SecProbe.io

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      May 13, 2005

Mail Stop 4561 via U.S. Mail and Fax (847) 228-5409

Mr. James B. Dale
Chief Financial Officer
Arlington Hospitality, Inc.
2355 South Arlington Heights Road, Suite 400
Arlington Heights, Illinois 60005

Re:	Arlington Hospitality, Inc.
	Form10-K for the year ended December 31, 2004
      File No. 0-15291

Dear Mr. Dale:

      We have reviewed your filing and have the following
comments.
We have limited our review to only the issues addressed below and
will make no further review of your documents.  As such, all
persons
who are responsible for the adequacy and accuracy of the
disclosure
are urged to be certain that they have included all information
required pursuant to the Securities Exchange Act of 1934.

      Where indicated, we think you should revise your document in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Note 12 - Sale of Hotels and Plan for Future Hotel Dispositions,
page
F-29:
1. Please clarify to us why you have reported as revenues the
proceeds from the sale of hotels and as expense the carrying value
of
those hotels rather than reporting a gain or loss on the sale of
the
hotels as an element of non operating income in the statement of
operations.
2. Since the Company is obligated to pay PMC the difference
between
the Assigned Value and the sale proceeds PMC receives upon the
ultimate sale of a hotel, it appears that this mechanism serves to
guarantee PMC a return of its investment.  What consideration was
given to accounting for the sales to PMC, in 1998 and 1999, as a
financing based on the guidance of paragraph 28 of SFAS 66?
3. Please provide us with a schedule showing the original deferred
gain on the sale of the 30 AmeriHost Inn hotels to PMC in 1998 and
1999 and the subsequent activity in the account by year.  Also
show
the effect on each line item in the statement of operations by
year.
Note 14 - Commitments, Contingencies and Other Matters, page F-33:
4. We understand from the information in the penultimate paragraph
on
page 44 and elsewhere that the modification of certain leases with
PMC resulted in a 19% permanent reduction in monthly lease
payments
but apparently the lease obligation still exceeds the operating
cash
flows from these hotels before the lease payments.  In addition,
we
understand that as a result of the modification of the lease, the
leases for 17 of the 20 hotels were converted to capital leases
from
operating leases.  Since the reduction in the lease rates implies
a
possible reduction in the fair value of the hotels subject to the
sale leaseback, please clarify to us what consideration was given
to
the need to recognize a loss based on the guidance of paragraph
33(c)
of SFAS 13 or SFAS 144.
5. Further we understand that the capital lease property and
equipment were recorded at $32.3 million and a $37.8 million
capital
lease obligation was recognized.  Clarify to us the basis for
amortizing the difference over the remaining lease term as lease
expense.
6. Clarify to us how the Arlington Fee and the Proceeds Deficit
Notes
are considered in the Company`s determination of the gain or loss
realized on each hotel sale to PMC.  What consideration did you
give
to treating these as downward adjustments to the sales price of
the
hotels in the Company`s determination of the gain or loss to be
recognized from the sales of the hotels?
7.
Refer to the disclosures on page 61 and elsewhere.  In a
supplemental
response, please clarify to us the rationale for reducing the
lease
payments effective October 1, 2004 by 19% for the hotels sold and
leased back from PMC with the provisions that the hotels be sold
within a four year period.  Secondly, clarify the rationale for
having the lease payments revert to the pre October 1, 2004 level
in
the event the hotels are not sold within the prescribed time
frame.
Your response should address whether the lease rate after the 19%
reduction represents a market rate.  If not, tell us what
consideration you gave to viewing the "Arlington Fee" as a means
to
adjust the lease rate to market and therefore reflect the fee as
an
additional lease payment to be recognized on a straight line
basis.

      *    *    *    *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please file
your cover letter on EDGAR.  Please understand that we may have
additional comments after reviewing your responses to our
comments.

We urge all persons who are responsible for the accuracy and
adequacy
of the disclosure in the filings reviewed by the staff to be
certain
that they have provided all information investors require for an
informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

      You may contact Thomas Flinn, Staff Accountant, at (202)
551-
3469 or the undersigned at (202) 551-3498 if you have questions.

						Sincerely,

Linda Van Doorn
Senior Assistant Chief Accountant

Arlington Hospitality, Inc.
May 13, 2005
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