Thank you for your support and patronage to Japan Hotel REIT Investment Corporation (JHR) and its asset management company, Japan Hotel REIT Advisors Co., Ltd.

Having settled the accounts for JHR's 24th fiscal period (from January 1, 2023 to December 31, 2023), we are pleased to report the management status and performance results for the period.

The year 2023 marked significant progress in the country's recovery from the COVID-19 pandemic and its move towards normalizing socio-economic activities, with domestic leisure demand remaining robust throughout the year. The number of inbound visitors for the year has recovered to almost 80% of the same period in 2019, approaching the pre-pandemic level. Notably, the fourth quarter saw inbound visitor numbers surpass the 2019 figures, indicating a strong recovery in the hotel market driven by vigorous domestic and international accommodation demand. Consequently, room rates at many hotels exceeded those recorded in 2019.

Under such an environment, JHR resumed acquiring properties, which had been approached with caution during the COVID-19 pandemic. JHR acquired UAN kanazawa in January 2023 and Sotetsu Fresa Inn Shimbashi-Karasumoriguchi in March 2023, using cash on hand and further acquired three properties, La'gent Stay Sapporo Odori, Oriental Hotel Kyoto Rokujo, and Hotel Oriental Express Fukuoka Nakasukawabata, in September 2023 through the first public offering since the COVID-19 pandemic. In December of the same year, JHR acquired Hotel JAL City Kannai Yokohama, which was entirely financed by debt. These acquisitions, totaling 33.3 billion yen for six properties, have significantly enhanced JHR’s portfolio by adding highly competitive hotels in regions with growth potential in accommodation demand.

For its internal growth, JHR has been maintaining close communication with the lessees and operators of each hotel to improve revenues by implementing a high unit-price sales strategy. In addition, JHR worked to improve profitability through measures to reduce operating costs continuously.

As a result of these efforts, for the fiscal year ended December 2023, JHR recorded operating revenue of 26,574 million yen, ordinary income of 13,135 million yen, net income of 13,134 million yen, and dividend per unit of 3,015 yen.

JHR believes that the hotel market will overcome the impact of the COVID-19 pandemic and enter a growth phase driven by strong and robust demand from both domestic and inbound visitors. JHR aims to maximize revenue by aggressively capturing demand in the strong hotel market.

Together with Japan Hotel REIT Advisors Co., Ltd., JHR is dedicated to further growth and enhancing its attractiveness by leveraging its extensive expertise and know-how cultivated to date.
We sincerely appreciate your continued support for us.