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  September 30, 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
November 12, 1999:  800,000


<PAGE>





                INDEX TO FORM 10-Q

                                                                         Page
Part I          Financial Information

Item 1.         Financial Statements

                Condensed consolidated balance sheets -                    2
                September 30, 1999(unaudited) and December 31, 1998.

                Condensed consolidated statements of operations -          3
                Three months ended September 30, 1999 and 1998
                (unaudited); Nine months ended September 30, 1999
                and 1998 (unaudited).

                Condensed consolidated statements of cash flows -          4
                Nine months ended September 30, 1999 and 1998
                (unaudited).

                Notes to condensed consolidated financial statements -     5
                September 30, 1999 (unaudited).


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

                General                                                    9

                Results of Operations                                     10

                Liquidity and Capital Resources                           17


Part II         Other Information

Item 1.         Legal Proceedings                                         19

Item 2.         Changes in Securities                                     19

Item 3.         Defaults upon Senior Securities                           19

Item 4.         Submission of Matters to a Vote of Security Holders       19

Item 5.         Other Information                                         19

Item 6.         Exhibits and Reports on Form 8-K                          19


                Signatures                                                20



<PAGE>


                      PART I - FINANCIAL INFORMATION

Item 1.             Financial Statements

             MOA HOSPITALITY, INC. AND SUBSIDIARIES

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


                                                   September 30,    December 31,
                                                       1999              1998
                                                    -----------      -----------
                                                    (Unaudited)
 ASSETS
 Current Assets:
  Cash and cash equivalents                         $    8,447       $   19,582
  Accounts receivable from property operations           2,542            2,015
  Operating supplies and prepaid expenses                1,666            2,325
  Current portion of mortgage and notes receivable       3,583            2,139
                                                    -----------      -----------
  Total Current Assets                                  16,238           26,061
 Investment property:
     Operating properties,
     net of accumulated depreciation                   265,692          279,944
     Land held for development                           5,249            3,829
                                                    -----------      -----------
  Total investment property                            270,941          283,773
  Other Assets:
  Deposits and other assets                             21,999            5,507
  Mortgage and other notes receivable,
  less current portion                                  18,708           11,626
  Financing and other deferred costs,
  net of accumulated amortization of
  $9,568 in 1999 and $8,259 in 1998                     13,161           12,088
                                                    -----------      -----------
  Total Other Assets                                    53,868           29,221
                                                    -----------      -----------
     Total Assets                                   $  341,047       $  339,055
                                                    ===========      ===========


 LIABILITIES, MINORITY INTERESTS AND
  STOCKHOLDERS' EQUITY
  Current Liabilities:
   Trade accounts payable                           $    2,155       $    3,939
   Real estate taxes payable                             2,964            2,848
   Accrued interest payable                              6,030            3,382
   Other accounts payable and accrued expenses          13,352            8,300
   Current portion of long-term debt                    11,152           40,199
                                                    -----------      -----------
   Total Current Liabilities                            35,653           58,668

   Long-term debt, less current portion:
   Mortgage and other notes payable                    207,299          178,846
   12% Senior Subordinated Notes, net of
   unamortized discount of $2,586 in 1999
    and $2,894 in 1998                                  77,414           77,106
                                                    -----------      -----------
   Total Long-term debt, excluding current portion     284,713          255,952
                                                    -----------      -----------
   Total Liabilities                                   320,366          314,620
                                                    -----------      -----------

   Minority Interests                                    1,705            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                                  3,674            7,444
                                                    -----------      -----------
   Total Stockholders' Equity                           18,976           22,746
                                                    -----------      -----------
       Total Liabilities and Stockholders' Equity   $  341,047       $  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)

<TABLE>
<CAPTION>

                                              Three Months Ended              Nine Months Ended
                                                  September 30                  September 30
                                          --------------------------     ---------------------------
                                             1999            1998            1999            1998
                                          ----------     -----------     -----------     -----------
<S>                                       <C>            <C>             <C>             <C>
Revenues:
  Motel operating revenues                $  28,330      $   35,272      $   75,774      $   92,353
  Other revenues                              1,237             357           2,788             810
                                          ----------     -----------     -----------     -----------
Total revenues                               29,567          35,629          78,562          93,163
Costs and expenses:
  Motel operating expenses                   13,076          16,152          40,601          46,769
  Marketing and royalty fees                  1,943           2,132           5,177           5,942
  General and administrative                  1,975           2,642           8,234           7,516
  Depreciation and amortization               2,982           4,194          10,199          12,280
                                          ----------     -----------     -----------     -----------
Total direct expenses                        19,976          25,120          64,211          72,507
                                          ----------     -----------     -----------     -----------
Net operating income                          9,591          10,509          14,351          20,656
Interest expense                              7,627           7,705          22,330          23,120
                                          ----------     -----------     -----------     -----------
Income (loss) from operations                 1,964           2,804          (7,979)         (2,464)
Minority interests                              (11)            (72)            (16)           (112)
Gain on sale of properties                      358           9,658           2,010          24,532
                                          ----------     -----------     -----------     -----------
Income (loss) before income taxes             2,311          12,390          (5,985)         21,956
Income tax expense (benefit)                    932           4,822          (2,215)          8,545
                                          ----------     -----------     -----------     -----------
Net income (loss)                         $   1,379      $    7,568      $   (3,770)     $   13,411
                                          ==========     ===========     ===========     ===========


Net income (loss) per common share
 (basic and diluted)                      $    1.72      $     9.46      $    (4.71)     $    16.76
                                          ==========     ===========     ===========     ===========

Weighted average number of
  common shares outstanding                 800,000         800,000         800,000         800,000
                                          ==========     ===========     ===========     ===========
</TABLE>


        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>
                                                                   Nine Months Ended
                                                                    September 30
                                                           ---------------------------
                                                               1999            1998
                                                           ------------   ------------
<S>                                                        <C>            <C>
Cash flows provided by (used in) operating activities:
 Net income (loss)                                         $    (3,770)   $    13,411
 Adjustments to reconcile net income (loss) to
  cash provided by operating activities:
  Depreciation, amortization and accretion of
    discount on notes                                           10,463         12,555
  Minority interests of others in net income (loss)
  from operations                                                   16            112
  Deferred income taxes                                          1,302             64
  Gain on sale of properties                                    (2,010)       (24,532)
 Change in assets and liabilities:
  (Increase) decrease in assets:
    Accounts receivable                                           (531)          (624)
    Operating supplies, prepaid expenses,
        deposits and other assets                              (18,714)         6,988
   Increase (decrease) in liabilities:
    Accounts payable and accrued expenses                        3,132          5,044
    Accrued interest payable                                     2,648          2,197
                                                           ------------   ------------
Net cash (used in) operating activities                         (7,464)        15,215
Cash flows provided by (used in) investing activities:
  Acquisition and development of investment properties          (6,600)       (13,107)
  Refurbishment of investment properties                        (4,372)        (5,631)
  Net proceeds from sale of investment properties                6,640         47,436
  Cash restricted for refurbishment of properties                1,379           (322)
  Collections on mortgage and other notes receivable             2,340          2,152
                                                           ------------   ------------
Net cash provided by (used in) investing activities               (613)        30,528
Cash flows provided by (used in) financing activities:
  Proceeds from notes payable                                   37,948          5,942
  Repayment of notes payable                                   (38,542)       (37,148)
  Distributions to minority interests                                -           (157)
  Deferred financing costs                                      (2,463)          (251)
                                                           ------------   ------------
Net cash provided by (used in) financing activities             (3,057)       (31,614)
                                                           ------------   ------------
Net increase (decrease) in cash and cash equivalents           (11,134)        14,129
Cash and cash equivalents at beginning of period                19,582         13,032
                                                           ------------   ------------
Cash and cash equivalents at end of period                 $     8,448    $    27,161
                                                           ============   ============
Supplementary disclosure of cash flow information:
       Cash paid during the period for interest            $    19,682    $    20,648
                                                           ============   ============
       Cash paid (net of refunds received) during the
            period for income taxes                        $    14,555    $        96
                                                           ============   ============
</TABLE>

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


                     MOA HOSPITALITY, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

                               September 30, 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
nine-month period ended September 30, 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 and Leasing Activities

         In January through  September  1999, the Company leased  twenty-four of
its  operating  properties  to third party  operators  for various terms through
April 2005.

         In  January  through  September  1999,  the  Company  sold seven of its
lodging  facilities and a vacant parcel of land for approximately  $18.1 million
consisting  of $7.3 million of cash and $10.8 million in notes  receivable.  The
net  gain  recognized  by  the  Company  was  approximately  $2.0  million.   In
comparison,  during the period of January through  September of 1998 the Company
sold  seven  lodging  facilities  and a vacant  parcel of land for a net gain of
$24.5 million.

         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 loan was initially 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>



                     MOA HOSPITALITY, INC. AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS- (Continued)
                                   (Unaudited)

 3. Mortgage and Other Notes Payable - (Continued)

                  The Company's principal repayment  obligations,  reflective of
the above mentioned debt transaction, as of September 30, 1999 is $5,274,000 for
the  remainder of fiscal 1999;  $5,671,000  for 2000 and  $21,448,000  for 2001.
Included in the  $5,274,000 of maturities  for the remainder of fiscal 1999 is a
mortgage loan in the amount of $3,884,000 that matures on December 15, 1999. The
lender has agreed to renew this loan and the legal  documentation  therefore  is
currently being prepared.

4. Acquisitions

                  In June 1999, the Company acquired a newly  constructed  motel
and a parcel  of vacant  land  from an  affiliate  at a cost of  $3,496,000,  in
settlement  of a  receivable.  As of June 30, 1999 there were no further  motels
being developed by the affiliate for the Company and currently no plans for such
further development through the affiliate.

5. 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.

6. Contingencies

                  In July 1999, the Company entered into a settlement  agreement
with ShoLodge Franchise Systems, Inc.  ("ShoLodge")  resolving all disputes with
respect to the litigation initiated by the Company against ShoLodge in 1997. The
Company  disaffiliated  its fourteen Shoney's Inns during the first half of 1998
at which  time it  ceased  the  payment  of  franchise  fees  that  amounted  to
approximately  $650,000 on an annual basis. While ShoLodge was seeking franchise
fees  for  the  remaining  terms  of the  franchise  agreements  the  settlement
agreement  requires  for the  Company to make an initial  payment of $575,000 in
July 1999 and three subsequent  payments of $200,000 in July 2000, 2001 and 2002
without interest. The present value of these payments or $1,068,000 was expensed
in June 1999 as part of the Company's general and administrative expenses.

                  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.


<PAGE>




7. Subsequent Event

                  During the fourth quarter of 1999,  the Company  developed and
commenced  the  implementation  of a  restructuring  plan designed to reduce the
operating cost of the management company divisions operations. The restructuring
plan results in a reduction in the number of employees.  The company anticipates
recording a charge in the fourth quarter of approximately  $500,000  principally
for severance paid to the effected  employees as a result of the  implementation
of the restructuring plan.

                    Through  November 12, 1999,  the Company sold two properties
for an  approximate  $3.2  million  consisting  of $1.7 million in cash and $1.5
million in notes  receivable.  The Company realized gains of approximately  $0.3
million. The Company also leased an additional six properties to third party
tenants.


<PAGE>



8. 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  September  30, 1999 the  Company,  directly and through
subsidiaries, owned 129 lodging facilities in 38 states. The Company owns a 100%
interest in all but two of its properties and also operates all but  twenty-nine
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.
<TABLE>
<CAPTION>

                                                       Three months ended              Nine months ended
                                                          September 30                    September 30
                                                     -----------------------         ----------------------
                                                       1999          1998               1999         1998
                                                     ---------     ---------         ---------    ---------
<S>                                                  <C>           <C>               <C>          <C>
Motel operations:
  Motel operating revenue:
    Room revenues                                    $ 26,587      $ 33,364          $ 70,921     $ 86,602
    Ancillary motel revenues                            1,743         1,908             4,853        5,751
                                                     ---------     ---------         ---------    ---------
       Total motel operating revenues                  28,330        35,272            75,774       92,353
  Motel costs and expenses:
    Motel operating expenses                           13,076        16,152            40,601       46,769
    Marketing and royalty fees                          1,943         2,132             5,177        5,942
    Depreciation and amortization                       2,796         3,651             9,533       10,777
                                                     ---------     ---------         ---------    ---------
       Total motel direct expenses                     17,815        21,935            55,311       63,488
                                                     ---------     ---------         ---------    ---------
                                                       10,515        13,337            20,463       28,865
Corporate Operations
  Other revenues                                        1,237           357             2,788          810
  General and administrative expenses:
    Management Company Operations                       1,288         1,462             4,212        4,011
    Construction/Acquisition and Divestiture              306           221               989          817
    Other general and administrative                      381           959             3,033        2,688
                                                     ---------     ---------         ---------    ---------
      Total general and administrative expenses         1,975         2,642             8,234        7,516
  Depreciation and amortization                           186           543               666        1,503
                                                     ---------     ---------         ---------    ---------
                                                         (924)       (2,828)           (6,112)      (8,209)
                                                     ---------     ---------         ---------    ---------
Net operating income                                    9,591        10,509            14,351       20,656
  Interest expense                                      7,627         7,705            22,330       23,120
                                                     ---------     ---------         ---------    ---------
Income (loss) from operations                           1,964         2,804            (7,979)      (2,464)
  Minority interests                                      (11)          (72)              (16)        (112)
  Gain on sale of properties                              358         9,658             2,010       24,532
                                                     ---------     ---------         ---------    ---------
Income (loss) before income taxes                       2,311        12,390            (5,985)      21,956
  Income tax expense  (benefit)                           932         4,822            (2,215)       8,545
                                                     ---------     ---------         ---------    ---------
Net Income (Loss)                                    $  1,379      $  7,568          $ (3,770)    $ 13,411
                                                     =========     =========         =========    =========

</TABLE>

<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 and nine months ended September 30, 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 September 30, 1999 Compared to the Three Months Ended
September 30, 1998

           The following chart presents certain historical operating results and
      statistics  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 September 30
                                                   -------------------------------------------------------------------
                                                     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                                 $ 25,678  $ 24,874   $     909   $  8,490   $  26,587   $   33,364
     Ancillary motel revenues                         1,677     1,410          66        498       1,743        1,908
                                                   --------- ---------  ----------  ---------  ----------  -----------
       Total motel operating revenues                27,355    26,284         975      8,988      28,330       35,272
   Motel costs and expenses:
     Motel operating expenses                        12,713    10,543         363      5,609      13,076       16,152
     Marketing and royalty fees                       1,858     1,579          85        553       1,943        2,132
     Depreciation and amortization                    1,837     3,017         959        634       2,796        3,651
                                                   --------- ---------  ----------  ---------  ----------  -----------
       Total motel direct expenses                   16,408    15,139       1,407      6,796      17,815       21,935
                                                   --------- ---------  ----------  ---------  ----------  -----------
                                                    $10,947   $11,145   $    (432)  $  2,192      10,515       13,337
                                                   ========= =========  ==========  =========

 Corporate operations:
   Other revenues, net                                                                             1,237          357
   General and administrative expenses:
     Management Company Operations                                                                 1,288        1,462
     Construction/Acquisition
         and Divestiture                                                                             306          221
     Other general and administrative                                                                381          959
                                                                                               ----------  -----------
      Total general and administrative expenses                                                    1,975        2,642
  Depreciation and amortization                                                                      186          543
                                                                                               ----------  -----------
                                                                                                    (924)      (2,828)
                                                                                               ----------  -----------
 Net operating income                                                                          $   9,591   $   10,509
                                                                                               ==========  ===========

 Other data:
 Number of motels at period end (5)                      95        95           5         37         100          132
 Number of rooms at period end (5)                    7,602     7,602         329      3,124       7,931       10,726
 Occupancy percentage (5)                             74.21%    72.93%      67.26%     62.63%      73.11%       69.71%
 ADR (1) (5)                                       $  49.48  $  48.65   $   41.73   $  42.48   $   45.08   $    46.92
 REVPAR (2) (5)                                    $  39.12  $  37.49   $   30.10   $  28.17   $   35.12   $    34.58
 Net operating income margin (3)                                                                   32.44%       29.50%
 Net motel revenue margin (4) (5)                     49.79%    56.93%      58.01%     33.29%      50.07%       50.92%
</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 September 30, 1999 and for the three months then ended, excludes
     amounts related to the twenty nine 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  $29,567,000  for the three months ended
September  30, 1999 from  $35,629,000  for the three months ended  September 30,
1998, a decrease of $6,062,000 or 17.0%.

         Motel  revenues  decreased  to  $28,330,000  for the three months ended
September  30, 1999 from  $35,272,000  for the three months ended  September 30,
1998, a decrease of  $6,942,000  or 19.7%.  The motel  revenues for motels owned
during both periods  increased  approximately  $1,071,000  which was offset by a
decrease of $8,013,000 in motel revenues for motels  acquired and divested since
July 1, 1998.  Motel  revenues for motels  owned  during both periods  increased
4.1%.  The  increase in motel  revenues for motels owned during both periods was
attributable  principally  to an  increase  in the room  revenues  driven  by an
increase  in both  occupancy  and  average  daily rate  ("ADR").  The  occupancy
percentage  increased from 72.93% for the three months ended  September 30, 1998
to 74.21% for the three months ended  September  30, 1999,  an increase of 1.8%.
The ADR for the motels  owned  during both  periods  increased to $49.48 for the
three  months  ended  September  30, 1999 from $48.65 for the three months ended
September  30, 1998, an increase of $0.83 or 1.7%.  Revenue per  available  room
("REVPAR")  for motels  owned  during both  periods  increased to $39.12 for the
three  months  ended  September  30, 1999 from $37.49 for the three months ended
September  30,  1998,  an increase of $1.63 or 4.3%.  The  acquired and divested
motels had an  occupancy  percentage  of 67.26%;  an ADR of $41.73 and REVPAR of
$30.1 for the three months ended September 30, 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 $13,076,000 for the three months
ended  September 30, 1999 from  $16,152,000 for the three months ended September
30, 1998, a net decrease of $3,076,000 or 19.0%.  Motel  operating  expenses for
motels  acquired and divested  since July 1, 1998  decreased to $363,000 for the
three months ended September 30, 1999 from $5,609,000 for the three months ended
September  30,  1998,  a decrease  of  $5,246,000  or 93.5%.  The  decrease  was
partially offset by an increase of $2,170,000 or 20.6% in the costs of operating
the motels owned during both periods.  The cost of operating motels owned during
both periods increased to $12,713,000,  for the three months ended September 30,
1999,  from  $10,543,000  for the three months  ended  September  30, 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 46.2% for the three
months ended  September 30, 1999 from 45.8% for the three months ended September
30, 1998.  Motel  operating  expenses as a percentage of motel  revenues for the
motels  owned in both  periods,  increased  to 46.5% for the three  months ended
September 30, 1999 from 40.1% for the three months ended September 30, 1998.


         Marketing and royalty fees include media advertising,  billboard rental
expense, advertising fund contributions and royalty fees paid to franchisors and
other  related  marketing  expenses.  Marketing  and royalty  fees  decreased to
$1,943,000 for the three months ended September 30, 1999 from $2,132,000 for the
three months  ended  September  30,  1998,  a decrease of $189,000 or 8.9%.  The
marketing  and royalty fees for motels  owned  during both periods  increased to
$1,858,000 for the three months ended September 30, 1999 from $1,579,000 for the
three months ended September 30, 1998, an increase of $279,000 or 17.7%. For the
motels owned during both periods,  marketing and royalty fees as a percentage of
room  revenues  increased to 7.2% for the three months ended  September 30, 1999
from 6.3% for the three  months  ended  September  30,  1998.  The  increase  in
marketing and royalty fees for motels owned in both periods are  principally due
to additional  marketing efforts to increase the occupancy  percentage including
the  affiliation of certain  properties  with national  brands  resulting in the
payment of  franchise  fees on such  properties  in 1999 where no such fees were
incurred in 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 decreased $174,000 to $1,288,000 for the three
months  ended  September  30, 1999 from  $1,462,000  for the three  months ended
September 30, 1998, a decrease of 11.9%. The general and administrative expenses
associated  with  Construction/Acquisition  and Divestiture  Division  increased
$85,000 from $221,000 for the three months ended  September 30, 1998 to $306,000
for the three months ended September 30, 1999. Other General and  Administrative
expenses decreased $578,000 to $381,000 for the three months ended September 30,
1999  from  $959,000  for the  three  months  ended  September  30,  1998.  As a
percentage of total motel  operating  revenues,  Management  Company  Operations
general  and  administrative  expenses  was  4.5%  for the  three  months  ended
September 30, 1999 and 4.1% for the three months ended September 30, 1998.

         Depreciation  and  amortization  decreased to $2,982,000  for the three
months  ended  September  30, 1999 from  $4,194,000  for the three  months ended
September 30, 1998, a net decrease of $1,212,000 or 28.9%. .

         Net operating income decreased to $9,591,000 for the three months ended
September  30, 1999 from  $10,509,000  for the three months ended  September 30,
1998,  a decrease of  $918,000 or 8.7%.  The  decrease in net  operating  income
included a decrease of $3,677,000  in net motel  revenues  (motel  revenues less
motel  operating  expenses and marketing and royalty  fees).  Of the  $3,677,000
decrease  in net motel  revenues,  $1,378,000,  resulted  from the motels  owned
during both periods,  a decrease of 9.7%. Net motel revenues for motels acquired
and divested since July 1, 1998 decreased $2,299,000.  Net operating income as a
percent of total  revenues was 32.4% for the three months  ended  September  30,
1999 as compared to 29.5% for the three months ended September 30, 1998.


        Interest  expense  decreased to  $7,627,000  for the three months ended
September  30, 1999 from  $7,705,000  for the three months ended  September  30,
1998, a decrease of $78,000.  The decrease in interest  expense is reflective of
the lower average amount of outstanding  borrowings  during the third quarter of
1999 as compared to the third quarter 1998.

         Gain on sale of  properties  amounted to $358,000  for the three months
ended  September 30, 1999 compared to $9,658,000  for the  respective  period in
1998. In two unrelated transactions,  one motel and a vacant parcel of land were
sold for $0.3 million in cash and $1.0 million in a note receivable. Five motels
were sold in 1998 for $25.6 million in cash in five  unrelated  transactions  on
which the $9.6 million gain was recognized.

         Net income  decreased to $1,379,000 for the three months ended
September 30, 1999 from net income of $7,568,000 for the three months ended
September 30, 1998.



<PAGE>




Nine Months Ended September 30, 1999 Compared to the Nine Months Ended
September 30, 1998

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

<TABLE>
<CAPTION>

                                                             Supplemental Operating Results and Statistics
                                                   -------------------------------------------------------------------
                                                                             (unaudited)

                                                                     Nine Months Ended September 30
                                                   -------------------------------------------------------------------
                                                      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                                 $ 62,180  $ 61,061   $   8,741   $ 25,541   $  70,921   $   86,602
     Ancillary motel revenues                         4,368     3,727         485      2,024       4,853        5,751
                                                   --------- ---------  ----------  ---------  ----------  -----------
       Total motel operating revenues                66,548    64,788       9,226     27,565      75,774       92,353
   Motel costs and expenses:
     Motel operating expenses                        34,339    29,973       6,262     16,796      40,601       46,769
     Marketing and royalty fees                       4,480     4,153         697      1,789       5,177        5,942
     Depreciation and amortization                    6,484     8,113       3,049      2,664       9,533       10,777
                                                   --------- ---------  ----------  ---------  ----------  -----------
       Total motel direct expenses                   45,303    42,239      10,008     21,249      55,311       63,488
                                                   --------- ---------  ----------  ---------  ----------  -----------
                                                   $ 21,245  $ 22,549   $    (782)  $  6,316      20,463       28,865
                                                   ========= =========  ==========  =========

 Corporate operations:
   Other revenues, net                                                                             2,788          810
   General and administrative expenses:
     Management Company Operations                                                                 4,212        4,011
     Construction/Acquisition
         and Divestiture                                                                             989          817
     Other general and administrative                                                              3,033        2,688
                                                                                               ----------  -----------
       Total general and administrative expenses                                                   8,234        7,516
   Depreciation and amortization                                                                     666        1,503
                                                                                               ----------  -----------
                                                                                                  (6,112)      (8,209)
                                                                                               ==========  ===========
 Net operating income                                                                          $  14,351   $   20,656
                                                                                               ==========  ===========

 Other data:
 Number of motels at period end (5)                      94        94           6         38         100          132
 Number of rooms at period end (5)                    7,536     7,536         395      3,190       7,931       10,726
 Occupancy percentage (5)                             66.73%    65.58%      58.47%     60.00%      65.29%       63.75%
 ADR (1) (5)                                       $  45.25  $  45.18   $   34.48   $  42.36   $   42.30   $    44.31
 REVPAR (2) (5)                                    $  32.31  $  31.44   $   21.28   $  27.43   $   29.51   $    30.12
 Net operating income margin (3)                                                                   18.27%       22.17%
 Net motel revenue margin (4) (5)                     44.59%    50.22%      25.94%     35.16%      42.29%       45.77%
</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 September  30, 1999 and for the nine months then ended,  excludes
     amounts  related to the twenty nine motels which are leased to third
     party tenants.


<PAGE>




         Total revenues decreased $14,601,000 to $78,562,000 for the nine months
ended September 30, 1999 from $93,163,000 for the nine months ended
September 30, 1998 or 15.7%.

         Motel  revenues  decreased  to  $75,774,000  for the nine months  ended
September  30, 1999 from  $92,353,000  for the nine months ended  September  30,
1998, a decrease of $16,579,000 or 18.0%.  The motel revenues,  for motels owned
during both periods, increased approximately $1,760,000 or 2.7% which was offset
by a decrease of $18,339,000 for acquired and divested motels,  since January 1,
1998.  The increase in motel room  revenues for motels owned during both periods
was  attributable  principally to an increase in the occupancy  percentage.  The
occupancy  percentage  increased from 65.58% for the nine months ended September
30, 1998 to 66.73% for the nine months ended September 30, 1999. The increase in
occupancy  percentage is principally a result of  management's  efforts to raise
occupancy by decreasing  the average daily rate ("ADR") during the slower months
of  January  through  May.  The ADR for the motels  owned  during  both  periods
increased to $45.25 for the nine months ended September 30, 1999 from $45.18 for
the nine months ended  September 30, 1998, an increase of $0.07 or 0.2%.  REVPAR
for motels  owned  during both  periods  increased to $32.31 for the nine months
ended  September  30, 1999 from $31.44 for the nine months ended  September  30,
1998,  an increase of $0.87 or 2.8%.  The acquired  and  divested  motels had an
occupancy  percentage  of 58.47%,  an ADR of $34.48 and REVPAR of $21.28 for the
period in 1999 that they were owned by the Company.

         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 $40,601,000 for the nine months
ended  September 30, 1999 from  $46,769,000  for the nine months ended September
30, 1998, a net decrease of  $6,168,000 or 13.2%.  The cost of operating  motels
owned during both periods  increased  to  $34,339,000  for the nine months ended
September  30, 1999 from  $29,973,000  for the nine months ended  September  30,
1998,  an increase of $4,366,000  or 14.6%.  The increase in operating  costs is
principally  due to the  increased  labor and  related  costs and an increase in
repair  and  maintenance  expenditures.  Motel  operating  expenses  for  motels
acquired and divested since January 1, 1998 decreased to $6,262,000 for the nine
months  ended  September  30, 1999 from  $16,796,000  for the nine months  ended
September 30, 1998.  Motel operating  expenses as a percentage of motel revenues
increased to 53.6% for the nine months ended  September  30, 1999 from 50.6% for
the nine  months  ended  September  30,  1998.  Motel  operating  expenses  as a
percentage of motel revenues, for the motels owned in both periods, increased to
51.6% for the nine  months  ended  September  30,  1999 from  46.3% for the nine
months ended  September 30, 1998. For the nine months ended  September 30, 1999,
motel  operating  expenses  were 67.9% of motel  revenues  for the  acquired and
divested motels.

         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
$5,177,000 for the nine months ended  September 30, 1999 from $5,942,000 for the
nine months  ended  September  30,  1998,  a decrease of $765,000 or 12.9%.  The
marketing  and royalty fees for motels  owned  during both periods  increased to
$4,480,000 for the nine months ended  September 30, 1999 from $4,153,000 for the
nine months ended  September 30, 1998, an increase of $327,000 or 7.9%.  For the
motels owned during both periods,  marketing and royalty fees as a percentage of
room  revenues  increased to 7.2% for the nine months ended  September  30, 1999
from  6.8% for the nine  months  ended  September  30,  1998.  The  increase  in
marketing  and  royalty  fees is a result  of  managements  increased  marketing
efforts during the January to May timeframe to build market share in addition to
affiliating certain properties previously operated as independents  resulting in
the commencement of franchise fees.

<PAGE>

         Corporate  general and  administrative  expenses are  segregated by the
Company   into   three   separate   areas,    Management   Company   Operations,
Construction/Acquisition and Divestitures, 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 Operations increased $201,000 to $4,212,000 for the nine months ended
September 30, 1999 from $4,011,000 for the nine months ended September 30, 1998,
an increase of 5.0%. The general and  administrative  expenses  associated  with
Construction/Acquisition  and Divestitures  increased $172,000 from $817,000 for
the nine months ended  September  30, 1998 to $989,000 for the nine months ended
September 30, 1999. Other General and Administrative expenses increased $345,000
to $3,033,000 for the nine months ended  September 30, 1999 from  $2,688,000 for
the nine  months  ended  September  30,  1998.  This  increase  is the result of
entering into a settlement  agreement  with  ShoLodge  Franchise  Systems,  Inc.
("ShoLodge")  in July  1999 that  resolved  all  disputes  with  respect  to the
litigation  initiated  by the  Company  against  ShoLodge  in 1997.  The Company
disaffiliated  its fourteen Shoney's Inns during the first half of 1998 at which
time it ceased the payment of  franchise  fees that  amounted  to  approximately
$650,000 on an annual basis.  While ShoLodge was seeking  franchise fees for the
remaining terms of the franchise  agreements the settlement  agreement  provides
for the  Company to make an initial  payment of  $575,000 in July 1999 and three
subsequent  payments of $200,000 in July 2000,  2001 and 2002 without  interest.
The present value of these  payments or $1,068,000  was expensed in June 1999 as
part of the Company's general and  administrative  expenses.  As a percentage of
total motel operating revenues, Management Operations general and administrative
expenses was 5.6% for the nine months ended  September 30, 1999 and 4.3% for the
nine months ended September 30, 1998.

         Depreciation  and  amortization  decreased to $10,199,000  for the nine
months  ended  September  30, 1999 from  $12,280,000  for the nine months  ended
September  30,  1998,  a net  decrease  of  $2,081,000  or 16.9%.  Approximately
$837,000 of the net decrease in depreciation and amortization is attributable to
the corporate operations.

         Net operating income decreased to $14,351,000 for the nine months ended
September  30, 1999 from  $20,656,000  for the nine months ended  September  30,
1998, a decrease of  $6,305,000 or 30.5%.  The decrease in net operating  income
included a decrease of $9,646,000  in net motel  revenues  (motel  revenues less
motel  operating  expenses and marketing and royalty  fees).  Of the  $9,646,000
decrease in net motel revenues, $2,933,000 resulted from the motels owned during
both periods,  a decrease of 9.6%.  Net motel  revenues for motels  acquired and
divested since January 1, 1998 decreased  $6,713,000.  Net operating income as a
percent of total revenues was 18.3% for the nine months ended September 30, 1999
as compared to 22.2% for the nine months ended September 30, 1998.



         Interest  expense  decreased to $22,330,000 for the nine months ended
September  30, 1999 from  $23,120,000  for the nine months ended  September  30,
1998, a decrease of $790,000.


         Gain on sale of properties  amounted to $2,010,000  for the nine months
ended  September 30, 1999 compared to $24,532,000  for the respective  period in
1998. In eight unrelated  transactions,  seven properties and a vacant parcel of
land were sold for $7.3 million in cash and $10.8  million in notes  receivable.
Seven motels and a parcel of vacant land were sold in 1998 for $50.0  million in
cash in  eight  unrelated  transactions  on which  the  $24.5  million  gain was
recognized.

         Net income  decreased to a net loss of  $3,770,000  for the nine months
ended  September 30, 1999 from a net income of  $13,411,000  for the nine months
ended September 30, 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 was initially  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 September 30,
1999 is  $5,274,000  for the remainder of fiscal 1999;  $5,671,000  for 2000 and
$21,448,000 for 2001. Included in the $5,274,000 of maturities for the remainder
of fiscal 1999 is a mortgage  loan in the amount of  $3,884,000  that matures on
December  15,  1999.  The  lender  has  agreed to renew  this loan and the legal
documentation therefore is currently being prepared.



         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 $6,600,000 and $5,631,000 for the nine months ended September 30,
1999 and 1998, respectively.  In addition, as of September 30, 1999, the Company
had $824,000 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 nine months ended September 30, 1999, cash and cash equivalents
decreased  $11,134,000.  This  decrease  consisted  of $613,000 of funds used in
investing  activities and  $3,057,000 of funds used by financing  activities and
$7,464,000 of funds used in  operations.  Net  investing  activities of $613,000
include;  $4,372,000  of cash  utilized  for motel  development  and  $6,600,000
expended on refurbishment of existing  properties,  offset by $8,980,000 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
$1,379,000. Cash provided by financing activities includes:  $38,542,000 of cash
utilized  to repay  indebtedness;  and  $2,463,000  of cash  used  for  deferred
financing  costs and other items offset by $37,948,000  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

         See Note 6 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.




November 12, 1999                   By:            /s/  Kurt M. Mueller
                                                     Kurt M. Mueller
                                                 Chief Financial Officer


November 12, 1999                  By:           /s/   Blane P. Evans
                                                    Blane P. Evans
                                        Vice President, Secretary and Treasurer