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

                                    FORM 10-Q

                                   (Mark One)

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1999.

                                       or

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

         For the transition period from ______________ to ______________

                        Commission File Number: 33-78866
                             ----------------------

                              MOA HOSPITALITY, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                              33-0166914
   (State or other jurisdiction of                          (I.R.S. Employer
    incorporation or organization)                          Identification No.)
                             ----------------------

                           701 Lee Street, Suite 1000
                           Des Plaines, Illinois 60016
                                 (847) 803-1200
     (Address,  including zip code,  and telephone  number,  including area
             code, of registrant's principal executive offices)
                             ----------------------

 Indicate  by check  mark  whether  the  registrant  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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.                       [X] Yes [ ] No


 Number of shares of Common Stock, $.01 par value outstanding as of
June 16, 1999: 800,000

<PAGE>



                               INDEX TO FORM 10-Q

                                                                        Page
  Part I     Financial Information

  Item 1.    Financial Statements

             Condensed consolidated balance sheets - March 31, 1999       2
             (unaudited) and December 31, 1998.

             Condensed consolidated statements of operations -            3
             Three months ended March 31, 1999 and 1998 (unaudited).

             Condensed consolidated statements of cash flows -            4
             Three months ended March 31, 1999 and 1998 (unaudited).

             Notes to condensed consolidated financial statements -       5
             March 31, 1999 (unaudited).


  Item 2.    Management's Discussion and Analysis of Financial
             Condition and Results of Operations

             General                                                      8

             Results of Operations                                        9

             Liquidity and Capital Resources                             12


  Part II    Other Information

  Item 1.    Legal Proceedings                                           14

  Item 2.    Changes in Securities                                       14

  Item 3.    Defaults upon Senior Securities                             14

  Item 4.    Submission of Matters to a Vote of Security Holders         14

  Item 5.    Other Information                                           14

  Item 6.    Exhibits and Reports on Form 8-K                            14


  Signatures                                                             15


<PAGE>
                        PART I - FINANCIAL INFORMATION

Item 1.             Financial Statements

              MOA HOSPITALITY, INC. AND SUBSIDIARIES

              CONDENSED CONSOLIDATED BALANCE SHEETS
                (In thousands, except share data)


                                                    March 31,       December 31,
                                                      1999              1998
                                                   -----------      ------------
                                                   (Unaudited)
 ASSETS
   Current Assets:
   Cash and cash equivalents                       $   19,590       $    19,582
   Accounts receivable from property operations         2,521             2,015
   Operating supplies and prepaid expenses              2,153             2,325
   Current portion of mortgage
     and notes receivable                               2,335             2,139
                                                   -----------      ------------
   Total Current Assets                                26,599            26,061
   Investment property:
     Operating properties,
       net of accumulated depreciation                271,643           279,944
     Land held for development                          4,221             3,829
                                                   -----------      ------------
   Total investment property                          275,864           283,773
   Other Assets:
     Deposits and other assets                         10,434             5,507
     Mortgage and other notes receivable,
       less current portion                            16,824            11,626
     Financing and other deferred costs,
       net of accumulated amortization of
       $8,719 in 1999 and $8,259 in 1998               12,678            12,088
                                                   -----------      ------------
   Total Other Assets                                  39,936            29,221
                                                   -----------      ------------
       Total Assets                                $  342,399       $   339,055
                                                   ===========      ============


 LIABILITIES, MINORITY INTERESTS AND
   STOCKHOLDERS' EQUITY
   Current Liabilities:
   Trade accounts payable                          $    4,207       $     3,939
   Real estate taxes payable                            2,889             2,848
   Accrued interest payable                             5,802             3,382
   Other accounts payable and accrued expenses          8,423             8,300
   Current portion of long-term debt                   11,119            40,199
                                                   -----------      ------------
   Total Current Liabilities                           32,440            58,668

   Long-term debt, less current portion:
   Mortgage and other notes payable                   212,240           178,846
   12% Senior Subordinated Notes, net of
     unamortized discount of $2,795 in 1999
     and $2,894 in 1998                                77,205            77,106
                                                   -----------      ------------
   Total Long-term debt,
     excluding current portion                        289,445           255,952
                                                   -----------      ------------
   Total Liabilities                                  321,885           314,620
                                                   -----------      ------------

   Minority Interests                                   1,676             1,689
   Stockholders' equity:
   Common stock, $.01 par value,
     1,500,000 shares authorized; 800,000
     shares issued and outstanding                          8                 8
   Additional paid-in capital                          15,294            15,294
   Retained earnings                                    3,536             7,444
                                                   -----------      ------------
   Total stockholders' equity                          18,838            22,746
                                                   -----------      ------------
     Total liabilities and Stockholders' Equity    $  342,399       $   339,055
                                                   ===========      ============




   See accompanying  notes to condensed  consolidated  financial statements.


<PAGE>

                     MOA HOSPITALITY, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   (Unaudited, in thousands except share data)


                                                    Three Months Ended
                                                           March 31
                                                -----------------------------
                                                    1999             1998
                                                ------------     ------------

 Revenues:
   Motel operating revenues                     $    21,263      $    25,438
   Other revenues                                       469              221
                                                ------------     ------------
 Total revenues                                      21,732           25,659
 Costs and expenses:
   Motel operating expenses                          13,380           14,936
   Marketing and royalty fees                         1,435            1,800
   General and administrative                         2,785            2,499
   Depreciation and amortization                      3,611            4,048
                                                ------------     ------------
 Total direct expenses                               21,211           23,283
                                                ------------     ------------
 Net operating income                                   521            2,376
 Interest expense                                     7,306            7,616
                                                ------------     ------------
 Loss from operations                                (6,785)          (5,240)
 Minority interests                                      13               18
 Gain on sale of properties                             374              453
                                                ------------     ------------
 Loss before income taxes                            (6,398)          (4,769)
 Income tax expense (benefit)                        (2,490)          (1,856)
                                                ------------     ------------
 Net loss                                       $    (3,908)     $    (2,913)
                                                ============     ============


 Net loss per common share (basic and diluted)  $     (4.89)     $     (3.64)
                                                ============     ============

 Weighted average number of
   common shares outstanding                        800,000          800,000
                                                ============     ============





     See accompanying notes to condensed consolidated financial statements.
<PAGE>

                     MOA HOSPITALITY, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited, in thousands)

<TABLE>
<CAPTION>

                                                                            Three Months Ended
                                                                                March 31
                                                                       ---------------------------
                                                                           1999            1998
                                                                       -----------     -----------
<S>                                                                    <C>             <C>
Cash flows provided by (used in) operating activities:
  Net income (loss)                                                    $   (3,908)     $   (2,913)
  Adjustments to reconcile net income (loss) to cash provided by
    operating activities:
  Depreciation, amortization and accretion of
    discount on notes                                                       3,706           4,145
  Minority interests of others in net income (loss)
    from operations                                                           (13)            (18)
  Deferred income taxes                                                       (24)            241
  Gain on sale of properties                                                 (374)           (453)
  Change in assets and liabilities:
  (Increase) decrease in assets:
     Accounts receivable                                                     (510)           (909)
     Operating supplies, prepaid expenses,
       deposits and other assets                                           (6,588)         (3,066)
   Increase (decrease) in liabilities:
     Accounts payable and accrued expenses                                    378             208
     Accrued interest payable                                               2,420           2,470
                                                                       -----------    ------------
Net cash used in operating activities                                      (4,913)           (295)
Cash flows provided by (used in) investing activities:
  Acquisition and development of investment properties                        (16)         (2,567)
  Refurbishment of investment properties                                   (2,306)         (1,635)
  Net proceeds from sale of investment properties                           2,467           1,439
  Cash restricted for refurbishment of properties                           1,426             (61)
  Collections on mortgage and other notes receivable                          106           2,049
                                                                       -----------     -----------
Net cash provided by (used in) investing activities                         1,677            (775)
Cash flows provided by (used in) financing activities:
  Proceeds from notes payable                                              36,880           1,134
  Repayment of notes payable                                              (32,566)         (3,609)
  Distributions to minority interests                                           -             (78)
  Deferred financing costs                                                 (1,070)            (27)
                                                                       -----------     -----------
Net cash provided by (used in) financing activities                         3,244          (2,580)
                                                                       -----------     -----------
Net increase (decrease) in cash and cash equivalents                            8          (3,650)
Cash and cash equivalents at beginning of period                           19,582          13,032
                                                                       -----------     -----------
Cash and cash equivalents at end of period                             $   19,590      $    9,382
                                                                       ===========     ===========

Supplementary disclosure of cash flow information:
       Cash paid during the period for interest                        $    4,780      $    5,146
                                                                       ===========     ===========
       Cash paid (net of refunds received) during the
             period for income taxes                                   $     (268)     $      (29)
                                                                       ===========     ===========
</TABLE>

     See accompanying notes to condensed consolidated financial statements.


<PAGE>


                    MOA HOSPITALITY, INC. AND SUBSIDIARIES

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

                                 March 31, 1999


1.  Basis of Presentation

         The accompanying  unaudited  interim condensed  consolidated  financial
statements have been prepared in accordance with generally  accepted  accounting
principles for interim  financial  information and with the instructions to Form
10-Q and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles for complete financial statements. In the opinion of management,  all
adjustments   (consisting  only  of  normal  recurring  adjustments)  considered
necessary for a fair presentation have been included.  Operating results for the
three-month  period ended March 31, 1999 are not  necessarily  indicative of the
results that may be expected for the year ended  December 31, 1999.  For further
information,  refer  to the  consolidated  financial  statements  and  footnotes
thereto included in MOA  Hospitality,  Inc. and  Subsidiaries'  Annual Report on
Form  10-K for the year  ended  December  31,  1998.  The  terms  "MOA"  and the
"Company" mean MOA Hospitality, Inc. and its subsidiaries.

2.  Divestitures

         In January through March 1999, the Company leased five of its operating
properties to third party operators.

         In January  through  March 1999,  the Company sold three of its lodging
facilities for approximately $8.2 million consisting of $2.7 million of cash and
$5.5 million in notes receivable.  One property was sold for a gain of $374,000.
The other two  properties  were sold at a loss in the amount of $3,656,000  that
was recorded at December 31, 1998 as part of the overall  $9,300,000  impairment
loss.
         In April through June 16, 1999, the Company leased three of its lodging
facilities to third party operators.

         In April through June 16, 1999, the Company sold three of its lodging
facilities for approximately $8.6 million consisting of $4.3 million of cash and
$4.3 million in notes receivable.

3.       Mortgage and Other Notes Payable

         In January 1999, the Company repaid mortgage notes with an outstanding
balance of $17.2  million at December  31,1998  with the proceeds of a new $13.5
million  loan  and the  balance  with  cash.  The new  loan  is  secured  by six
properties and bears interest at LIBOR plus 3.25 percentage  points.  During the
initial  year of the  loan,  all  excess  cash  flow  (as  defined  in the  loan
agreement) from the properties is to be applied toward  principal  amortization.
Thereafter,  principal  amortization is based on a twenty-year  schedule plus an
additional  $250,000 of annual  principal  amortization  paid monthly.  The loan
matures in January 2004. In March 1999, the Company borrowed $23.4 million,  the
proceeds of which were  utilized to pay-off loans with  outstanding  balances of
$14.0 million at December 31, 1998. The balance of the net proceeds was retained
for working capital  purposes.  The loan was initially secured by ten properties
and five mortgage notes  receivable.  The interest rate pertaining to the amount
of the loan  allocated to the  properties is the Prime Rate plus 0.5  percentage
points and the interest rate  pertaining to the amount of the loan  allocated to
the mortgage notes receivable is the Prime rate plus 1.25 percentage points. The
loan requires  principal payments based on a twenty-year  amortization  schedule
with the  outstanding  balance of the loan due in April 2006.  Provided  certain
conditions  are met, the Company has the ability to sell  properties  secured by
the loan in partial  exchange for a mortgage note  receivable that would than be
pledged as  collateral  under the loan with the  interest  rate  adjusted to the
Prime rate plus 1.25 percentage points.

<PAGE>



           The  Company's  principal  repayment  obligations,  reflective of the
above  mentioned  debt  transaction,  as of March 31, 1999 is $8,340,000 for the
remainder of fiscal 1999; $6,107,000 for 2000 and $26,979,000 for 2001.

           The  Company  has  agreed  in  principle  with a bank  holding a $3.9
million mortgage note as of March 31, 1999, that by the term of the note matured
May 31, 1999, to extend such maturity until July 15, 1999.

           The  Company  believes  it has or will be  able  to  obtain  adequate
resources to meet its near-term maturing debt and other  obligations.  Although,
the deteriorating  trend in operating results noted above could adversely affect
the Company's  ability to meet its maturing debt  obligations  in 2004 and 2005,
including the maturity of the $80 million 12% Senior Subordinated Notes in 2004.


4.       Income Taxes

         Income tax expense differs from the amounts computed by applying the
U.S. federal income tax rate of 34% to income before income taxes principally as
a result of state income taxes.

5.       Contingencies

         During  1997,  the  Company  and  certain of its  subsidiaries
commenced legal actions against ShoLodge  Franchise Systems,  Inc.  ("ShoLodge")
the franchisor of Shoney's Inns. The Company among other things has claimed that
ShoLodge  has   breached  its   contractual   obligations   and  made   material
misrepresentations  to  MOA  prior  to MOA or  its  subsidiaries  acquiring  any
Shoney's  Inns.  Commencing  in  February  1998,  through  May 1998 the  Company
disaffiliated  each of its fourteen  Shoney's Inns from ShoLodge by removing the
sign and other identifying marks. At the time of such disaffiliation, MOA or its
subsidiaries ceased remitting  franchise fees to ShoLodge.  ShoLodge has filed a
counter claim against MOA and certain of its subsidiaries  claiming a failure to
renovate the properties and failure to pay franchise fees. The Company  believes
that it will ultimately prevail in its claims against ShoLodge.

                  The Company is involved in various other legal  proceedings
arising in the ordinary  course of  business.  The Company does not believe that
any of these  actions,  either  individually  or in the  aggregate,  will have a
material  adverse  effect on the  Company's  business,  results of operations or
financial condition.

                  The Company remains contingently liable on the $2.3 million
note; in the event the purchaser does not perform under its obligations.




<PAGE>



6.       Segments

         During the fourth  quarter of 1998,  the Company  adopted the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No 131,
"Disclosures About Segments of an Enterprise and Related Information"("Statement
No.  131").  Statement  No. 131  establishes  standards  for the manner in which
public business  enterprises report information  regarding  reportable operating
segments.  The  adoption  of  Statement  No. 131 did not  affect the  results of
operations or financial position of the Company.

         As of  March  31,  1999  the  Company,  directly  and  through
subsidiaries, owned 132 lodging facilities in 38 states. The Company owns a 100%
interest in all but two of its  properties  and also operates all but ten of its
motels,  which are leased to third party tenants  pursuant to operating  leases.
The Company separately evaluates the performance of each of its motels. However,
because each of the motels has similar economic characteristics, the motels have
been aggregated into a single dominant motel segment as indicated below.

                                                         Three Months Ended
                                                              March 31
                                                    ----------------------------
                                                      1999               1998
                                                    ----------------------------
Motel operations:
  Motel operating revenue:
    Room revenues                                   $ 19,705           $ 23,504
    Ancillary motel revenues                           1,558              1,934
                                                    ---------          ---------
       Total motel operating revenues                 21,263             25,438
  Motel costs and expenses:
    Motel operating expenses                          13,380             14,936
    Marketing and royalty fees                         1,435              1,800
    Depreciation and amortization                      3,205              3,574
                                                    ---------          ---------
       Total motel direct expenses                    18,020             20,310
                                                    ---------          ---------
                                                       3,243              5,128
Corporate Operations
  Other revenues                                         469                221
  General and administrative expenses:
    Management Company Operations                      1,639              1,243
    Construction/Acquisition and Divestiture             363                321
    Other general and administrative                     783                935
                                                    ---------          ---------
      Total general and administrative expenses        2,785              2,499
Depreciation and amortization                            406                474
                                                    ---------          ---------
                                                      (2,722)            (2,752)
                                                    ---------          ---------
Net operating income                                     521              2,376
  Interest expense                                     7,306              7,616
                                                    ---------          ---------
Loss from operations                                  (6,785)            (5,240)
  Minority interests                                      13                 18
  Gain on sale of properties                             374                453
                                                    ---------          ---------
Loss before income taxes                              (6,398)            (4,769)
  Income tax expense (benefit)                        (2,490)            (1,856)
                                                    ---------          ---------
Net Loss                                            $ (3,908)          $ (2,913)
                                                    =========          =========






<PAGE>





Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


CERTAIN  STATEMENTS UNDER THE CAPTION  "MANAGEMENT'S  DISCUSSION AND ANALYSIS OF
FINANCIAL  CONDITION  AND RESULTS OF  OPERATIONS,"  CONSTITUTE  "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE  SECURITIES  LITIGATION REFORM ACT
OF 1995  AND AS  SUCH,  SPEAK  ONLY AS OF THE DATE  MADE.  SUCH  FORWARD-LOOKING
STATEMENTS  INVOLVE KNOWN AND UNKNOWN RISKS AND  UNCERTAINTIES AND OTHER FACTORS
WHICH MAY CAUSE THE ACTUAL  RESULTS,  PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY
TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,  PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING  STATEMENTS.  SUCH FACTORS INCLUDE,
AMONG  OTHERS,  THE  FOLLOWING:  THE  COMPANY'S  ABILITY  TO  OBTAIN  FINANCING,
COMPETITION,  INTEREST  RATE  FLUCTUATIONS,  OR GENERAL  BUSINESS  AND  ECONOMIC
CONDITIONS.

THIS  DISCUSSION  SHOULD  BE READ IN  CONJUNCTION  WITH  THE  INTERIM  CONDENSED
CONSOLIDATED  HISTORICAL  FINANCIAL  STATEMENTS  OF THE  COMPANY  AND THE  NOTES
THERETO INCLUDED ELSEWHERE HEREIN. THE SUPPLEMENTAL HISTORICAL OPERATING RESULTS
PRESENTED  BELOW FOR THE THREE  MONTHS  ENDED  MARCH 31, 1999 AND 1998 HAVE BEEN
PREPARED  ON THE SAME BASIS AS THE  INTERIM  CONDENSED  CONSOLIDATED  HISTORICAL
FINANCIAL STATEMENTS AND, IN THE OPINION OF THE COMPANY, INCLUDE ALL ADJUSTMENTS
(CONSISTING  ONLY OF NORMAL RECURRING  ADJUSTMENTS)  NECESSARY TO PRESENT FAIRLY
THE INFORMATION SET FORTH THEREIN.

General

         MOA operates  principally in the economy limited service segment of the
lodging industry.  As a result, its average room rates tend to be lower than the
average  room rates of full  service  lodging  facilities.  However,  due to the
limited  nature of the public space and ancillary  services  provided by limited
service  motels,  the  Company's  expenses  tend to be lower  than those of full
service lodging facilities. The profitability of the lodging industry in general
is  significantly  dependent upon room rental rates and occupancy  rates. Due to
the fixed nature of a relatively high portion of the Company's expenses, changes
in either room rates or  occupancy  rates result in  significant  changes in the
operating profit of the Company's motels.



<PAGE>
Three Months Ended March 31, 1999 Compared to the Three Months Ended
March 31, 1998

   The following chart presents certain historical operating results and
  statistics  discussed  herein and is being provided as a supplement to the
      condensed consolidated financial statements presented elsewhere herein.

<TABLE>
<CAPTION>
                                                               Supplemental Operating Results and Statistics
                                                    --------------------------------------------------------------------
                                                                                (unaudited)
                                                                         Three Months Ended March 31
                                                     --------------------------------------------------------------------
                                                         Motels Owned          Acquisitions/
                                                         Both Periods          Divestitures            Consolidated
                                                     --------------------  --------------------  ----------------------
                                                        1999       1998       1999       1998       1999         1998
                                                     ---------  ---------  ---------  ---------  ----------  ----------
                                                                     (dollars in thousands, except Other data)
<S>                                                  <C>        <C>        <C>        <C>        <C>         <C>
 Motel operations:
   Motel operating revenues:

      Room revenues                                  $ 18,735   $ 18,963   $    970   $  4,541   $  19,705   $  23,504
      Ancillary motel revenues                          1,503      1,400         55        534       1,558       1,934
                                                     ---------  ---------  ---------  ---------  ----------  ----------
   Total motel operating revenues                      20,238     20,363      1,025      5,075      21,263      25,438
      Motel costs and expenses:
      Motel operating expenses                         12,513     11,704        867      3,232      13,380      14,936
      Marketing and royalty fees                        1,339      1,469         96        331       1,435       1,800
      Depreciation and amortization                     2,857      2,893        348        681       3,205       3,574
                                                     ---------  ---------  ---------  ---------  ----------  ----------
            Total motel direct expenses                16,709     16,066      1,311      4,244      18,020      20,310
                                                     ---------  ---------  ---------  ---------  ----------  ----------
                                                     $  3,529   $  4,297   $   (286)  $    831       3,243       5,128
                                                     =========  =========  =========  =========

 Corporate operations:
   Other revenues, net                                                                                 469         221
   General and administrative expenses:
   Management Company Operations                                                                     1,639       1,243
   Construction/Acquisition
     and Divestiture                                                                                   363         321
   Other general and administrative                                                                    783         935
                                                                                                 ----------  ----------
     Total general and administrative expenses                                                       2,785       2,499
   Depreciation and amortization                                                                       406         474
                                                                                                 ----------  ----------
                                                                                                    (2,722)     (2,752)
                                                                                                 ----------  ----------
 Net operating income                                                                            $     521   $   2,376
                                                                                                 ==========  ==========

 Other data:
 Number of motels at period end (5)                       117        117          5         20         122         137
 Number of rooms at period end (5)                      9,404      9,403        325      1,932       9,729      11,335
 Occupancy percentage (5)                               55.62%     55.74%     44.77%     55.32%      55.04%      55.61%
 ADR (1) (5)                                         $  39.80   $  40.21   $  41.72   $  47.21   $   39.85   $   41.37
 REVPAR (2) (5)                                      $  23.91   $  24.07   $  19.72   $  29.19   $   20.82   $   24.90
 Net operating income margin (3)                                                                      2.40%       9.26%
 Net motel revenue margin (4) (5)                       34.09%     37.92%      6.39%     33.30%      32.72%      37.02%
</TABLE>

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

 (1) ADR  represents  room  revenues  divided by the total  number of rooms
     occupied.

 (2) REVPAR represents total motel operating  revenues divided by the total
     number of rooms available.

 (3) Net operating income margin represents net operating income divided
     by total motel operating revenues plus corporate other revenues.

 (4) Net motel revenue margin represents total motel operating  revenues
     less motel  operating  expenses  and  marketing  and royalty  fees,
     divided by motel room revenues.

 (5) At March 31, 1999 and for the three  months  then  ended,  excludes
     amounts  related to the ten motels  which are leased to third party
     tenants.




<PAGE>


         Total revenues consist principally of motel operating  revenues.  Motel
operating  revenues are derived from room rentals and ancillary  motel  revenues
such as charges to guests for food and beverage service, long distance telephone
calls,  fax  machine  use and from  vending  machines.  Other  revenues  include
interest income,  net lease income,  distributions  of partnership  interests in
excess of the  Company's  basis in such  partnerships  and  other  miscellaneous
income. Total revenues decreased to $21,732,000 for the three months ended March
31, 1999 from  $25,659,000 for the three months ended March 31, 1998, a decrease
of $3,927,000 or 15.3%.

         Motel  revenues  decreased  to  $21,263,000  for the three months ended
March 31, 1999 from  $25,438,000  for the three  months  ended March 31, 1998, a
decrease of $4,175,000 or 16.4%. The motel revenues for motels owned during both
periods  decreased  approximately  $125,000 and revenues for motels acquired and
divested  since  January 1, 1998  decreased by  $4,050,000.  Motel  revenues for
motels owned during both periods  decreased 0.6%. The decrease in motel revenues
for motels owned during both periods was attributable  principally to a decrease
in the average  daily rate  ("ADR").  The ADR for the motels  owned  during both
periods  decreased  to $39.80 for the three  months  ended  March 31,  1999 from
$40.21 for the three  months  ended March 31, 1998, a decrease of $0.41 or 1.0%.
The decrease in ADR is principally a result of management's  efforts to mitigate
the decline in occupancy that has occurred during the first quarter for the past
several years. The first quarter traditionally  represents a slow period for the
Company's  motels and accordingly most affected by the increase in new supply of
competing motels. The occupancy  percentage  decreased from 55.74% for the three
months ended March 31, 1998 to 55.62% for the three months ended March 31, 1999.
Revenue per  available  room  ("REVPAR")  for motels  owned  during both periods
decreased  to $23.91 for the three  months  ended March 31, 1999 from $24.07 for
the three months ended March 31, 1998, a decrease of $0.16 or 0.7%. The acquired
and divested motels had an occupancy  percentage of 44.77%, an ADR of $41.72 and
REVPAR of $19.72 for the period, which they were owned by the Company in 1999.

         Motel operating expenses include payroll and related costs,  utilities,
repairs and maintenance,  property taxes, insurance,  linens and other operating
supplies. Motel operating expenses decreased to $13,380,000 for the three months
ended March 31, 1999 from $14,936,000 for the three months ended March 31, 1998,
a net  decrease of  $1,556,000  or 10.4%.  Motel  operating  expenses for motels
acquired and divested  since January 1, 1998 decreased to $867,000 for the three
months ended March 31, 1999 from $3,232,000 for the three months ended March 31,
1998, a decrease of $2,365,000 or 73.2%. The decrease was partially offset by an
increase of $809,000 or 6.9% in the costs of  operating  the motels owned during
both periods.  The cost of operating motels owned during both periods  increased
to $12,513,000  for the three months ended March 31, 1999 from  $11,704,000  for
the three  months  ended March 31,  1998.  The  increase in  operating  costs is
principally  due to increased labor and related costs and an increase in repairs
and maintenance expenditures.  Motel operating expenses as a percentage of motel
revenues increased to 62.9% for the three months ended March 31, 1999 from 58.7%
for the three  months  ended  March 31,  1998.  Motel  operating  expenses  as a
percentage of motel  revenues for the motels owned in both periods  increased to
61.8% for the three  months ended March 31, 1999 from 57.5% for the three months
ended March 31, 1998.

         Marketing and royalty fees include media advertising,  billboard rental
expense,  advertising fund contributions and royalty charges paid to franchisors
and other related  marketing  expenses.  Marketing and royalty fees decreased to
$1,435,000  for the three  months ended March 31, 1999 from  $1,800,000  for the
three  months  ended  March 31,  1998,  a decrease  of  $365,000  or 20.3%.  The
marketing  and royalty fees for motels  owned  during both periods  decreased to
$1,339,000  for the three  months ended March 31, 1999 from  $1,469,000  for the
three  months  ended March 31,  1998,  a decrease  of $130,000 or 8.8%.  For the
motels owned during both periods,  marketing and royalty fees as a percentage of
room  revenues  decreased to 7.1% for the three months ended March 31, 1999 from
7.7% for the three months ended March 31,  1998.  The decrease in marketing  and
royalty fees for motels owned in both periods are principally due to a reduction
in franchise  fees.  Franchise  fees declined due a reduction in franchise  fees
paid to ShoLodge Franchise Systems,  Inc. with respect to the Company's fourteen
former  Shoney's  Inns.  During the period  February 1998 through May 1998,  the
Company  disaffiliated all of its Shoney's Inns from ShoLodge Franchise Systems,
Inc. and ceased  payment of franchise  fees at such time. On an annual basis the
Company  historically had paid  approximately  $650,000 of franchise fees on its
fourteen  Shoney's  Inns.  Marketing  and royalty  fees for motels  acquired and
divested  since January 1, 1998  decreased to $96,000 for the three months ended
March 31, 1999 from $331,000 for the three months ended March 31, 1998.
<PAGE>

         Corporate  general and  administrative  expenses are  segregated by the
Company   into   three   separate   areas:    Management   Company   Operations,
Construction/Acquisition  and  Divestiture  Division and Other.  Included in the
Management Company Operations,  which is the division  responsible for the motel
operations,  are the costs  associated  with  training,  marketing,  purchasing,
administrative  support,  property related legal and accounting costs. The major
components of these costs are salaries, wages and related expenses, travel, rent
and other administrative  expenses. The general and administrative  expenses for
the Management Company Operations increased $396,000 to $1,639,000 for the three
months ended March 31, 1999 from $1,243,000 for the three months ended March 31,
1998, an increase of 31.9%. The general and administrative  expenses  associated
with  Construction/Acquisition  and Divestiture  Division decreased $42,000 from
$321,000  for the three  months  ended March 31, 1998 to $363,000  for the three
months ended March 31, 1999. Other General and Administrative expenses decreased
$152,000 to $783,000 for the three months ended March 31, 1999 from $935,000 for
the three months ended March 31, 1998. As a percentage of total motel  operating
revenues,  Management Company Operations general and administrative expenses was
7.8% for the three  months  ended March 31,  1999 and 4.9% for the three  months
ended March 31, 1998.

         Depreciation  and  amortization  decreased to $3,611,000  for the three
months ended March 31, 1999 from $4,048,000 for the three months ended March 31,
1998,  a net  decrease of $437,000 or 10.8%.  Approximately  $333,000 of the net
decrease related to the motels acquired and divested since January 1, 1998.

         Net operating  income  decreased to $521,000 for the three months ended
March 31, 1999 from  $2,376,000  for the three  months  ended March 31,  1998, a
decrease of $1,855,000 or 78.1%. The decrease in net operating income included a
decrease  of  $2,254,000  in net  motel  revenues  (motel  revenues  less  motel
operating  expenses and marketing and royalty fees). Of the $2,254,000  decrease
in net motel  revenues,  $804,000  resulted  from the motels  owned  during both
periods or a decrease  of 11.2%.  Net motel  revenues  for motels  acquired  and
divested since January 1, 1998 decreased  $1,450,000.  Net operating income as a
percent of total  revenues was 2.4% for the three months ended March 31, 1999 as
compared to 9.3% for the three months ended March 31, 1998.

         Interest  expense  decreased to  $7,306,000  for the three months ended
March 31, 1999 from  $7,616,000  for the three  months  ended March 31,  1998, a
decrease of $310,000.  The  decrease in interest  expense is  reflective  of the
lower average amount of outstanding  borrowings during the first quarter of 1999
as compared to the first quarter 1998.

         Net loss  increased to $3,908,000  for the three months ended March 31,
1999 from  $2,913,000 for the three months ended March 31, 1998.
<PAGE>

Liquidity and Capital Resources

The  Company's  primary  uses of its capital  resources  include  debt  service,
capital  expenditures and working capital.  In addition on a discretionary basis
the Company  utilizes its capital  resources for the development and acquisition
of motel properties.

The  Company's  debt  service  requirements  consist of the  obligation  to make
interest and principal payments on its outstanding indebtedness. In January 1999
the Company repaid  mortgage notes with an outstanding  balance of $17.2 million
as of December  31, 1998 with the  proceeds of a new $13.5  million loan and the
balance with cash.  The new loan is secured by six properties and bears interest
at LIBOR plus 3.25 percentage  points.  During the initial year of the loan, all
excess cash flow (as defined in the loan agreement) from the properties is to be
applied toward principal  amortization.  Thereafter,  principal  amortization is
based on a twenty-year  schedule plus an additional $250,000 of annual principal
amortization paid monthly.  The loan matures in January 2004. In March 1999, the
Company  borrowed $23.4 million,  the proceeds of which were utilized to pay-off
loans with  outstanding  balances of $14.0 million as of December 31, 1998.  The
balance of the net proceeds was retained for working capital purposes.  The loan
was initially secured by ten properties and five mortgage notes receivable.  The
interest rate  pertaining to the amount of the loan  allocated to the properties
is the Prime Rate plus 0.5 percentage  point and the interest rate pertaining to
the amount of the loan allocated to the mortgage  notes  receivable is the Prime
rate plus 1.25 percentage  points. The loan requires principal payments based on
a twenty-year amortization schedule with the outstanding balance of the loan due
in April 2006.  Provided certain conditions are met, the Company has the ability
to sell properties  secured by the loan in partial  exchange for a mortgage note
receivable  that would than be  pledged  as  collateral  under the loan with the
interest  rate  adjusted  to the Prime  rate plus 1.25  percentage  points.  The
Company's  principal  repayment  obligations,  reflective  of  the  transactions
mentioned  above, as of March 31, 1999 is $8,340,000 for the remainder of fiscal
1999; $6,107,000 for 2000 and $26,979,000 for 2001.

The Company has agreed in principle with a bank holding a $3.9 million  mortgage
note as of March 31,  1999,  that by the terms of the note matured May 31, 1999,
to extend such  maturity  until July 15,  1999.  As of June 16, 1999 the Company
does not have a commitment for the refinancing of this debt.

The Company believes it has or will be able to obtain adequate resources to meet
its near-term maturing debt and other obligations.  Although,  the deteriorating
trend in operating  results  noted above could  adversely  affect the  Company's
ability to meet its maturing debt  obligations  in 2004 and 2005,  including the
maturity of the $80 million 12% Senior Subordinated Notes in 2004.

The Company's  capital  expenditure  requirements  principally  include  capital
improvements and refurbishment of its lodging  facilities as part of its ongoing
operating  strategy to provide  well-maintained  facilities.  The  Company  made
capital  expenditures  (exclusive of acquisitions and development of properties)
of $2,306,000 and $1,635,000 for the three months ended March 31, 1999 and 1998,
respectively.  In addition,  as of March 31,  1999,  the Company had $777,000 of
cash restricted for future refurbishment of motel properties, in accordance with
certain debt  agreements.  Management is not aware of any unusual required level
of future capital expenditures necessary to maintain its existing properties.

For the three months ended March 31, 1999, cash and cash  equivalents  increased
$8,000.  This increase  consisted of  $1,667,000 of funds  provided by investing
activities  and  $3,244,000  of  funds  provided  by  financing  activities  and
$4,913,000 of funds used in operations.  Net investing  activities of $1,667,000
include:  $16,000 of cash utilized for motel development and $2,306,000 expended
on refurbishment of existing  properties,  offset by $2,573,000 of cash provided
from the sale of investment  properties  and  collections  on mortgage and other
notes  receivable  and  a  change  in  cash  restricted  for   refurbishment  of
$1,426,000.  Cash used in financing  activities  includes:  $32,566,000  of cash
utilized  to repay  indebtedness;  and  $1,070,000  of cash  used  for  deferred
financing  costs and other items offset by $36,880,000  from proceeds from notes
payable.
<PAGE>

Impact of Year 2000

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.

The Company replaced its primary  financial  accounting system in 1998 at a cost
of approximately $400,000. The new system is year 2000 compliant. The Company is
continuing to evaluate various  sub-systems  that are in place,  including those
utilized  to process  credit card  transactions,  to  determine  their year 2000
readiness.  The Company has also made inquires of its  significant  vendors upon
which it relies and believes they are sufficiently  prepared to handle year 2000
issues so as not to cause any  interruption  to the  Company's  operations.  The
Company,  on an on-going basis,  evaluates its contingency plans with respect to
potential  year 2000  issues.  The Company  does not  anticipate  incurring  any
additional significant expenditures with respect to the year 2000 situation.




<PAGE>


                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

         The  Company is involved in various  legal  proceedings  arising in the
ordinary  course of  business.  The Company  does not believe  that any of these
actions,  either individually or in the aggregate,  will have a material adverse
effect on the Company's business, results of operations or financial condition.
See Note 5 of the Notes to the Condensed Consolidated Financial Statements.

Item 2.  Changes in Securities

         Not Applicable

Item 3.  Defaults upon Senior Securities

         Not Applicable

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

         Not Applicable

Item 5.  Other Information

         Not Applicable

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits:

         Not Applicable

         (b) Reports on Form 8-K:

         Not Applicable


<PAGE>



                                                     SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                             MOA HOSPITALITY, INC.




June 16, 1999                       By:            /s/  Kurt M. Mueller
                                    ---------------------------------------
                                        Kurt M. Mueller
                                        Chief Financial Officer


June 16, 1999                        By:           /s/   Blane P. Evans
                                     --------------------------------------
                                        Blane P. Evans
                                        Vice President, Secretary and Treasurer