 1997, 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
     ----------------                       ------------            ------------

     Elizabeth A. Nicoli                     203,076 (A)(F)            29.2%
     Director, Chairman, President
     1702 E. Highland Ave., #312
     Phoenix, Arizona 85016

     George B. Toney                           5,000                      *
     Director
     1702 E. Highland Ave., #312
     Phoenix, Arizona 85016

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

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

     William Levine, as                      471,669 (B)(C)(F)         67.9%
     Co-Trustee for the Nicoli Children's
     Trusts, Grandchildren's Trusts
     and the A.J.Nicoli Trust
     1702 E. Highland Ave., #312
     Phoenix, AZ 85016

     Mark G. Sauder                          471,669 (B)(C)(F)         67.9%
     Secretary, Treasurer, CFO, as
     Co-Trustee for the Nicoli Children's
     Trusts, Grandchildren's Trusts
     and the A.J.Nicoli Trust
     1702 E. Highland Ave., #312
     Phoenix, AZ 85016
                                       23
<PAGE>
     Name and Address                       Common Stock            Percent Held
     ----------------                       ------------            ------------

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

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

     All Executive Officers and
     Directors as a group
     (5 persons)

     *Less than 1%

(A)  Elizabeth  A. Nicoli is trustee of the 1978 Nicoli  Children's  Trust which
     holds  105,042  shares of the Common  Stock and trustee of the A.J.  Nicoli
     Charitable Foundation which holds 93,034 shares of the Common Stock. All of
     the  shares  for the 1978  Nicoli  Children's  Trust  and the  A.J.  Nicoli
     Charitable  Foundation are included in the holdings shown  for Elizabeth A.
     Nicoli.  Mrs. Nicoli disclaims  beneficial  ownership of these shares. Mrs.
     Nicoli,  William  Levine and Mark Sauder are  co-trustees of the Anthony J.
     Nicoli  Trust  which holds 5,000  shares of the Common  Stock.  The 105,042
     shares held by the 1978 Nicoli  Children's Trust and the 93,034 shares held
     by the A. J. Nicoli Charitable  Foundation are subject to a proxy agreement
     signed  February  1, 1995 under  which  William  Levine and Mark Sauder are
     co-proxies,  and  accordingly  such shares are also listed as  beneficially
     owned by Mr. Levine and Mr. Sauder.

(B)  William  Levine  and  Mark  Sauder  are  co-trustees  of  the  1974  Nicoli
     Children's  Trust which holds  117,064  shares of the Common  Stock and the
     Nicoli  Grandchildren's  Trusts  which  hold  151,529  shares of the Common
     Stock. Mr. Levine and Mr. Sauder are  co-trustees,  along with Elizabeth A.
     Nicoli,  of the  Anthony J. Nicoli  Trust  which holds 5,000  shares of the
     Common Stock.  Mr. Levine and Mr. Sauder disclaim  beneficial  ownership of
     these shares.  In addition,  this includes  198,076  shares as to which Mr.
     Levine and Mr. Sauder are co-proxies  pursuant to the proxy agreement dated
     February 1, 1995.

(C)  Elizabeth A. Nicoli disclaims beneficial ownership of these shares.

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

(E)  Based upon Schedule 13D filed with the Securities  and Exchange  Commission
     on December 6, 1991 by Bar-B-Bar Corporation and Max C. Chapman, Jr.
                                       24
<PAGE>
(F)  The indicated  shareholders are parties to a Shareholders'  Agreement dated
     September 20, 1991 which imposes  certain  restrictions on transfers of the
     Common Stock and grants the parties  rights to acquire shares held by other
     parties  seeking to transfer  stock and in certain other  circumstances  as
     described in the Agreement.


Item 12.      Certain Relationships and Related Transactions

     General and administrative  expenses - affiliated for the years ended March
31, 1997, 1996, and 1995, represent management fees and administrative  expenses
paid to affiliated companies.  All affiliated companies referred to in this Item
12 are owned by family  members of  Elizabeth  A.  Nicoli,  who are the majority
owners of the Company.

     The Company leases  snowmobiles  under short-term leases from an affiliated
company.  For each of the years ended March 31, 1997, 1996 and 1995,  snowmobile
lease  expense  totaled  $169,000.  As of March 31,  1997,  the Company owes the
affiliated company $163,000 related to this lease.
                                       25
<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, 1997
                      and 1996  . . . . . . . . . . . . . . . . . . . . . .  13

                      Consolidated Statements of Income - years ended
                      March 31, 1997, 1996 and 1995 . . . . . . . . . . . .  14

                      Consolidated Statements of  Shareholders' Equity -
                      years ended March 31, 1997, 1996 and 1995 . . . . . .  15

                      Consolidated Statements of Cash Flows-
                      years ended March 31, 1997, 1996 and 1995 . . . . . .  16

                      Notes to consolidated financial statements  . . . . .  17

     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
                                       26
<PAGE>
(b)           Form 8-K filed on November 5, 1996.

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/ Elizabeth A. Nicoli
                                      ------------------------------------------
                                      Elizabeth A. Nicoli
                                      Chairman of the Board and President

                                      Date:  6/30/97
                                          --------------------------------------

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/ Elizabeth A. Nicoli                   /s/ Mark G. Sauder
-----------------------------------       --------------------------------------
Elizabeth A. Nicoli                       Mark G. Sauder
Chairman of the Board and President       Chief Financial Officer/Secretary/
                                          Treasurer
Date:  6/30/97                            Date:   6/30/97
    -------------------------------            ---------------------------------


/s/ F. Ray Everts                         /s/ Daniel J. Ryan
-----------------------------------       --------------------------------------
F. Ray Evarts, Director                   Daniel J. Ryan, Chief Accountant

Date:  6/30/97                            Date:   6/30/97
    -------------------------------            ---------------------------------
                                       29