Japan Hotel REIT Investment : Announcement of Monthly Disclosure for December 2019

This English translation is provided for information purposes only. If any discrepancy is identified between this translation and the Japanese original, the Japanese original shall prevail.

January 24, 2020

REIT Issuer:

Japan Hotel REIT Investment Corporation (TSE code: 8985)

Kaname Masuda, Executive Director

Asset Management Company:

Japan Hotel REIT Advisors Co., Ltd.

Hisashi Furukawa, President & CEO

Contact:

Makoto Hanamura

Executive Director,

Head of Planning Group, Operations Division

TEL: [phone]

Announcement of Monthly Disclosure for December 2019

With respect to the business performance of the hotels owned by Japan Hotel REIT Investment Corporation (hereinafter called "JHR") for December 2019, JHR informs you of the monthly sales, occupancy rates, ADR, and RevPAR of rooms department of the 21 Hotels with Variable Rent, etc. as below. For each hotel's track record of hotel operations, please check JHR's website (Note 1).

JHR continues to announce monthly disclosure of hotels from which JHR receives variable rent or income from management contracts and whose lessees, etc. have agreed with the monthly disclosure.

					Fluctuation	Change in		Fluctuation	Change in
						of the	fluctuation of
					compared	fluctuation
						cumulative	the
					with	compared	Cumulative
	Hotel / Indicators		December	total	cumulative
		the same	with	total
		compared	total
					month	the same	(Note 10)
					with	compared
					last year	month
						last year	with
					(Note 9)	last year
						(Note 11)	last year
Total of the 21 Hotels	Occupancy rate	83.9%	(0.9)%	(1.0)%	86.5%	(0.7)%	(0.8)%
ADR	(JPY)	14,545	(1,027)	(6.6)%	15,539	(322)	(2.0)%
with Variable Rent,	RevPAR	(JPY)	12,201	(1,000)	(7.6)%	13,444	(388)	(2.8)%
	etc.
		Sales	(JPY 1M)	4,006	(293)	(6.8)%	48,443	(772)	(1.6)%
		Occupancy rate	83.4%	(0.6)%	(0.7)%	87.6%	0.1%	0.1%
	The Eleven HMJ	ADR	(JPY)	16,681	(1,305)	(7.3)%	17,610	(629)	(3.5)%
	Hotels	RevPAR	(JPY)	13,917	(1,198)	(7.9)%	15,427	(530)	(3.3)%
		Sales	(JPY 1M)	3,307	(257)	(7.2)%	39,918	(667)	(1.6)%

In December 2019, the number of inbound visitors to Japan reached a record high in December in Hong Kong and some Southeast Asian countries, and the number of inbound visitors to Japan in 19 markets excluding South Korea (Note 13) remained strong and increased by 16.7% from the same month last year. On the other hand, the number of inbound visitors to Japan in South Korea declined by 63.6% from the same month last year. As a result, the total number of inbound visitors to Japan decreased by 4.0% from the previous year.

While RevPAR of some hotels owned by JHR exceeded those of the same month last year, other hotels owned by JHR were affected by new supply and a decline in inbound visitors from South Korea. As a result, RevPAR of total of the 21 Hotels with variable rent, etc. and the Eleven HMJ Hotels decreased from the same month last year.

Under these circumstances, each hotel owned by JHR has been continuously implementing various measures to recover RevPAR.

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(Note 1) Please check JHR's website below for each hotel's track record of hotel operations.

http://www.jhrth.co.jp/en/portfolio/review.html

(Note 2) The 21 Hotels with Variable Rent, etc. are The Eleven HMJ Hotels plus ibis Tokyo Shinjuku, ibis Styles Kyoto

Station, ibis Styles Sapporo, Mercure Sapporo, Mercure Okinawa Naha, Mercure Yokosuka, the b ikebukuro, the b hachioji, the b hakata and the b suidobashi. The Eleven HMJ Hotels are Kobe Meriken Park Oriental Hotel, Oriental Hotel tokyo bay, Namba Oriental Hotel, Hotel Nikko Alivila, Oriental Hotel Hiroshima, Okinawa Marriott Resort & Spa, ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel), Holiday Inn Osaka Namba, Hilton Tokyo Narita Airport, International Garden Hotel Narita and Hotel Nikko Nara (With regard to Oriental Hotel Fukuoka Hakata Station (formerly Hotel Centraza Hakata), major renovation works (hereinafter the "Renovation") which needed to close entire hotel operation was carried out from October 2018 to April 8, 2019. Therefore, numbers for Oriental Hotel Fukuoka Hakata Station are not included in HMJ Group Hotels as the hotel operation was suspended during the Renovation.)

(Note 3) The numbers and comments above have been prepared based on information the asset management company had

obtained from the lessees, etc. and are only provided as a reference of general trends.

(Note 4) Numbers for each month and numbers and information shown in the comments have not been audited nor been

the subject of the independent verification of the asset management company. Therefore, no guarantee is made as to the accuracy or completeness of the numbers and information. Also, the sales for each month and sum total of each month may be different from total sales for the six-month or full year stated in the annual securities report, etc. to be submitted later.

(Note 5) Occupancy rate: The number of rooms sold during the period is divided by the number of rooms available during

the same period.

(Note 6) ADR (Average Daily Rate): Total rooms revenue for a certain period (excluding service charges) is divided by the total number of rooms sold during the period.

Service charge in each hotel is as follows: <10% service charge>

・Kobe Meriken Park Oriental Hotel ・Oriental Hotel tokyo bay

・Namba Oriental Hotel

・Hotel Nikko Alivila

・Oriental Hotel Hiroshima

・Okinawa Marriott Resort & Spa

・ACTIVE-INTER CITY HIROSHIMA (Sheraton Grand Hiroshima Hotel) ・International Garden Hotel Narita

・Hotel Nikko Nara <12% service charge>

・Hilton Tokyo Narita Airport

・Holiday Inn Osaka Namba ・ibis Tokyo Shinjuku

・ibis Styles Kyoto Station ・ibis Styles Sapporo

・Mercure Sapporo

・Mercure Okinawa Naha ・Mercure Yokosuka

・the b ikebukuro ・the b hachioji ・the b hakata ・the b suidobashi

As for the hotels disclosed on JHR's website, the service charge in Hilton Tokyo Odaiba is 13%, the service charge in Oriental Hotel Fukuoka Hakata Station is 10%, and no service charge is requested in Hotel Oriental Express Osaka Shinsaibashi.

(Note 7) RevPAR (Revenue Per Available Room): Total rooms revenue for a certain period (excluding service charges) is

divided by the total number of available rooms during the period. It is the same as multiplying ADR by occupancy rate.

(Note 8) Occupancy rate is rounded off to the first decimal place. ADR and RevPAR are rounded off to the nearest whole

number. Sales are rounded off to the nearest million yen.

(Note 9) Fluctuation compared with the same month last year means the fluctuation between the concerned month

(December) and the same month last year.

(Note 10) Cumulative total is the cumulative total from the beginning of the period (January) to the concerned month

(December).

(Note 11) Fluctuation of cumulative total compared with last year means the fluctuation between the cumulative total from

the beginning of the period (January) to the concerned month (December) and the cumulative total from the beginning of the period last year (January) to the same concerned month (December) last year.

(Note 12) Sales are only from hotels and exclude rent from non-hotel tenants.

(Note 13) Japan National Tourism Organization (JNTO) classifies inbound visitors to Japan into 20 countries and areas

(markets). In December 2019, all 19 markets excluding South Korea showed a positive growth.

• Website of Japan Hotel REIT Investment Corporation:http://www.jhrth.co.jp/en/
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