<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

(Mark One)

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

       For the fiscal year ended January 31, 2000.

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

       For the transition period from  _______________ to _________________.

                         Commission File No.  1-7062
                                            ---------

                         InnSuites Hospitality Trust
--------------------------------------------------------------------------------
            (Exact Name of Registrant as Specified in Its Charter)


              Ohio                                            34-6647590
------------------------------------------              ---------------------
(State or Other Jurisdiction of                             (I.R.S. Employer
Incorporation or Organization)                          Identification Number)


InnSuites Hotels Centre, 1625 E. Northern Avenue,
         Suite 201, Phoenix, Arizona                                  85020
---------------------------------------------------------          ----------
 (Address of Principal Executive Offices)                         (ZIP Code)

Registrant's Telephone Number, including area code      (602) 944-1500
                                                      ------------------


Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class                     Name of Exchange on Which Registered
--------------------                    ------------------------------------
Shares of Beneficial                           American Stock Exchange
Interest, without
par value

Securities registered pursuant to Section 12(g) of the Act:  None

   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. Yes /X/ No / /


                      [Cover Continued on Following Page]

                                      -1-
<PAGE>

         [Cover Continued From Previous Page]

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]


Aggregate market value of voting stock held by non-affiliates of the Registrant
as of May 10, 2000: $3,248,304.


Number of shares of voting stock outstanding as of May 10, 2000: 2,511,157.



                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the Proxy Statement for the July 17, 2000 Annual Meeting of
Shareholders are incorporated by reference into Part III hereof.

                                      -2-
<PAGE>

                                    PART I
                                   ---------


Item 1.  BUSINESS.
         ---------

Introduction to Our Business

     InnSuites Hospitality Trust, formerly known as Realty ReFund Trust  (the
"Trust"), was organized in 1971 and operates as an unincorporated Ohio real
estate investment trust. On January 31, 2000, the Trust owned a 44.9% sole
general partner interest in RRF Limited Partnership, a Delaware limited
partnership (the "Partnership"). On January 31, 2000, the Partnership owned,
directly or indirectly, ten InnSuites(R) hotels located in Arizona and southern
California (all ten InnSuites(R) hotels are hereinafter referred to as the
"Hotels"). The Trust employs five people.

     The Hotels feature 1,665 hotel suites and operate as moderate- and full-
service hotels which apply an operating philosophy formulated in 1980 by James
F. Wirth, current Chairman, President and Chief Executive Officer of the Trust.
Initially, the Trust attempts to acquire under-performing hotel properties below
replacement cost. Through intensive refurbishment and management programs, the
Trust repositions the acquired hotels as studio and two-room suite hotels that
offer services such as free breakfast buffets and complementary afternoon social
hours plus amenities, such as microwave ovens, refrigerators and coffee makers
in each studio or two-room suite.

     The Trust has elected to be taxed as a real estate investment trust
("REIT"), as that term is defined and used in Sections 856-860 of the Internal
Revenue Code of 1986, and the Regulations thereunder (all as amended, the
"Code"). In order to maintain its REIT tax status, the Trust has affiliated with
certain other hotel hospitality companies. The Partnership leases the Hotels to
InnSuites Hotels, Inc.(the "Lessee"). The Lessee pays rent to the Partnership
pursuant to percentage lease agreements (the "Percentage Leases") providing for
periodic rental payments based primarily upon the revenues of the Hotels. The
Trust obtains income from cash distributions made by the Partnership and those
distributions largely depend upon the Partnership's earnings under the
Percentage Leases.

     Further affiliations involve managing the Hotels and licensing the
InnSuites brand. The Lessee currently operates and manages all of the Hotels,
with the assistance of InnSuites Innternational Hotels, Inc., (the "Management
Company"). Pursuant to management contracts, the Lessee pays the Management
Company an annual management fee of 2.5% of gross room and other revenues for
property management services. The Lessee pays InnSuites Licensing Corp. an
annual licensing fee of 2.5% of gross room and other revenues (1.25% for those
hotel properties which also carry a third-party franchise, such as Best
Western(R) or Holiday Inn(R)) for trademark and licensing services relating to
the use of the InnSuites(R) name and marks.

     Effective October 12, 1999, the Partnership, the Lessee and the Management
Company entered into an Intercompany Agreement whereby, subject to certain terms
and conditions, the Partnership will grant the Lessee a right of first refusal
to lease, and the Management Company a right of first refusal to operate, any
real property acquired by the Partnership.  In return, the Partnership will be
granted a right of first refusal to pursue opportunities presented to the Lessee
or the Management Company to purchase investments in real estate, hotel
properties, real estate mortgages, real estate derivatives or entities that
invest in the foregoing.



Historical Operations and the Formation Transactions

     Until January 31, 1998, the Trust specialized in wrap-around mortgage
lending, whereby the Trust offered borrowers a total mortgage loan (the wrap-
around loan), the principal amount of which equaled the balance outstanding on
an existing prior mortgage loan on the borrower's property, plus an additional
amount supplied by the Trust, on existing income-producing commercial,
industrial and multi-unit

                                      -3-
<PAGE>

residential real property. The Trust originated no new mortgage loans since the
fiscal year ended January 31, 1995 and the final two outstanding mortgage loans
receivable matured and were fully paid and canceled during the fiscal year ended
January 31, 1998.

     In August 1996, the Trust began to evaluate a combination with Hospitality
Corporation International ("HCI"), an Arizona corporation owned by James F.
Wirth and his wife, which controlled seven all-suite hotel properties,
comprising 1,036 hotel studio and two-room suites, in Tucson, Phoenix,
Scottsdale, Tempe, Flagstaff and Yuma, Arizona and in Ontario, California (the
"Initial Hotels"). HCI proposed a series of transactions resulting in a
combination of the Initial Hotels with the Trust.

     In late October 1996, the Trust and HCI reached a preliminary agreement as
to the framework of the proposed transactions, culminating in the execution of a
definitive Formation Agreement on December 27, 1996 (the "Formation Agreement").
The execution of the Formation Agreement was ratified and approved by the
Trustees and by HCI's Board of Directors on February 14, 1997, at which time the
Trust announced the proposed transaction to the public. At the 1997 annual
shareholders' meeting held on January 28, 1998, the shareholders of the Trust
approved the terms and execution of the Formation Agreement.

     The Formation Agreement provided for the organization of the Partnership,
of which the Trust would be the sole general partner, initially holding a 13.6%
interest, with the former partners in the Initial Hotels investing as limited
partners, receiving a collective 86.4% interest, and for restructuring the Trust
into an "umbrella partnership REIT", or "UPREIT". The Partnership acquired
substantial interests in six of the Initial Hotels. The seventh hotel, located
in Scottsdale, Arizona, was acquired directly by RRF Sub Corp., a then newly-
formed Nevada corporation and wholly-owned subsidiary of the Trust. RRF Sub
Corp. subsequently contributed the Scottsdale, Arizona hotel to the Partnership
in exchange for general partnership interests therein. The Trust contributed
$2,081,000 in cash to the Partnership to obtain its initial 13.6% sole general
partner interest.

     In accordance with the terms of the Formation Agreement, the previous
Trustees and executive officers of the Trust resigned, and new Trustees and
executive officers were appointed, effective January 30, 1998.

     The Partnership has two outstanding classes of limited partnership
interests, Class A and Class B, identical in all respects except that each Class
A limited partnership unit is convertible, at the option of the Class A holder,
into one newly-issued Share of Beneficial Interest of the Trust. No particular
conversion will be allowed, however, if a determination is made that such
conversion would cause the Trust to no longer qualify as a REIT  under the Code.
A total of 2,174,931 Class A limited partnership units were issued to the former
partners in the Initial Hotels. Class B limited partnership units may be
converted only upon the approval of the Board of Trustees, provided that such
conversion would not cause the Trust to fail to qualify as a REIT. A total of
4,017,361 Class B limited partnership units were issued to Mr. Wirth and certain
of his affiliates in order to satisfy ownership concentration limitations placed
upon REITs by the Code. The Partnership Agreement of the Partnership subjects
both general and limited partner units to restrictions on transfer.

     In addition to the restructuring, the Trust's investment advisor, Mid-
America ReaFund Advisors, Inc. ("MARA"), which was owned by the Trusts former
Co-Chief Executive Officers, Messrs. Krause and Berick, was acquired by Mr.
Wirth and his wife. MARA provided investment advisory and consulting services to
and administered the day-to-day investment operations of the Partnership and the
Trust under the supervision of the Trustees pursuant to an Advisory Agreement
executed between the Partnership and MARA. The Advisory Agreement was terminated
as of January 1, 1999. See "Advisory Agreement and MARA" below.


                                      -4-
<PAGE>




Hotel Acquisitions following the Formation Transactions

     Following the Formation Transactions, the Partnership acquired three
additional all-suite hotels. First, effective as of February 1, 1998, the
Partnership acquired the InnSuites Hotels Tucson St. Mary's located in Tucson,
Arizona. The total consideration for the acquisition was $10,820,000 and was
based upon an appraisal conducted by an independent third party. Mr. Wirth and
his wife indirectly owned the Tucson St. Mary's hotel property. Second, on April
29, 1998, the Partnership acquired the Lafayette Hotel Ramada Inn & Conference
Center located in San Diego, California. The Partnership paid $5,148,000 for
this hotel property based on arms-length negotiations with the owners of that
property. Third, the  Partnership acquired the InnSuites Hotel located in Buena
Park, California, effective June 1, 1998. The total consideration for the
acquisition was $7,100,000 and was based upon an appraisal conducted by an
independent third party. James F. Wirth and Steven S. Robson indirectly owned
the Buena Park hotel property. Subsequent to this acquisition, Mr. Robson was
elected as a Trustee of the Trust by the shareholders of the Trust.

     The Trust believes that the greatest opportunities for revenue growth and
profitability will arise from the skillful management and repositioning of
current and future acquired hotel properties. The Trust's primary business
objectives are to maximize current returns to its shareholders through increases
in cash flow available for distribution and to increase long-term total returns
to shareholders. The Trust will seek to achieve these objectives through (i)
participation in increased revenues from the Hotels pursuant to the Percentage
Leases by intensive management and marketing, and (ii) selective acquisitions
and expansion of the InnSuites Hotels in California and in the southwestern
United States.


Competition in the Hotel Industry

     The hotel industry is highly competitive. Each of the Hotels experiences
competition primarily from other mid-market hotels in its immediate vicinity,
but also competes with other hotel properties in other geographic markets. While
none of the Hotels' competitors dominate any of the Trust's geographic markets,
some of those competitors have substantially greater marketing and financial
resources than the Trust and the Partnership.

     A number of additional hotel property developments have been announced or
have recently been completed by competitors in a number of the Hotels' markets,
and additional hotel property developments may be built in the future. Such
hotel developments have had, and could continue to have, an adverse effect on
the revenues of the Hotels in such competitive markets.

     The Trust has chosen to focus its hotel investments in Arizona and southern
California. Particularly, the Trust has a concentration of assets in the
metropolitan Phoenix, Arizona market. In the Phoenix, Arizona market, hotel room
supply is increasing faster than the rate of demand. Supply rates are also
generally increasing faster than demand rates in the Flagstaff, Tucson and Yuma,
Arizona and Ontario, California markets. The Buena Park and San Diego,
California markets continue to support balanced supply and demand.

     The Trust and the Partnership may also compete for investment opportunities
with other entities that have substantially greater financial resources. These
entities also may generally accept more risk than the Trust and the Partnership
can prudently manage. Competition may generally reduce the number of suitable
future investment opportunities available to the Trust and the Partnership and
increase the bargaining power of owners seeking to sell their properties.

                                      -5-
<PAGE>

Seasonality of the Hotel Business

     The hotel business is seasonal in nature. The six southern Arizona hotels
experience their highest occupancy in the first fiscal quarter and, to a lesser
extent, the fourth fiscal quarter. The second fiscal quarter tends to be the
lowest occupancy period at those six southern Arizona hotels. This seasonality
pattern can be expected to cause significant fluctuations in the Trust's
quarterly lease revenue under the Percentage Leases. Despite this seasonality in
revenues, all revenue is recorded as earned. The hotels located in northern
Arizona and California historically experience their most profitable periods
during the second and third fiscal quarters (the summer season), providing some
balance to the general seasonality of the hotel business.


Advisory Agreement and MARA

     The Partnership was a party to an Advisory Agreement with MARA pursuant to
which the Partnership received certain investment advisory and administrative
services regarding the day-to-day investment operations of the Hotels and
pursuant to which MARA was responsible for providing the Partnership and the
Trust with a continuing and suitable investment program. The Advisory Agreement
was terminated as of January 1, 1999.


     To terminate the Advisory Agreement the Partnership paid $256,500 in
February 1999 ($225,000 repayment of principal plus $31,500 of accrued interest)
and on February 1, 2000 was obligated to pay $240,750 ($225,000 repayment of
principal plus $15,750 of accrued interest) to satisfy two promissory notes
which were originally issued by Mr. Wirth and his wife when they acquired MARA
in January 1998. Additionally, in fiscal 1999, the Partnership issued 67,000
Class B limited partnership units to MARA and MARA forgave $85,331 in net
liabilities in exchange for the termination of the Advisory Agreement.

     Pursuant to the Advisory Agreement, MARA received, subject to certain
limitations, (a) a monthly fee equal to 1/12th of 1% of the appraised value of
the total assets of the Partnership during the next preceding month; (b) 15% of
the commitment fees received by the Partnership for any stand-by or gap
commitment relating to a mortgage loan which is not closed; and (c) an incentive
fee equal to 10% of the amount, if any, by which the net profits of the
Partnership exceed 8% of the monthly average net worth of the Partnership for
the year, plus 10% of the net realized capital gains of the Partnership for such
year less accumulated net realized capital loss. MARA was required to refund to
the Partnership the amount, if any, by which the operating expenses of the
Partnership in any fiscal year exceed the lesser of (x) 1 1/2% of the appraised
value of the total assets of the Partnership for such fiscal year or (y) 25% of
the net income of the Partnership for such fiscal year. For the twelve months
ended January 31, 1999, the Partnership paid MARA $364,041 for advisory and
management services pursuant to the Advisory Agreement.


Financial Information

     See "Item 6 -- Selected Financial Data" herein for information regarding
the Trust's revenues, net (loss) and total assets.


Item 2.  PROPERTIES.
         -----------

     The Trust maintains its administrative offices at the InnSuites Hotels
Centre in Phoenix, Arizona. The Trust directly owns no real property. At January
31, 2000, the Partnership owned, directly or indirectly, ten hotels. All of the
Hotels are operated as InnSuites(R) Hotels, while three are also marketed as
Best Western(R) Hotels and one is also marketed as a Holiday Inn(R) Hotel and
Suites. All of the Hotels are managed by the Management Company and operate in
the following locations:

                                      -6-
<PAGE>

<TABLE>
<CAPTION>

                                                       NUMBER       YEAR OF CONSTRUCTION/      MOST RECENT
PROPERTY                                             OF SUITES            ADDITION             RENOVATION
--------                                             ----------     ---------------------      -----------
<S>                                                    <C>                    <C>              <C>

InnSuites Hotels
Phoenix Best Western.............................      123                     1980             1996

InnSuites Hotels Tempe/
Phoenix Airport/South Mountain...................      170                1982/1985             1996

InnSuites Hotels Tucson,
Catalina Foothills Best Western .................      159                1981/1983             1996

InnSuites Hotels
Yuma Best Western................................      166                1982/1984             1996

Holiday Inn Airport Hotel and
Suites/Ontario(an InnSuites Hotel) ..............      150                     1990             1996

InnSuites Hotels Flagstaff/
Grand Canyon.....................................      134                1966/1972             1997

InnSuites Hotels Scottsdale/
El Dorado Park Resort ...........................      134                     1980             1996

InnSuites Hotels Tucson St. Mary's...............      297                1960/1971             1997

InnSuites Hotels San Diego.......................      147                1946/1989             1998

InnSuites Hotels Buena Park......................      185                1972/1980             1998
                                                     -----
Total suites                                         1,665
                                                     =====
</TABLE>

See "Item 7 - Management's Discussion and Analysis of Financial Condition and
Results of Operations" herein for a discussion of occupancy rates at the Hotels.

See "Item 8 - Financial Statements and Supplementary Data" herein for a
discussion of mortgages encumbering the Hotels.

Item 3.  LEGAL PROCEEDINGS.
         ------------------

     The Trust is not a party, nor are its properties subject to, any material
litigation or environmental regulatory proceedings.


Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
          ----------------------------------------------------

     There were no matters submitted to a vote of security holders during the
fourth fiscal quarter ended January 31, 2000.


                                    PART II
                                    -------

Item 5.   MARKET FOR THE TRUST'S SHARES AND RELATED SECURITY HOLDER MATTERS.
          ------------------------------------------------------------------

     Until February 23, 1999, the Trust's Shares of Beneficial Interest were
traded on the New York Stock Exchange under the symbol "IHT". Since April 7,
1999, the Trust's Shares of Beneficial Interest have been traded on the American
Stock Exchange under the symbol "IHT". On May 10, 2000, the Trust had 2,511,157
shares outstanding and 579 holders of record.

     The following table sets forth, for the periods indicated, the high and low
sales prices of the Trust's Shares of Beneficial Interest, as quoted by the
American or New York Stock Exchange, as well as dividends declared thereon:

                                      -7-
<PAGE>

   Fiscal Year 2000        High      Low     Dividends
   ----------------        ----      ---     ---------

       First Quarter       3 1/16    2 1/4      --
       Second Quarter      3 1/8     2 5/16     --
       Third Quarter       2 15/16   2         .01
       Fourth Quarter      2 7/8     1 3/4     .01


   Fiscal Year 1999        High      Low     Dividends
   ----------------        ----      ---     ---------

       First Quarter       4 3/8     4 1/16     --
       Second Quarter      5 3/8     4 1/4      --
       Third Quarter       5 1/2     3 13/16   .10
       Fourth Quarter      3 15/16   2 15/16    --


     The Trust intends to maintain a conservative dividend policy to facilitate
internal growth. In fiscal 2000, the Trust paid dividends of $.01 in the third
and fourth quarters. In fiscal 1999, the Trust paid a dividend in the third
quarter of $.10 and in fiscal 1998, the Trust paid dividends of $.10 and $.05 in
the first and second quarters, respectively. Since its organization in 1971, the
Trust has paid a dividend or dividends each year.


Item 6.  SELECTED FINANCIAL DATA.
         -----------------------

     The following selected financial data of the Trust for the five fiscal
years ended January 31, 2000, has been derived from the audited consolidated
financial statements of the Trust. The consolidated financial statements of the
Trust for the three fiscal years ended January 31, 1998 were audited by Arthur
Andersen LLP, independent public accountants. The consolidated financial
statements of the Trust for the two fiscal years ended January 31, 2000 were
audited by KPMG LLP, independent public accountants. All of the data should be
read in conjunction with the respective consolidated financial statements and
related notes included herein.

<TABLE>
<CAPTION>
                         2000          1999          1998         1997          1996
<S>                  <C>           <C>           <C>           <C>          <C>
Total revenues       $ 9,546,181   $ 9,909,758   $ 1,421,979   $3,915,506   $ 5,430,006

Net loss             $  (951,811)  $  (193,071)  $  (573,509)  $ (888,365)  $(7,554,351)

Loss
per share-basic
and diluted          $      (.40)  $      (.10)  $      (.56)  $     (.87)  $     (7.40)

Cash dividends
paid and declared
per share            $       .02   $       .10   $       .15   $      .40   $       .50

Total assets         $65,305,519   $67,804,770   $43,619,639   $6,416,123   $24,555,330

Bank and other
borrowings           $38,746,662   $36,924,834   $22,428,880   $2,300,000   $10,795,000
</TABLE>


See "Item 1 - Business - Historical Operations and the Formation Transactions"
herein for a discussion of the change in the nature of the business of the
Trust.

                                      -8-
<PAGE>

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.
         ---------------------------------------------------------------

GENERAL

     The following discussion should be read in conjunction with the InnSuites
Hospitality Trust consolidated financial statements and notes thereto and the
InnSuites Hotels, Inc. financial statements and notes thereto appearing
elsewhere in this annual report.

     The Trust is a real estate investment trust which owns the sole general
partner interest in the Partnership. In order for the Trust to qualify as a REIT
under the Code, neither the Trust nor the Partnership can operate the Hotels.
Therefore, each of the hotels is leased to, and operated by, the Lessee pursuant
to a Percentage Lease. Each Percentage Lease obligates the Lessee to pay rent
equal to the greater of a minimum rent or a percentage rent based on the gross
revenues of each hotel. The Lessee also holds the franchise agreement for each
hotel. The Lessee is owned 9.8% by InnSuites Innternational Hotels, Inc., an
entity owned by James F. Wirth and his wife. The Trust's principal source of
cash flows is distributions from the Partnership, which are dependent upon lease
payments from the Lessee pursuant to the Percentage Leases. The Lessee's ability
to make payments to the Partnership pursuant to the Percentage Leases is
dependent primarily upon the operations of the Hotels.

     The Trust's Management intends to restructure and acquire the Lessee in
January 2001 following the guidelines of the REIT Modernization Act.

     At January 31, 2000, the Trust owned a 44.9% interest in the Hotels
through its sole general partner's interest in the Partnership. This change in
ownership resulted primarily from the following transactions occuring between
February 1, 1999 and April 2, 1999:

     On March 15, 1999, the Trust purchased 1 million additional general partner
     units in the Partnership for $2 million. This transaction was fully funded
     by Mr. Wirth who provided an unsecured loan to the Trust at 7% interest
     payable annually beginning March 15, 2000. The unpaid principal balance and
     accrued interest is due on March 15, 2004.

     On April 2, 1999, the Partnership made an unsecured loan to the Trust in
     the amount of $2.6 million. Annual interest only payments are due on March
     1 of each year and are based on a 7% interest rate. The unpaid principal
     balance is due at maturity on April 2, 2006. The Trust used the proceeds of
     that loan to purchase 1.3 million general partner units in the Partnership.
     The money lent by the Partnership was generated by refinancing the Northern
     Phoenix hotel and borrowing an additional $1.8 million that was secured by
     a mortgage on that property. The original mortgage note was restructured to
     match the terms of the refinanced note, which bears interest at 8.25% and
     matures on April 1, 2014. Monthly principal and interest payments began on
     April 1, 1999.

     As of April 2, 1999, the Trust transferred, at historical cost, its
     interest in the Scottsdale property to the Partnership (approximately $7
     million) in exchange for 1.6 million general partner units.

     As a result of the aforementioned transactions, the Trust increased its
     ownership interest in the Partnership from approximately 18% to
     approximately 42% as of April 2, 1999.

     The expenses of the Trust consist primarily of property taxes, insurance,
corporate overhead, interest on mortgage debt and depreciation of the Hotels.
Under the terms of its Partnership Agreement, the Partnership is required to
reimburse the Trust for all such expenses. The Percentage Leases provide for the
payment of base rent and percentage rent. For the year ended January 31, 2000,
base rent and percentage rent in the aggregate amount of $9.5 million was earned
by the Trust. The

                                      -9-
<PAGE>

principal determinant of percentage rent is the Lessee's room revenues at the
Hotels, as defined by the Percentage Leases. Therefore, management believes that
a review of the historical performance of the operations of the Hotels,
particularly with respect to occupancy, average daily rate ("ADR"), calculated
as total room revenue divided by number of rooms sold, and revenue per available
room, calculated as total room revenue divided by number of rooms available
(known as "REVPAR"), is appropriate for understanding revenue from the
Percentage Leases. ADR increased $0.81 to $67.70 in fiscal year 2000 from $66.89
in fiscal 1999 due to an overall market increase in room rates. Occupancy
decreased 1.0% to 59.8% in fiscal 2000 from 60.8% in fiscal year 1999 due to
increased supply exceeding demand growth. This resulted in a decrease in REVPAR
of $0.19 to $40.46 in fiscal 2000 from $40.65 in fiscal 1999. ADR improved in
fiscal 1999 due to acquisitions in fiscal 1999 and the successful repositioning
of those hotels as studio and two room suite hotels that contribute more revenue
per available room. While ADR increased $1.22 to $66.89 in 1999 from $65.67 in
1998, occupancy increased 1.9% in 1999 to 60.8% from 58.9% due to increased
occupancy rates in our California properties complimenting slight declines in
occupancy at our Arizona properties. This resulted in an increase in REVPAR of
$1.95 for the twelve months ended January 31, 1999.

     The following table shows certain historical financial and other
information for the periods indicated.

                                            For the Year Ended
                                                January 31,
                                        --------------------------
                                         2000      1999      1998
                                        ------    ------    ------
Occupancy                                59.80%    60.80%    58.90%
Average Daily Rate (ADR)                $67.70    $66.89    $65.67
Revenue Per Available Room (REVPAR)     $40.46    $40.65    $38.70

     No assurance can be given that the trends reflected in this data will
continue or that Occupancy, ADR and REVPAR will not decrease as a result of
changes in national or local economic or hospitality industry conditions.


Results of Operations of the Trust for the year ended January 31, 2000 compared
to the year ended January 31, 1999

     Results of operations for the Trust for the fiscal year ended January 31,
2000 reflect a full-year of operations of the Hotels and the fiscal year ended
January 31, 1999 reflects a full-year of operations of the Initial Hotels as
well as a partial-year of operations for the Tucson St. Mary's, Buena Park and
San Diego hotels.

     For the twelve months ended January 31, 2000, the Trust had total revenues
of $9.5 million compared to $9.9 million for the twelve months ended January 31,
1999, a decrease of approximately $400,000 or 3.7% due primarily to the change
in rent formulas effective August 1, 1999. Total expenses of $11.6 million for
the twelve months ended January 31, 2000 increased $1.5 million compared to
total expenses of $10.1 million for the twelve months ended January 31, 1999.
The 14.3% increase in total expenses was primarily due to charges to expense of
approximately $575,000 for deferred expenses related to a withdrawn public
offering and a $1.9 million provision for uncollected rents receivable which was
partially offset by a $780,000 loss on the termination of the Advisory Agreement
in fiscal 1999.

     General and administrative expenses include overhead charges for
management, accounting, shareholder and legal services for the Trust. In
comparing general and administrative expenses for the twelve months ended
January 31, 2000 and 1999, these expenses increased $1.5 million to $4.2 million
in fiscal 2000 from $2.7 million in fiscal 1999. This 54.5% increase was
primarily due to charges to expense of approximately $575,000 for deferred
expenses relating to a withdrawn public offering and a $1.9 million provision
for uncollected rents receivable from the Lessee. These were offset by decreases
primarily relating to MARA fees of approximately $364,000 and the loss of
approximately $499,000 for the termination of the MARA agreement in fiscal year
1999.

                                      -10-
<PAGE>

     Total interest expense increased by $544,000 or 19.5% to $3.3 million from
$2.8 million in comparing the twelve months ended January 31, 2000 and January
31, 1999, respectively. Interest on mortgage notes payable increased
approximately $200,000 or 10% to $2.1 million from $1.9 million due to increased
mortgage debt related to the acquisition of the Buena Park and San Diego
properties during fiscal 1999 and net additional borrowings of approximately
$2.3 million during fiscal 2000 for the loan modification relating to the
Northern Phoenix property and the refinancing of the San Diego property.
Interest on notes payable to banks increased by 52.8% or approximately $338,000
to $977,000 from $639,000 due to a full years interest in fiscal 2000 on the $12
million credit facility obtained in fiscal 1999, which bears a variable interest
rate. Interest on notes payable to related parties increased 4.6% or
approximately $10,000 to $214,000 from $204,000 due to additional loans of
$956,000 (net of payments) from James F. Wirth, current Chairman, President and
Chief Executive Officer of the Trust.

     Real estate and personal property taxes, insurance and ground rent
increased approximately $200,000 or 16.4% to $1.4 million from $1.2 million in
comparing the twelve months ended January 31, 2000 and 1999, respectively. Real
estate and personal property taxes and property insurance increased $145,000
primarily due to the acquisition of the Buena Park and San Diego properties
during fiscal 1999 resulting in a full year of expenses in fiscal 2000 compared
to 9 months of expense for San Diego and 8 months of expense for Buena Park in
fiscal 1999.

     Real estate depreciation for the twelve months ended January 31, 2000
compared to 1999 increased approximately $350,000 or 15.9% to $2.5 million from
$2.2 million, respectively. Of the $350,000 increase, approximately $184,000 was
due to the Trust's acquisitions of the Buena Park and San Diego properties
resulting in a full year of depreciation in fiscal year 2000. The remaining
$166,000, resulted primarily from an increase in capitalized refurbishment costs
in the current year.

     The Trust had a loss before minority interest of $2.0 million for the
twelve months ended January 31, 2000, a $1.8 million increase from the loss
of $200,000 in the prior year. After deducting the loss allocated to the
minority interest of $1.1 million, the Trust had a net loss attributable to
shares of beneficial interest of approximately $952,000. This represented an
increase in net loss of $759,000 attributable to shares of beneficial interest
comparing the twelve months ended January 31, 2000 and 1999. The results for the
fiscal year ended January 31, 2000 included the recognition of a provision for
uncollectible receivables of $1.9 million, and a charge of approximately
$575,000 resulting from withdrawing a public offering. Basic and diluted net
loss per share was $(0.40) for the twelve months ended January 31, 2000 compared
to $(0.10) for 1999. Without considering the effect of the aforementioned
charges, the Trust would have reported net income of approximately $23,000 and
basic earnings per share of $0.01.


Results of Operations of the Trust for the year ended January 31, 1999 compared
to January 31, 1998

     During the fiscal year ended January 31, 1998, the Trust terminated its
previous wrap-around mortgage business and disposed of its final real estate
asset, an office building in Chicago which was sold in the third quarter of
fiscal 1998. As a result of a change in investment focus, the Trust indirectly
acquired the seven Initial Hotels on January 31, 1998.

     Results of operations for the Trust for the fiscal year ended January 31,
1999 reflected one full-year of operations of the Initial Hotels, plus
additional full- or partial-year operations of the three hotels acquired during
fiscal 1999.

     Total revenues of the Trust for the twelve months ended January 31, 1999
was $9.9 million in its first full-year of operations. Of this revenue, rent
revenue from the Hotels represented 99% of total revenue. Included in this
amount was rent revenue attributable to the Scottsdale hotel of $699,997.
Interest income for the period was $23,750.

                                      -11-
<PAGE>

     For the fiscal year ended January 31, 1999, the Trust reported a net loss
of approximately $193,000 or $(0.10) per share. For the fiscal year ended
January 31, 1998, the Trust reported a net loss of approximately $574,000 or
$(0.56) per share.

     While the revenues of the Trust increased significantly to $9.9 million for
the fiscal year ended January 31, 1999 from $1.4 million for the fiscal year
ended January 31, 1998 the Trust reported a net loss of approximately $193,000.
That total net loss, however, was reduced from a net loss of approximately
$574,000 in fiscal 1998. The results for the fiscal year ended January 31, 1999
included multiple fourth quarter charges, resulting from the recognition of a
provision for uncollectible receivables ($900,000), a net charge recognized upon
the termination of the Advisory Agreement between the Partnership and MARA
($499,000), and the recognition of expenses relating to stock options
($184,000). In addition, unusual legal and professional fees are included in
fiscal 1999 expenses. Without the aforementioned fourth quarter charges, the
Trust's earnings per share for the fiscal year ended January 31, 1999 would have
improved by $0.16 per share to a net income of $0.06 per share (basic) for the
year.





                                      -12-
<PAGE>

Results of Operations of the Lessee

Comparison of actual results for the year ended January 31, 2000 compared to
1999

     Results of operations for the Lessee for the fiscal year ended January 31,
2000 reflect a full-year of operations of the Hotels and the fiscal year ended
January 31, 1999 reflects a full-year of operations of the Initial Hotels as
well as a partial-year of operations for the Tucson St. Mary's, Buena Park and
San Diego hotels.

     Total revenues for the Lessee increased 2.4% or approximately $630,000 to
$27.3 million from $26.7 million for the twelve months ended January 31, 2000
and 1999, respectively. Room revenues increased 3.3% or approximately $805,000
to $25.1 million from $24.3 million due to the addition of the California
properties and from sharp increases in room revenues at the Tucson St Mary's
Arizona property due to increased occupancy and ADR for the year ended January
31, 2000, which was partially offset by the other six Arizona properties' room
revenues slightly declining due to decreased occupancy rates. Food and beverage
revenues increased 6.9% or approximately $112,000 to $1.7 million from $1.6
million primarily due to increased occupancy rates at the Ontario, California
and Tucson St. Mary's Arizona properties, which feature full service
restaurants. Telecommunications revenue declined 24.9% or approximately $115,000
to $346,000 from $461,000 for the twelve months ended January 31, 2000 and 1999,
respectively, primarily due to decreased long-distance rates charged by the
various long distance carriers. Other revenue decreased 57.4% or approximately
$167,000 to $124,000 from $291,000 for the 12 months ended January 31, 2000
compared with the period ended January 31, 1999, respectively, primarily due to
an increase in amenities that were previously charged to guests in the prior
year.

     Total expenses decreased 2.0% or approximately $592,000 to $29.5 million
from $30.0 million for the twelve months ended January 31, 2000 compared to the
twelve months ended January 31, 1999, respectively.

     Guest room expense decreased by 13.9% or approximately $1.1 million to $6.7
million from $7.8 million for the 12 months ended January 31, 2000 and 1999,
respectively, primarily due to management's programs to increase efficiency and
reduce costs associated with housekeeping.

     Food and beverage expense increased 15.4% or approximately $218,000 to $1.6
million from $1.4 million for the 12 months ended January 31, 2000 compared to
the twelve months ended January 31, 1999. The increase is attributable to the
increased room revenue and the addition of room service at all 10 of the Hotel
properties.

     Telecommunications expenses, which are primarily long-distance service
charges, decreased due to decreased long-distance rates charged by the various
long distance carriers. They decreased by 21.4% or approximately $106,000 for
the twelve months ended January 31, 2000 compared to the twelve months ended
January 31, 1999, respectively.

     Other expense increased greater than 100.0% or approximately $739,000 to
$878,000 from $138,000 for the twelve months ended January 31, 2000 compared to
the twelve months ended January 31, 1999, respectively, primarily due to the
write-off of certain assets that management identified as having no future
value.

     General and administrative expense decreased by 27.9% or approximately $1.1
million to $2.9 million from $4.0 million for the twelve months ended January
31, 2000 compared to the twelve months ended January 31, 1999, respectively. The
decrease is primarily attributable to large accounting and legal expenses
incurred

                                      -13-
<PAGE>

in fiscal 1999 related to the formation of the Lessee in conjunction with the
formation of the Trust.

     Sales and marketing expense was consistent with the prior year.

     Repairs and maintenance increased 50.6% or approximately $681,000 to $2.0
million from $1.3 million for the twelve months ended January 31, 2000 compared
with the twelve months ended January 31, 1999, respectively. The increase is due
to a focused effort by management to maintain the quality of the Hotels and
increase repeat business as a result of guest satisfaction.

     Hospitality expenses increased 28.7% or approximately $345,000 to $1.6
million from $1.2 million for the twelve months ended January 31, 2000 compared
with the twelve months ended January 31, 1999, respectively, primarily due to
increased hospitality programs in fiscal year 2000 over fiscal year 1999.

     Percentage rent decreased 4.6% or approximately $461,000 to $9.5 million
from $10.0 million for the twelve months ended January 31, 2000 compared with
the twelve months ended January 31, 1999, respectively, primarily due to an
amendment of the calculation of rent payable under the Percentage Leases
effective August 1, 1999.

     While total revenues increased 2.4% in fiscal 2000 compared to fiscal 1999,
total expenses decreased by 2.3% or approximately $681,000 for the twelve months
ended January 31, 2000 compared with the twelve months ended January 31, 1999,
respectively, reflecting management's effort to reduce costs and maintain a high
ADR.


Liquidity and Capital Resources

     The Trust, through its ownership interest in the Partnership, will have its
proportionate share of the benefits and obligations of the Partnership's
ownership interests in the Hotels. The Trust's principal sources of cash to meet
its cash requirements, including distributions to its shareholders, is its share
of the Partnership's cash flow. The Partnership's principal source of revenue is
rent payments under the Percentage Leases. The Lessee's obligations under the
Percentage Leases are unsecured and its ability to make rent payments to the
Partnership under the Percentage Leases, and the Trust's liquidity, including
its ability to make distributions to its shareholders, will depend upon the
ability of the Lessee to generate sufficient cash flow from hotel operations.
During fiscal 2000 and 1999, the Trust recorded $1.9 million and $900,000,
respectively, as provisions for uncollectible receivables. These charges reflect
the Trust's assessment of the collectability of its receivables which primarily
consists of rent receivable from the Lessee, based on an evaluation of the
Lessee's future cash flows. The Trust's management may restructure and acquire
the Lessee in January 2001 following the guidelines of the REIT Modernization
Act.

     As of January 31, 2000, the Trust has no commitments for capital
expenditures beyond a 4% reserve for refurbishment and replacements set aside
annually, described below.

     The Trust intends to acquire and develop additional hotels and expects to
incur indebtedness to fund those acquisitions and developments. The Trust may
also incur indebtedness to meet distribution requirements imposed on a REIT
under the Code to the extent that working capital and cash flow from the Trust's
investments are insufficient to make the required distributions. The terms of
the line of credit discussed below permit borrowings for that purpose, but
impose certain limitations on the Trust's ability to engage in other borrowings.

     On April 16, 1998, the Trust obtained a $12 million Credit Facility (the
"Credit Facility") from Pacific Century Bank to assist it in its funding of the
acquisition and development of additional hotels and for certain other business
purposes. Borrowings under the Credit Facility are secured by first mortgages on
three of the Hotels. The Trust has drawn $11.3 million from its line of credit,
which charges interest at a variable interest rate. By its terms, the Credit
Facility will expire in approximately one year on April 16, 2001, subject to
renewal. The terms of the Credit Facility require the Trust to maintain a net
worth (combined with minority interest) of not less than $15 million and, as of
the end of each fiscal quarter, maintain a debt to net worth ratio of not
greater than 1.50

                                      -14-
<PAGE>

to 1.0, a net operating income to debt service relating to encumbered properties
ratio of not less than 1.30 to 1.0, and a net operating income to debt service
ratio of not less than 1.25 to 1.0. The Trust may prepay the Credit Facility,
subject to a prepayment penalty of $250 plus a yield-maintenance penalty. During
the term of the Credit Facility the Trust may not further encumber its
collateral, sell its collateral, change the nature of its business, or
unreasonably suspend its business. At January 31, 2000, the Trust was not in
compliance with certain covenant requirements associated with the Credit
Facility; however, the Trust obtained a waiver from the lender indicating that
the debt would not be called as a result of defaults occurring through January
31, 2000. Subsequent to January 31, 2000, the Trust negotiated a change in the
covenant covering "Debt to Tangible Net Worth" from 1.5 to 1.75. As a result,
the Trust is in compliance with all covenants subsequent to January 31, 2000.


     The Trust may seek to increase the amount of its Credit Facility, negotiate
additional credit facilities, or issue debt instruments. Any debt incurred or
issued by the Trust may be secured or unsecured, long-term, medium-term or
short-term, bear interest at a fixed or variable rate and be subject to such
other terms as the Trust considers prudent.

     The Trust will acquire or develop additional hotels only as suitable
opportunities arise, and the Trust will not undertake acquisition or
redevelopment of properties unless adequate sources of financing are available.
Funds for future acquisitions or development of hotels are expected to be
derived, in whole or in part, from borrowings under the Credit Facility or other
borrowings or from the proceeds of additional issuances of Shares of Beneficial
Interest or other securities. There is no agreement or understanding to invest
in any other properties, and there can be no assurance that the Trust will
successfully acquire or develop additional hotels.

     The Partnership will contribute to a Capital Expenditures Fund (the "Fund")
on a continuing basis, from the rent paid under the Percentage Leases, an amount
equal to 4% of the Lessee's revenues from operation of the Hotels. The Fund is
intended to be used for capital improvements to the Hotels and refurbishment and
replacement of furniture, fixtures and equipment, in addition to other uses of
amounts in the Fund considered appropriate from time to time. The Partnership
anticipates making similar arrangements with respect to future hotels that it
may acquire or develop. During fiscal years ended January 31, 2000 and 1999, the
Hotels spent approximately $1.5 million and $2.3 million, respectively, for
capital expenditures, excluding hotel acquisitions. The Trust considers the
majority of these improvements to be revenue-producing. Therefore, these amounts
have been capitalized and are being depreciated over their estimated useful
lives. The Hotels also spent $2.0 million and $1.3 million, respectively, during
fiscal years 2000 and 1999 on repairs and maintenance and these amounts have
been charged to expense as incurred.


Inflation

     The Trust's revenues are based on the Percentage Leases, which will result
in changes in the Trust's revenues based on changes in the underlying Hotel
revenues. Therefore, the Trust will be relying entirely on the performance of
the Hotels and the Lessee's ability to increase revenues to keep pace with
inflation. Operators of hotels in general, and the Lessee in particular, can
change room rates quickly, but competitive pressures may limit the Lessee's
ability to raise rates faster than inflation.

     The Trust's largest fixed expense is the depreciation of the investment in
hotel properties. The Trust's variable expenses, which are subject to inflation,
represented approximately 59.4% of total revenues in fiscal 2000. These variable
expenses (general and administrative costs, as well as real estate and personal
property taxes, property and casualty insurance and ground rent) are expected to
grow with the general rate of inflation.

                                      -15-
<PAGE>

Seasonality

     The Hotels' operations historically have been seasonal. The six southern
Arizona hotels experience their highest occupancy in the first fiscal quarter
and, to a lesser extent, the fourth fiscal quarter. The second fiscal quarter
tends to be the lowest occupancy period at those six southern Arizona hotels.
This seasonality pattern can be expected to cause fluctuations in the Trust's
quarterly lease revenue under the Percentage Leases. The hotels located in
northern Arizona and California historically experience their most profitable
periods during the second and third fiscal quarters (the summer season),
providing some balance to the general seasonality of the hotel business. To the
extent that cash flow from operations is insufficient during any quarter,
because of temporary or seasonal fluctuations in lease revenue, the Trust may
utilize other cash on hand or borrowings to make distributions to its
shareholders. No assurance can be given that the Trust will make distributions
in the future.

Year 2000 Compliance

     The Trust and the Lessee have upgraded their computer accounting programs
and the Lessee upgraded its computerized property management system along with
necessary hardware. The new systems have been warranted to be Year 2000
compliant. The Trust incurred total costs to date of approximately $140,000
to upgrade these systems.

     While these new systems represent virtually all of the Trust's computer
systems, the Trust and the Lessee cannot predict the effect of the Year 2000
problem on vendors, customers and other entities with which the Trust and the
Lessee transact business, and there can be no assurance that the effect of the
Year 2000 problem on such entities will not adversely affect the Trust's or the
Lessee's operations.

     Although the Trust is not aware of any threatened claims related to the
Year 2000, the Trust may become subject to litigation arising from such claims,
and depending on the outcome, such litigation could have a material adverse
effect on the Trust. It is not clear whether the Trust's insurance coverage
would be adequate to offset these and other business risks related to the Year
2000.

     In the event of any failure of any of the computer systems, the Trust and
the Lessee intend to perform necessary functions without the aid of the affected
computer systems until any Year 2000 problems are resolved.

     As of May 10, 2000, no computer or software problems relating to the year
2000 have been discovered. However, problems relating to the Year 2000 could
still arise.


Forward-Looking Statements

     Certain statements in this Annual Report constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Trust intends that such
forward-looking statements be subject to the safe harbors created by such Acts.
Those forward-looking statements include statements regarding the intent, belief
or current expectations of the Trust, its Trustees or officers in respect of (i)
the declaration or payment of dividends; (ii) the leasing, management or
operation of the Hotels; (iii) the adequacy of reserves for renovation and
refurbishment; (iv) the Trust's financing plans; (v) the Trust's position
regarding investments, acquisitions, financings, conflicts of interest and other
matters; (vi) the Trust's continued qualification as a REIT; and (vii) trends
affecting the Trust's or any hotel's financial condition or results of
operations. The words and phrases "looking ahead", "we are confident", "should
be", "will be", "predicted", "believe", "expect", "anticipate" and similar
expressions identify forward-looking statements.

     These forward-looking statements reflect the Trust's current views in
respect of future events and financial performance, but are subject to many
uncertainties and factors relating to the operations and business environment of
the Hotels which may cause the actual results of the Trust to differ materially
from any future results expressed or implied by such forward-looking statements.
Examples of such uncertainties include, but are not limited to, fluctuations in
hotel occupancy

                                      -16-
<PAGE>

rates; changes in room rental rates which may be charged by the Lessee in
response to market rental rate changes or otherwise; interest rate fluctuations;
changes in Federal income tax laws and regulations; competition; any changes in
the Trust's financial condition or operating results due to acquisitions or
dispositions of hotel properties; real estate and hospitality market conditions;
hospitality industry factors; and local or national economic and business
conditions, including, without limitation, conditions which may affect public
securities markets generally, the hospitality industry, or the markets in which
the Trust operates. The Trust does not undertake any obligation to update
publicly or revise any forward-looking statements whether as a result of new
information, future events or otherwise. Pursuant to Section 21E(b)(2)(E) of the
Exchange Act, the qualifications set forth hereinabove are inapplicable to any
forward-looking statements in this Annual Report relating to the operations of
the Partnership.


Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
         ----------------------------------------------------------

     The Trust is exposed to interest rate risk primarily as a result of its
mortgage notes payable, notes payable to banks and other notes payable. The
proceeds from these loans were used to maintain liquidity, fund capital
expenditures and expand the Trust's real estate investment portfolio and
operations. The Trust's interest rate risk management objective is to limit the
impact of interest rate changes on earnings and cash flows and to lower its
overall borrowing costs. To achieve its objectives, the Trust borrows using
fixed rate debt, when possible. The Trust could enter into derivative financial
instruments such as interest rate swaps, caps and treasury locks in order to
mitigate its interest rate risk on a related financial instrument. To date, the
Trust has not entered into any such derivative transactions.

     The Trust's interest rate risk is monitored using a variety of techniques.
The table below presents the principal amounts, weighted average interest rates,
fair value and other terms required, by year of expected maturity, in order to
evaluate the expected cash flows and sensitivity to interest rate changes.


<TABLE>
<CAPTION>


                                                       Fiscal
                                   --------------------------------------------------
      Debt Type                    2001        2002       2003        2004       2005      Thereafter   Total(1)      Fair Value
      ---------                    ----        ----       ----        ----       ----      ----------   --------      ----------
<S>                          <C>          <C>            <C>        <C>       <C>          <C>          <C>           <C>
Fixed rate debt(2)           $  550,802       810,984    775,719    846,363   6,016,948    10,081,103   19,081,919    17,285,132

Average interest rate              8.49%         8.49%      8.49%      8.49%       8.49%         8.49%        8.49%         9.25%

Variable rate debt(2)        $   75,677    15,138,878     40,158     44,536   3,170,492             -   18,469,741    18,538,285

Interest rate available
  on January 31, 2000              9.04%            -          -          -           -             -         9.04%         9.04%
</TABLE>

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

(1)  Approximately $345,000 of debt was repaid by February 11, 2000 and is not
     included in the aforementioned summary.

(2)  The fair value of fixed rate debt and variable rate debt were determined
     based on current rates offered for fixed rate debt and variable rate LIBOR
     debt with similar risks and maturities.

     The table incorporates only those exposures that exist as of January 31,
2000 and does not consider those exposures or positions which would arise after
that date. Moreover, because firm commitments are not represented in the table
above, the information presented therein has limited predictive value. As a
result, the Trust's interest rate fluctuations will depend on the exposures that
arise during the period and future interest rates.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
         --------------------------------------------

                          INNSUITES HOSPITALITY TRUST
            LIST OF CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

The following consolidated financial statements of InnSuites Hospitality Trust,
formerly Realty ReFund Trust, are included in Item 8:

                                      -17-
<PAGE>

     KPMG LLP Independent Auditors' Report;

     Arthur Andersen LLP Report of Independent Public Accountants;

     Consolidated Balance Sheets - January 31, 2000 and 1999;

     Consolidated Statements of Operations - For the Years Ended January 31,
     2000, 1999 and 1998;

     Consolidated Statements of Shareholders' Equity - For the Years Ended
     January 31, 2000, 1999 and 1998;

     Consolidated Statements of Cash Flows - For the Years Ended January 31,
     2000, 1999 and 1998; and

     Notes to the Consolidated Financial Statements - January 31, 2000, 1999 and
     1998.


The following financial statement schedule of InnSuites Hospitality Trust is
included in Item 14(a)1:

     Schedule III - Real Estate and Accumulated Depreciation.

All other schedules are omitted, as the information is not required or is
otherwise furnished.


                            INNSUITES HOTELS, INC.
                   LIST OF FINANCIAL STATEMENTS AND SCHEDULE


The following financial statements of InnSuites Hotels, Inc.:

     KPMG LLP Independent Auditors' Report;

     Michael Maastricht, CPA Report of Independent Public Accountants;

     Balance Sheets - January 31, 2000 and 1999;

     Statements of Operations - For the Years Ended January 31, 2000 and 1999;

     Statements of Shareholders' Deficit - For the Years Ended January 31, 2000
     and 1999;

     Statements of Cash Flows - For the Years Ended January 31, 2000 and 1999;
     and

     Notes to the Financial Statements - January 31, 2000 and 1999.


All other schedules are omitted, as the information is not required or is
otherwise furnished.

                                      -18-
<PAGE>

                         INDEPENDENT AUDITORS' REPORT

The Shareholders and Trustees
InnSuites Hospitality Trust:


We have audited the accompanying consolidated balance sheets of InnSuites
Hospitality Trust (an Ohio real estate investment trust) and subsidiaries (the
"Trust") as of January 31, 2000 and 1999, and the related consolidated
statements of operations, shareholders' equity and cash flows for each of the
years in the two-year period ended January 31, 2000. In connection with our
audits of the consolidated financial statements, we also audited the
accompanying financial statement schedule. These consolidated financial
statements and financial statement schedule are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedule based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of InnSuites
Hospitality Trust as of January 31, 2000 and 1999, and the results of their
operations and their cash flows for each of the years in the two-year period
ended January 31, 2000 in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.


                                     /s/ KPMG LLP


Phoenix, Arizona
May 5, 2000

                                      -19-
<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders and Trustees,
InnSuites Hospitality Trust

We have audited the accompanying consolidated statements of operations,
shareholders' equity and cash flows of InnSuites Hospitality Trust (formerly
Realty ReFund Trust) (an Ohio unincorporated business trust) and subsidiaries
for the year ended January 31, 1998. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

The statements of operations, shareholders' equity and cash flows of InnSuites
Hospitality Trust (formerly Realty Refund Trust) were prepared for the purpose
of complying with the Rules and Regulations of the Securities and Exchange
Commission.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the operations and cash flows of InnSuites Hospitality
Trust (formerly Realty ReFund Trust) for the year ended January 31, 1998 in
conformity with accounting principles generally accepted in the United States.


ARTHUR ANDERSEN LLP


Cleveland, Ohio
May 13, 1998.

                                      -20-
<PAGE>

                  INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                              JANUARY 31,
                                                                      -------------------------
                                                                      2000                 1999
                                                                      ----                 ----
<S>                                                            <C>                 <C>
                         ASSETS
Hotel Properties, net                                             $64,479,347          65,509,187
Cash and Cash Equivalents                                             208,109             420,935
Rent Receivable from Affiliate,
 net of $2,845,732 and $900,000 allowance, respectively                     -             788,179
Interest Receivable and Other Assets                                  618,063           1,086,469
                                                                  -----------          ----------
TOTAL ASSETS                                                      $65,305,519          67,804,770
                                                                  ===========          ==========

                       LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES:
Mortgage Notes Payable                                            $24,251,662          23,161,052
Notes Payable to Banks                                             11,300,000          11,300,000
Other Notes Payable                                                   225,000             450,000
Loans Payable to Related Parties                                    2,970,000           2,013,782
Accounts Payable and Accrued Expenses                               1,138,168           2,188,709
                                                                  -----------          ----------
TOTAL LIABILITIES                                                  39,884,830          39,113,543

MINORITY INTEREST IN PARTNERSHIP                                   16,789,423          21,111,192

SHAREHOLDERS' EQUITY:
 Shares of beneficial interest without par value; unlimited
   authorization; 2,507,949 and 2,286,951  shares issued
   and outstanding in 2000 and 1999, respectively                   9,093,020           7,580,035
 Treasury Stock                                                      (461,754)                  -
                                                                  -----------          ----------
TOTAL SHAREHOLDER'S EQUITY                                          8,631,266           7,580,035
                                                                  -----------          ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                        $65,305,519          67,804,770
                                                                  ===========          ==========
</TABLE>

Commitments and Contingencies (notes 14, 18 and 19)






                           See accompanying notes to
                       consolidated financial statements

                                      -21-
<PAGE>

                  INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                  YEARS ENDED JANUARY 31,
                                                             2000             1999            1998
                                                          -----------     -----------     -----------
<S>                                                       <C>             <C>             <C>
REVENUES:
 Rent revenue from affiliate                              $ 9,503,041       9,886,008             -
 Rental revenue from real estate held for sale                      -               -     1,367,366
 Interest and other income                                     43,140          23,750        54,613
                                                          -----------     -----------     ---------
TOTAL REVENUES:                                           $ 9,546,181       9,909,758     1,421,979
                                                          -----------     -----------     ---------

EXPENSES:
 Real estate depreciation                                 $ 2,546,381       2,196,797             -
 Real estate, personal property taxes, insurance
  and ground rent                                           1,421,646       1,221,255             -
 General and administrative                                 4,247,063       2,748,623             -
 Loss on sale of real estate                                        -               -        35,620
 Loss on termination of advisory agreement                          -         780,746             -
 Interest on mortgage notes payable                         2,150,144       1,952,661             -
 Interest on notes payable to bank                            976,861         639,278             -
 Interest on note payable to related party                    213,563         204,145       118,082
 Fees to related party investment advisor                           -         364,041             -
 Legal expense to related party                                     -           2,400        84,000
 Operating expenses of real estate held for sale                    -               -     1,379,389
 Amortization of tenant improvements and
  deferred leasing commissions                                      -               -        21,724
 Other operating expenses                                           -               -       356,673
                                                          -----------     -----------     ---------
TOTAL EXPENSES:                                            11,555,658      10,109,946     1,995,488
                                                          -----------     -----------     ---------

LOSS BEFORE MINORITY INTEREST                              (2,009,477)       (200,188)     (573,509)
                                                          -----------     -----------     ---------

LESS: MINORITY INTEREST                                    (1,057,666)         (7,117)            -
                                                          -----------     -----------     ---------
NET LOSS                                                  $  (951,811)       (193,071)     (573,509)
                                                          ===========     ===========     =========
NET LOSS PER SHARE - (Basic and diluted)                  $      (.40)           (.10)         (.56)
                                                          ===========     ===========     =========
WEIGHTED AVERAGE NUMBER OF SHARES
 OUTSTANDING - (Basic and diluted)                          2,376,770       1,921,902     1,022,359
CASH DIVIDENDS PER SHARE                                  $       .02     $       .10     $     .15
                                                          ===========     ===========     =========
</TABLE>

                           See accompanying notes to
                       consolidated financial statements

                                      -22-
<PAGE>

                  INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED JANUARY 31, 2000, 1999 AND 1998


BALANCE, JANUARY 31, 1997                               $3,251,220
Net loss                                                  (573,509)
Issuance of shares                                       3,074,348
Dividends                                                 (153,088)
                                                        ----------
BALANCE, JANUARY 31, 1998                                5,598,971
Debt converted to equity                                 2,646,690
Stock option plan                                          183,518
Net loss                                                  (193,071)
Dividends                                                 (166,781)
Reallocation of minority interest                         (489,292)
                                                        ----------
BALANCE, JANUARY 31, 1999                                7,580,035
Stock option plan                                           57,400
Net loss                                                  (951,811)
Dividends                                                  (52,889)
Purchase of treasury stock                                (461,754)
Reallocation of minority interest                        2,460,285
                                                        ----------
BALANCE, JANUARY 31, 2000                               $8,631,266
                                                        ==========


                           See accompanying notes to
                       consolidated financial statements

                                      -23-
<PAGE>

                  INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                     YEARS ENDED JANUARY 31,
                                                                            2000              1999              1998
                                                                        -----------        -----------       ----------
<S>                                                                    <C>                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                             $   (951,811)         (193,071)         (573,509)
  Adjustments to reconcile net (loss) to net cash
     provided by (used in) operating activities:
     Stock compensation expense                                              57,400           183,518                 -
     Non-cash portion of loss on termination of advisory agreement                -           498,669                 -
     Provision for uncollectible rent receivable from affiliate           1,945,732           900,000
     Minority interest                                                   (1,057,666)           (7,117)                -
     Real estate depreciation                                             2,546,381         2,196,797                 -
     Amortization of tenant improvements and deferred
        leasing commissions                                                       -                 -            21,724
     Amortization of deferred loan fees                                      53,937            39,346
     (Increase) in rent receivable from affiliate                        (1,157,553)       (1,473,539)                -
     Decrease (increase) in interest receivable and other assets            414,469          (905,613)          263,280
     (Decrease) in due to Lessee                                                  -          (944,234)                -
     (Decrease) in accounts payable and accrued expenses                 (1,050,540)       (1,136,115)         (676,274)
                                                                       ------------       -----------        ----------
     Net cash provided by (used in) operating activities                    800,348          (841,359)         (964,779)
                                                                       ------------       -----------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Improvements and additions to hotel properties                         (1,516,543)       (2,277,890)                -
  Acquisition of hotel                                                            -        (1,448,000)                -
  Payment of transaction costs                                                    -                 -          (334,854)
  Proceeds from sale of real estate, net                                          -                 -         5,599,122
                                                                       ------------       -----------        ----------
     Net cash provided by (used in) investing activities                 (1,516,543)       (3,725,890)        5,264,268
                                                                       ------------       -----------        ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on mortgage notes payable                           (4,159,391)      (19,388,537)                -
  Borrowings on mortgage notes payable                                    5,250,000        11,705,374                 -
  Payments on other notes payable                                          (225,000)         (218,000)                -
  Bank borrowings                                                                 -        11,300,000                 -
  Bank repayments                                                                 -          (155,000)                -
  Payment of dividends                                                      (52,889)         (166,781)         (153,088)
  Distributions to minority interest holders                               (264,969)         (781,451)                -
  Repurchase of Partnership units                                          (538,847)                -                 -
  Repurchase of treasury stock                                             (461,754)                -                 -
  Advances from related parties                                             956,218         1,235,628                 -
  Principal payments on advances payable to  related parties                      -          (921,447)       (2,300,000)
                                                                       ------------       -----------        ----------
     Net cash provided by (used in) financing activities                    503,368         2,609,786        (2,453,088)
                                                                       ------------       -----------        ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                       (212,826)       (1,957,463)        1,846,401
CASH AND CASH EQUIVALENTS AT BEGINNING
  OF YEAR                                                                   420,935         2,378,398           531,997
                                                                       ------------       -----------        ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR                               $    208,109           420,935         2,378,398
                                                                       ============       ===========        ==========
</TABLE>

                           See accompanying notes to
                       consolidated financial statements

                                      -24-
<PAGE>

                  INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         As of and for the years ended JANUARY 31, 2000, 1999 AND 1998


1.   NATURE OF OPERATIONS AND BASIS OF PRESENTATION:

InnSuites Hospitality Trust (the "Trust") is a Real Estate Investment Trust
("REIT"), which owns directly or indirectly, ten hotels with 1,665 suites in
Arizona and southern California. The hotels operate as InnSuites Hotels.

Until January 31, 1998, the Trust, formerly known as Realty ReFund Trust,
specialized in mortgage financing as its investment vehicle, refinancing
existing income producing commercial, industrial and multi-unit residential real
property by supplementing or replacing existing financing. The primary
refinancing technique, which the Trust employed, was wrap-around mortgage
lending.


On January 31, 1998, the Trust contributed $2,081,000 to RRF Limited Partnership
(the "Partnership"), a Delaware limited partnership, in exchange for a 13.6%
general partnership interest therein. The Trust is the sole general partner of
the Partnership. The Partnership issued limited partnership interests
representing 86.4% of the Partnership to acquire six hotel properties from
various entities. In addition, in order to acquire a seventh hotel property,
through a wholly-owned subsidiary, RRF Sub Corp., the Trust issued 647,231
shares of beneficial interest in exchange for all of the outstanding shares of
Buenaventura Properties, Inc. (BPI), which owned a hotel located in Scottsdale,
Arizona (InnSuites Hotels Scottsdale). These seven hotels are collectively
referred to as the Initial Hotels. The Initial Hotels, together with the hotels
described in Note 4, are referred to herein as the "Hotels". The Hotels are
leased to InnSuites Hotels, Inc., formerly known as Realty Hotel Lessee Corp.
(the "Lessee"), pursuant to leases which contain provisions for rent based on
the revenues of the Hotels (the "Percentage Leases"). Each Percentage Lease
obligates the Lessee to pay rent equal to the greater of the minimum rent (Base
Rent) or a percentage rent based on the gross revenues of each Hotel. The Lessee
holds the franchise agreement for each Hotel. The Lessee is owned 9.8% by
InnSuites Innternational Hotels, Inc., an entity owned by James F. Wirth,
Chairman, President and Chief Executive Officer of the Trust ("Wirth") and his
spouse.


As of and for the year ended January 31, 2000, the Trust's general partnership
interest in the Partnership was 44.9% and 39.4% (weighted average),
respectively.


PARTNERSHIP AGREEMENT

The Partnership Agreement provides for the issuance of two classes of limited
partnership units, Class A and Class B. Such classes are identical in all
respects, except that each Class A limited partnership unit in the Partnership
shall be convertible into a like number of shares of beneficial interest of the
Trust, at any time at the option of the particular limited partner, if the Trust
determines that such conversion would not cause the Trust to fail to qualify as
a REIT. As of January 31, 2000, a total of 2,072,392 Class A limited partnership
units were issued and outstanding. As of January 31, 2000, a total of 5,226,364
Class B limited partnership units were outstanding to Wirth and his affiliates,
in lieu of the issuance of Class A limited partnership units. If all of the
Class A limited partnership units outstanding at January 31, 2000 were to be
converted to shares of beneficial interest, the limited partners in the
Partnership would hold 2,072,392 shares of beneficial interest of the Trust. The
Class B limited partnership units may only become convertible with the approval
of the Board of Trustees, in its sole discretion.

                                      -25-
<PAGE>

BASIS OF PRESENTATION

As sole general partner of the Partnership, the Trust exercises unilateral
control over the Partnership. Therefore, the financial statements of the
Partnership are consolidated with the Trust. All significant intercompany
transactions and balances have been eliminated.


RECLASSIFICATIONS

Certain prior period amounts in the consolidated financial statements and notes
thereon have been reclassified to conform with current year presentation.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.


HOTEL PROPERTIES

Hotel properties are stated at cost and are depreciated using the straight-line
method over estimated lives ranging from 5 to 40 years for buildings and
improvements and 3 to 15 years for furniture and equipment.


The Trust applies Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" in accounting for its hotel properties.

In accounting for the acquisitions of the Hotels discussed in Note 1, purchase
accounting was applied. The historical carrying values of the assets and
liabilities of BPI were adjusted to their respective fair values based upon the
aggregate fair market value of shares of beneficial interest issued to acquire
the outstanding shares of BPI. The Trust's purchase of its 13.6% general
partnership interest in the Partnership and the Partnership's acquisition of
interests in the Hotels from third parties resulted in adjustments to  the
historical net carrying values of such hotel properties in amounts equal to 34%
of the difference between the fair values and the historical net carrying values
of the respective hotel properties. The Partnership's acquisition of interests
in the Hotels other than BPI held by Wirth and his affiliates did not result in
purchase accounting adjustments to historical net carrying values as such
transactions were between entities under common control. Hotels purchased
subsequent to January 31, 1998 have been recorded at fair value.


CASH AND CASH EQUIVALENTS

The Trust considers all highly liquid short term investments with original
maturities of three months or less to be cash equivalents.


ALLOWANCE FOR UNCOLLECTIBLE RECEIVABLES

Financial instruments, which potentially subject the Trust to credit risk,
primarily consist of rent receivable from the Lessee. The Trust periodically
assesses the collectibility of its receivables based on its evaluation of the
Lessee's estimated future cash flow available for payment. As a result, during
the fourth quarters of fiscal 2000 and 1999, the Trust recorded a $1.9 million
and a $900,000 charge to operations, respectively, as a provision for
uncollectible receivables which is reflected in the accompanying consolidated
statements of operations as a component of general and administrative expenses.


                                      -26-
<PAGE>

REVENUE RECOGNITION

In May 1998, the Financial Accounting Standards Board's Emerging Issues Task
Force ("EITF") issued EITF number 98-9, "Accounting for Contingent Rent in
Interim Periods" (EITF 98-9). EITF 98-9 provides that a lessor shall defer
recognition of contingent rental income in interim periods until specified
targets that trigger the contingent income are met. In July 1998, the Task Force
issued transition guidance stating that the consensus could be applied on a
prospective basis or in a manner similar to a change in accounting principle.
Effective August 1, 1998, the Trust amended its percentage lease agreements to
eliminate the annualization of interim hotel revenue. During the third quarter
of fiscal 1999, accounting for contingent rent under EITF 98-9 was rescinded;
the Trust believes that eliminating annualization of hotel revenue will provide
for recognition of Percentage Rent more consistently with the generation of
revenue from the Hotels.


DIVIDEND AND DISTRIBUTIONS

The Trust expects to pay dividends which are largely dependent upon the receipt
of distributions from the Partnership.


STOCK-BASED COMPENSATION

The Trust accounts for its stock option plan in accordance with the provisions
of SFAS No. 123, "Accounting for Stock-based Compensation" (SFAS No. 123) which
permits entities to recognize as expense over the vesting period, the fair value
of all stock based awards on the date of grant. Alternatively, SFAS No. 123 also
allows entities to apply the provision of APB Opinion No. 25 "Accounting for
Stock Issued to Employees and Related Operations" (APB 25) and provide pro-forma
net income and pro-forma earnings per share disclosures for employee stock
option grants as if the fair-value based method defined in SFAS No. 123 had been
applied. The Trust has elected to apply the provisions of APB 25.


INCOME TAXES

The Trust has elected to be taxed as a REIT under Sections 856 through 860 of
the Internal Revenue Code. If the Trust qualifies for taxation as a REIT, the
Trust generally will not be subject to Federal corporate income tax on that
portion of its net income that is currently distributed to shareholders.
Accordingly, no provision for income taxes has been included in the accompanying
consolidated financial statements. For federal income tax purposes, the cash
distributions paid to shareholders may be characterized as ordinary income,
return of capital or capital gains.


MINORITY INTEREST

The Trust accounts for Minority Interest in accordance with EITF number 94-2
"Treatment of Minority Interests in Certain Real Estate Investments" and EITF
number 95-7 "Implementation Issues Related to the Treatment of Minority Interest
in Certain Real Estate Investment Trusts."


Minority interest in the Partnership represents the limited partners'
proportionate share of the equity in the Partnership. Income or loss is
allocated to minority interest based on the weighted average limited partnership
percentage ownership throughout the period and equity is allocated based on the
ownership percentage at year-end. Any difference is recorded as a reallocation
of minority interest in Shareholder's Equity.

                                      -27-
<PAGE>

LOSS PER SHARE

SFAS No. 128, "Earnings per Share" eliminates the concept of common stock
equivalents and replaces "primary" and "fully diluted" earnings per share with
"basic" and "diluted" earnings per share. Basic and diluted earnings per share
have been computed based on the weighted-average number of shares outstanding
during the periods.

For the fiscal year ended January 31, 2000 and 1999, there were Class A and
Class B partnership units outstanding, which are convertible to shares of
beneficial interest of the Trust. Assuming conversion, the aggregated weighted-
average of these shares of beneficial interest would be 7,604,166 in fiscal 2000
and 7,822,562 in fiscal 1999. These shares are anti-dilutive due to the loss for
fiscal years 2000 and 1999. For fiscal 1998 there were no dilutive or anti-
dilutive securities.


FAIR VALUE OF FINANCIAL INSTRUMENTS

For disclosure purposes, fair value is determined by using available market
information and appropriate valuation methodologies. Due to their short
maturities, cash and cash equivalents and rent receivable from affiliate are
carried at amounts that reasonably approximate fair value.

The fair value mortgage notes payable, notes payable to banks, other note
payables and advances to related parties is estimated by discounting the future
cash flows using the current rates which would be available for similar loans
having the same remaining maturities.


3. HOTEL PROPERTIES

Hotel properties as of January 31, 2000 and 1999 consisted of the following:


                                         2000          1999
                                         ----          ----
Land                                 $ 5,685,590     5,685,590
Building and improvements             55,027,116    54,331,878
Furniture and equipment                8,457,257     7,688,516
                                     -----------   -----------
Total hotel properties                69,169,963    67,705,984
Less accumulated depreciation          4,736,061     2,196,797
                                     -----------   -----------
Hotel properties (net)               $64,433,902    65,509,187
                                     ===========   ===========


Seven of the hotels are located in Arizona and three of the hotels are located
in California. All hotels are subject to Percentage Leases as described in Note
12.


4. ACQUISITIONS

There were no hotel acquisitions during fiscal 2000.

Effective February 1, 1998, the Partnership acquired 100% of the ownership
interests in the Tucson St. Mary's Hotel and Resort for $10,820,000. The
Partnership issued 699,933 Class B limited partnership units to Wirth, and his
spouse, who each held a 50% equity ownership interest in the Tucson St. Mary's
hotel. Effective April 29, 1998, the Trust acquired a hotel property located in
San Diego, California for an aggregate consideration of $5,148,000, which was
funded with cash, proceeds from the Trust's credit facility and two promissory
notes secured by mortgage trust deeds on the property.

Effective June 1, 1998, the Partnership acquired 100% of the ownership of the
InnSuites Hotels Buena Park for $7,100,000. The Partnership assumed $4,116,754
in mortgage debt and other obligations and issued 627,377 limited partnership
units to Wirth and Steve S. Robson (of which 13,034 units were subsequently paid
to a third

                                      -28-
<PAGE>

party as an advisory fee), who each held a 50% equity ownership interest in the
Buena Park hotel. Mr. Robson is a Trustee of the Trust. Wirth and his affiliates
also received an additional 53,681 Class B limited partnership units as payment
for debt owed to Wirth and his affiliates at time of acquisition.

All of the aforementioned acquisitions have been accounted for as purchases.


5.   ALLOWANCE FOR UNCOLLECTIBLE RENT RECEIVABLE

At January 31, 2000, the Trust had an accumulated allowance for uncollectible
rents receivable from the Lessee totaling approximately $2.8 million. After
review of the estimated cash flow projections for fiscal year 2001 and actual
fiscal year 2000 cash flows, management recorded a provision for uncollectible
rent receivable in the amounts of approximately $1.9 million and $900,000 for
the twelve months ended January 31, 2000 and 1999, respectively. The following
reconciles the allowance account for uncollectible rent receivable from the
Lessee:

As of and for the years ended January 31, 2000, 1999 and 1998


           Allowance for Uncollectible Rent Receivable
          --------------------------------------------
          Balance as of January 31, 1998    $     -
          Provision                            900,000
                                            ----------
          Balance as of January 31, 1999       900,000
          Provision                          1,945,732
                                            ----------
          Balance as of January 31, 2000    $2,845,732
                                            ==========


6.   MORTGAGE NOTES PAYABLE



At January 31, 2000, the Trust had mortgage notes payable outstanding with
respect to seven of the Hotels. The mortgage notes payable have various
repayment terms and have scheduled maturity dates ranging from April 28, 2001 to
April 1, 2014. Weighted average interest rates on the mortgage notes for the
years ended January 31, 2000 and 1999 was 8.49% and 8.9%, respectively. At
January 31, 2000, all of the Hotels were in compliance with their respective
debt covenants.

On November 3, 1999, The Trust refinanced its mortgage note on the San Diego
property. The principal amount of the new loan is $4,000,000 with an interest
rate of 9.0%. The loan matures on November 4, 2004. A special condition limits
the initial amount to be funded at closing to $3,500,000. The Partnership must
submit a 12-month trailing operating statement for the San Diego property no
earlier than May 1, 2000 and no later than June 1, 2000. Financial covenants
require (as defined in the agreement) debt coverage ratio of no less than 1.2.
In the event of noncompliance, the lenders commitment to fund the additional
$500,000 will become null and void. As of January 31, 2000, the Trust was in
compliance with its financial covenants. Subsequently, on May 2, 2000, the
lender funded the additional $500,000.

On March 30, 1999, the Trust modified and extended the mortgage agreement on its
Northern Phoenix property. The Partnership borrowed an additional $1,750,000 at
8.25% that matures on April 1, 2014. The original note was restructured to match
the terms of the new note. The maturity date of the original note was extended
from April 1, 2007 to April 1, 2014.



                                      -29-
<PAGE>



A portion of the mortgage notes payable are guaranteed by Wirth and certain of
his affiliates. The net book value of properties securing the mortgage notes
payable at January 31, 2000 and 1999 was $48,581,869 and $49,258,778
respectively. See footnote 10 for scheduled minimum payments.


7. NOTES PAYABLE TO BANKS

During the first quarter of fiscal 1999, the Trust established a $12,000,000
revolving line of credit with Pacific Century Bank. The credit facility
requires the Trust, among other things, to maintain a minimum net worth, a
specified coverage ratio of earnings before interest, taxes, depreciation, and
amortization (EBITDA) to debt service, and a specified coverage ratio of EBITDA
to debt service and fixed charges. Further, the Trust is required to maintain
its franchise agreement at each of the hotel properties and to maintain its REIT
status. At January 31, 2000, the Trust was not in compliance with certain debt
covenant requirements associated with the line of credit; however, the Trust
obtained a waiver from the lender indicating that the debt would not be called
as a result of defaults occurring through January 31, 2000. Subsequent to
January 31, 2000, the Trust negotiated a change in the covenant covering "Debt
to Tangible Net Worth" from 1.5 to 1.75. As a result, the Trust is in compliance
with all covenants subsequent to January 31, 2000.

In accordance with the line of credit agreement, the Trust may choose interest
rates based on: 1) Base Rate, as defined plus .5 basis points; 2) Treasury Bill
Rate plus 2.75 basis points; or 3) London Interbank Offering Rate ("LIBOR") plus
2.75 basis points and requires quarterly interest-only payments. The line of
credit is secured by the Scottsdale, Flagstaff, and Tucson Oracle hotel
properties. The net book value of properties securing the line of credit totaled
approximately $15.9 million at January 31, 2000 and approximately $16.3 million
at January 31, 1999. Borrowings under this line of credit at January 31, 2000
amounted to $11,300,000. Interest is based on LIBOR plus 2.75 basis points
(9.04% and 7.59% at January 31, 2000 and 1999 respectively). The total principal
balance is due April 16, 2001.


8. OTHER NOTES PAYABLE

In connection with the termination of an advisory agreement between the
Partnership and Mid-America ReaFund Advisors, Inc. (the "Advisor"), as further
described at Note 14, the Trust assumed the Advisor's outstanding debt totaling
$450,000. The note bears interest at 7% and matures January 30, 2000. The Trust
paid the final principal payment and all interest due on February 11, 2000.


9. LOANS PAYABLE TO RELATED PARTIES

Loans payable to related parties consists of funds provided by James F. Wirth
to repurchase Partnership units and to fund working capital and capital
improvement needs. The aggregate amounts outstanding were approximately $3.0
million and $2.0 million as of January 31, 2000 and 1999, respectively. The
loans payable to related party are as follows:

     Wirth made an unsecured loan to the Trust in the amount of $2 million,
bearing interest at 7% per year effective March 15, 1999. Interest only payments
are due annually beginning March 15, 2000. The unpaid principal balance and
accrued interest is due on March 15, 2004. The Trust used the proceeds to
purchase general partner units in the Partnership.

                                      -30-
<PAGE>

     Wirth made an unsecured loan to the Trust in the amount of $200,000,
bearing interest at 7% per year effective June 14, 1999. The unpaid principal
balance and accrued interest is due on June 14, 2000. The Trust used the
proceeds to fund operations.

     Wirth made an unsecured loan to the Trust in the amount of $120,000,
bearing interest at 7% per year effective July 27, 1999. The unpaid principal
balance and accrued interest is due on July 27, 2000. The Trust used the
proceeds to fund operations.

     Wirth made an unsecured loan to the Trust in the amount of $30,000,
bearing interest at 7% per year effective August 17, 1999. The unpaid principal
balance and accrued interest is due on August 17, 2000. The Trust used the
proceeds to pay down the outstanding loan from the Partnership.

     Wirth made an unsecured loan to the Trust in the amount of $250,000,
bearing interest at 7% per year effective October 12, 1999. The unpaid principal
balance and accrued interest is due on June 1, 2000. The Trust used the proceeds
to pay dividends declared on October 12, 1999 and to pay down the outstanding
loan from the Partnership.

     Wirth made an unsecured loan to the Trust in the amount of $250,000,
bearing interest at 7% per year effective October 14, 1999. The unpaid principal
balance and accrued interest is due on March 1, 2000. The Trust used the
proceeds to pay down the outstanding loan from the Partnership, which then was
used by the Partnership to pay deposits and other fees related to the pending
refinancing of the San Diego Hotel.

     InnSuites Innternational Hotels made an unsecured loan in the amount of
$120,000 to the Trust bearing no stated interest rate or maturity date on
January 12, 2000. Subsequently on March 8, 2000, the loan was paid in full.


10. MINIMUM DEBT PAYMENTS

Scheduled minimum payments of debt as of January 31, 2000 are as follows:

    FISCAL YEAR ENDED                       AMOUNT(1)
    -----------------                       ---------
         2001                              $ 1,476,479
         2002                               15,949,862
         2003                                  815,877
         2004                                  890,899
         2005                                9,187,440
        Thereafter                          10,081,103
                                           -----------
                                           $38,401,660
                                           ===========

(1) Approximately $345,000 of debt was repaid by February 11, 2000 and is not
included in the aforementioned summary.


11. DESCRIPTION OF CAPITAL STOCK

Holders of the Trust's shares of beneficial interest are entitled to receive
dividends when, and if declared by the Board of Trustees of the Trust out of
funds legally available therefore. The holders of shares of beneficial interest,
upon any liquidation, dissolution or winding-up of the Trust, are entitled to
share ratably in any assets remaining after payment in full of all liabilities
of the Trust. The shares of beneficial interest possess ordinary voting rights,
each share entitling the holder thereof to one vote. Holders of shares of
beneficial interest do not have cumulative voting rights in the election of
directors and do not have preemptive rights.

For the year ended January 31, 2000, the Trust repurchased 189,500 shares of
beneficial interest at an average price of $2.44 per share. Repurchase of these
shares are accounted for on the Treasury Stock Method and are reported as such
in the Statement of Shareholder's Equity.

                                      -31-

<PAGE>

12. PERCENTAGE LEASE AGREEMENTS

Effective August 1, 1998, the Trust amended its Percentage Leases modifying the
interim calculations of percentage rent and the expiration dates of the
agreements. The Percentage Leases have non-cancelable terms, which expire on
January 31, 2008, subject to earlier termination on the occurrence of certain
contingencies, as defined. The rent due under each Percentage Lease is the
greater of minimum rent, as defined, or percentage rent. Percentage rent
applicable to room and other hotel revenue varies by lease and is calculated on
a quarterly basis by multiplying fixed percentages by the actual quarterly
amounts of such gross revenues in excess of specified threshold amounts. Both
the minimum rent and the revenue thresholds used in computing percentage rents
are subject to annual adjustments beginning January 1, 1999, based on increases
in the United States Consumer Price Index. Percentage rent applicable to food
and beverage revenues is calculated as 5% of such revenue over a minimum
threshold.

Future minimum rentals (ignoring CPI increases) to be received by the Trust from
the Lessee pursuant to the Percentage Leases for each of the next five years and
in total thereafter are as follows:


      2001                                  $ 6,850,000
      2002                                    6,850,000
      2003                                    6,850,000
      2004                                    6,850,000
      2005                                    6,850,000
    Thereafter                               20,550,000
                                            -----------
                                            $54,800,000
                                            ===========

The Trust earned approximately $9.5 million and $9.9 million in rent revenue
during fiscal 2000 and 1999, respectively, of which approximately $2.7 million
and $3.3 million respectively, was in excess of base rent. No percentage rent
was earned in fiscal 1998 from the Hotels.

13. FEDERAL INCOME TAXES

No provision for current or deferred income taxes has been made by the Trust.
The Trust has elected to be a REIT and is therefore subject to the requirements
of Sections 856 to 860 of the Internal Revenue Code, all of the requirements of
which management believes have been met for the years ended January 31, 2000 and
1999. As a REIT, the Trust normally distributes 95% of its taxable income to its
shareholders. For the years ended January 31, 2000 and 1999, the Trust had a
taxable income (loss) of approximately ($850,000) and ($1,164,000),
respectively, before consideration of net operating loss carry forwards. In
fiscal years 2000 and 1999, the primary difference between book loss and taxable
income relates to excess book depreciation over tax depreciation.

The total dividends per share applicable to operating results for the years
ended January 31, 2000, 1999 and 1998, amounted to $0.02 per share, $0.10 per
share and $0.15 per share, respectively.

The Trust has an income tax net operating loss of approximately $15.4 million.
Net operating loss carryforwards expire beginning in fiscal 2008 and ending in
fiscal 2020. The quarterly allocation of cash dividends paid per share and the
characterization of dividends as either ordinary income or return of capital for
individual shareholders' income tax purposes were as follows:

                                      -32-
<PAGE>

<TABLE>
<CAPTION>

                    CALENDAR 1999                       CALENDAR 1998                           CALENDAR 1997
                    -------------                       -------------                           -------------
              Ordinary   Return   Total           Ordinary   Return    Total              Ordinary   Return    Total
Month Paid     Income  of Capital  Paid            Income  of Capital  Paid                Income  of Capital  Paid
--------------------------------------------------------------------------------------------------------------------
<S>           <C>                                 <C>                                     <C>
March                                                 -        -       -                       -      .10     .10
June                                                  -        -       -                       -      .05     .05
September                                             -      .10     .10                       -        -       -
October                  $.01     .01                 -        -       -                       -        -       -
                 ---      ---     ---               ---      ---     ---                     ---      ---     ---
                         $.01     .01                 -      .10     .10                       -      .15     .15
                 ===      ===     ===               ===      ===     ===                     ===      ===     ===
</TABLE>

The tax status of distributions to shareholders in calendar 2000 will be
dependent on the level of the Trust's earnings in that year. If current and
accumulated earnings and profits of the Trust exceed dividends paid in calendar
2000, such dividends will represent ordinary income to the recipients
irrespective of the net operating loss carryforward. If certain changes in the
Trust's ownership should occur, there could be an annual limitation on the
amount of carryforwards that can be utilized, which could potentially impair the
ability to utilize the full amount of the carryforwards.

14. ADVISORY AGREEMENT/EMPLOYMENT AGREEMENTS

On January 31, 1998, Wirth and his spouse purchased the stock of the Advisor
which provided the administration of the day-to-day investment operations of the
Trust and the Partnership. The Advisor was formerly owned by the former Chairman
and President of the Trust. Under the terms of an advisory agreement between the
Partnership and the Advisor, the Advisor received, subject to certain
limitations, a monthly fee equal to 1/12 of 1% of invested assets, as defined in
the advisory agreement, and an annual incentive fee equal to (a) 10% of the
amount by which the net income of the Partnership exceeded 8% of the average net
worth for the year and (b) 10% of any net realized capital gains less
accumulated net realized capital losses, as defined. For any fiscal year in
which operating expenses of the Partnership exceeded certain thresholds
specified in the advisory agreement, the Advisor was required to refund to the
Partnership the amount of such excess. There was no fee to the Advisor during
fiscal year 1998 due to the reduction in the Trust's investment in mortgage
loans. During fiscal 1999, the Advisor received approximately $364,000 in fees.

Effective January 1, 1999, the Partnership terminated its agreement with the
Advisor in exchange for the Trust's assumption of $450,000 of outstanding notes,
the issuance of 67,000 Class B limited partnership units valued at $2 per unit
and the forgiveness of $85,331 in net liabilities. As a result, the Trust
recorded a net $498,669 charge to operations resulting from $780,746 loss on
termination of advisory agreement offset by $282,077 of forgiven fees to related
party investment advisor.

Wirth has an employment agreement with the Trust which expires in December 2007.
The employment agreement provides that Wirth received no compensation from the
Trust as long as the advisory agreement was in effect. However, pursuant to the
terms of the employment agreement, since the Advisor no longer provides services
to the Partnership or the Trust, Wirth will be compensated at an amount up to
the same annual basis as the Advisor would have been compensated under the terms
of the advisory agreement had it remained in effect. Wirth is currently being
compensated, however, at a lesser rate of $130,000 a year.

Certain employment agreements with the former Chairman and President of the
Trust were terminated at January 30, 1998.


15. OTHER RELATED PARTY TRANSACTIONS

The Partnership is responsible for all expenses incurred by the Trust in
accordance with the Partnership Agreement.

                                      -33-
<PAGE>

Wirth is a 9.8% indirect shareholder of the Lessee. At January 31, 2000 the
Trust had a $155,000 receivable from the Lessee.

The Initial Hotels were acquired by the Partnership from entities in which Wirth
and his affiliates had substantial ownership interests. Wirth and his affiliates
received 4,017,361 Class B limited partnership units and 647,231 shares of
beneficial interest in the Trust in exchange for their interests in the Initial
Hotels. As of January 31, 2000 and 1999 Wirth and his affiliates held 5,226,364
and 5,246,364 Class B limited partnership units, respectively. As of January 31,
2000 and 1999 Wirth and his affiliates held 834,613 and 777,663, respectively,
shares of beneficial interest in the Trust.

At January 31, 2000, the Trust owned a 44.9% interest in the ten hotels (the
"Hotels") through its sole general partner's interest in the Partnership. This
change in ownership resulted primarily from the following transactions:

     On March 15, 1999, the Trust purchased 1 million additional general partner
     units in the Partnership for $2 million. This transaction was fully funded
     by Mr. Wirth who provided an unsecured loan to the Trust at 7% interest
     payable annually beginning March 15, 2000. The unpaid principal balance and
     accrued interest is due on March 15, 2004.

     On April 2, 1999, the Partnership made an unsecured loan to the Trust in
     the amount of $2.6 million. Annual interest only payments are due on March
     1 of each year and are based on a 7% interest rate. The unpaid principal
     balance is due at maturity on April 2, 2006. The Trust used the proceeds of
     that loan to purchase 1.3 million general partner units in the Partnership.
     The money lent by the Partnership was generated by refinancing the Northern
     Phoenix hotel and borrowing an additional $1.8 million that was secured by
     a mortgage on that property. The original mortgage note was restructured to
     match the terms of the refinanced note, which bears interest at 8.25% and
     matures on April 1, 2014. Monthly principal and interest payments began on
     April 1, 1999.

     As of April 2, 1999, the Trust transferred, at historical cost of
     approximately $7 million, its interest in the Scottsdale property to the
     Partnership in exchange for 1.6 million general partner units.

     The Trust repurchased 131,493 of the Partnership's Class A units in fiscal
     2000 at a weighted average price per unit of $4.10. The units were then
     retired. No Partnership units were repurchased in fiscal 1999.

The Trust recorded expenses of approximately $17,000, $2,400, and $84,000 in
fiscal years 2000, 1999 and 1998, respectively, for legal services provided by a
law firm of which the former President of the Trust and another former Trustee
are principals.

The Trust paid interest on related party notes to James Wirth in the amounts of
$14,000 and $135,000 for the twelve months ended January 31, 2000 and 1999,
respectively.

The expenses of the Trust consist primarily of property taxes, insurance,
corporate overhead, interest on mortgage debt and depreciation of the Hotels.
Under the terms of the Partnership agreement, the Partnership is required to
reimburse the Trust for all such expenses.

                                      -34-
<PAGE>

16. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of the Trust's significant financial
instruments at January 31, 2000, 1999 and 1998 are as follows:



                                  2000                   1999
                               -----------            ----------
                          CARRYING       FAIR      CARRYING    FAIR
                           AMOUNT        VALUE      AMOUNT     VALUE
                          -----------  ----------  ----------  ----------
Mortgage notes payable    $24,251,662  22,523,421  23,161,052  23,279,651
Notes payable to banks     11,300,000  11,300,000  11,300,000  11,300,000
Other notes payable           225,000     225,000     450,000     450,000
Loans payable to
 related parties          $ 2,970,000           *   2,013,782   2,013,782

* It is not practical to estimate the fair value of related party payables.


17. SUPPLEMENTAL CASH FLOW DISCLOSURES

Interest paid amounted to approximately $3.4 million, $2.4 million, and $118,000
for fiscal years 2000, 1999 and 1998, respectively.

The Trust satisfied its approximately $2.6 million participating mortgage
obligation related to the Ontario hotel through the issuance of 423,687 shares
of beneficial interest to former partners of Ontario Hospitality Properties
Limited Partnership and 133,492 Class B limited partnership units in the
Partnership to Wirth and his affiliates for their respective interests in fiscal
1999.

During the second quarter of fiscal 1999, several non-exchanging partners from
the formation exchange offer exchanged their interests in the hotels for
interests in the Partnership. The fair value in excess of the historical net
carrying values of the respective hotels resulted in a write-up of approximately
$1.0 million.

In connection with the acquisition of the Buena Park hotel during the second
quarter of fiscal 1999, approximately $4.5 million of historical net book value
in hotel properties was contributed to the Partnership in exchange for
partnership units and the Partnership assumed approximately $4.1 million of debt
and other obligations.

In connection with the acquisition of the San Diego hotel, approximately
$3.7 million of the purchase price was satisfied through promissory notes
payable to the sellers.

As of January 31, 1998, the Trust acquired all of the outstanding shares of BPI
in exchange for 647,231 shares of beneficial interest having an aggregate value
of approximately $3.1 million.

In connection with the formation of the Partnership as of January 31, 1998,
approximately $24.9 million of historical net book value in hotel properties was
contributed to the Partnership in exchange for Partnership units and the
Partnership assumed approximately $16.8 million of debt.


18. COMMITMENTS AND CONTINGENCIES

One of the Hotels is subject to a non-cancelable ground lease expiring December
31, 2051. Total expense for the fiscal years ended January 31, 2000 and 1999 was
$70,000 each year plus a variable component that totaled approximately $67,000,
and $77,000 respectively.

                                      -35-
<PAGE>

Future minimum lease payments are as follows:

          Fiscal Year Ended

               2001                     75,000
               2002                     75,000
               2003                     75,000
               2004                     75,000
               2005                     75,000
          Thereafter                 3,680,000
                                    ----------
                                    $4,055,000
                                    ==========


The Trust is obligated to make funds available to the Hotels for capital
expenditures (the Reserve Funds), as determined in accordance with the
Percentage Leases. The Reserve Funds have not been recorded on the books and
records of the Trust as such amounts are capitalized as incurred. The amount
obligated under the Reserve Funds are 4% of the individual Hotel's total
revenues.

The nature of the operations of the Hotels exposes them to risks of claims and
litigation in the normal course of their business. Although the outcome of these
matters cannot be determined, management does not expect that the ultimate
resolution of these matters will have a material adverse effect on the financial
position, operations or liquidity of the Hotels.

The Trust is involved in various other claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Trust's consolidated financial position, results of operations or liquidity.


19. STOCK OPTION PLAN

During fiscal 1999, the shareholders of the Trust adopted the 1997 Stock
Incentive and Option Plan (the "Plan") at the annual shareholder meeting.
Pursuant to the Plan, the Compensation Committee may grant options to the
Trustees, Trust Officers, other key employees, consultants, advisors, and
similar employees of the Trust's subsidiaries and affiliates.  The number of
options that may be granted is limited to 10% of the total Common Stock and
Units (Class A and Class B) as of the first day of such year.

Generally, options granted expire in 10 years, are exercisable during the
optionee's lifetime only by the recipient and are non-transferable.  Unexercised
options held by employees of the Trust generally terminate on the date the
individual ceases to an employee of the Trust.

The per share weighted average fair value of stock options granted under the
Plan for the years ended January 31, 2000 and 1999 was $1.12 and $1.26,
respectively, using the Black-Scholes option-pricing model with the following
weighted-average assumptions used for grants in 2000 and 1999:


                                               Years ended January 31,

                                           2000                       1999
                                           ----                       ----
Dividend yield                              2.5%                         -
Expected volatility                        34.0%                      37.5%
Risk-free interest rate                     5.7%                       5.0%
Expected lives                              3 years                    2.5 years

                                      -36-
<PAGE>

At January 31, 2000, the exercise price and weighted average remaining
contractual life of options was $2.50 and 9 years, respectively.

The following table summarizes the stock option activity during the 2000 and
1999 fiscal years and provides information about the stock options outstanding
at January 31, 2000:


                                                               Weighted-
                                                               Average
                                        Number Of Options      Exercise Price
                                        -----------------      --------------
Stock Option Activity
Outstanding, January 31, 1998                           -      $            -
 Granted                                          405,000                4.31
 Forfeited                                        (15,300)               4.31
 Exercised                                              -                   -
                                        -----------------      --------------
Outstanding, January 31, 1999                     390,100      $         4.31
 Granted                                           88,200                2.50
 Forfeited                                       (102,300)               3.83
 Exercised                                              -                   -
                                        -----------------      --------------

Outstanding, January 31, 2000                     375,600      $         2.50
                                        =================      ==============



Stock Option Information                                January 31, 2000
--------------------------------------------------------------------------------
Options exercisable                                          97,000
Weighted Average Exercise Price                             $  2.50


For stock options granted to non-employees of the Trust, compensation is
recognized over the respective vesting period based upon the fair value of the
options as calculated using the Black-Scholes pricing model. During the years
ended January 31, 2000 and 1999, the Trust granted 28,200 and 214,100 stock
options to non-employees, respectively, resulting in the recognition of
compensation expense of approximately $57,000 and $184,000 during the respective
years.

The Trust applies APB Opinion No. 25 in accounting for stock options granted its
employees under the plan and, accordingly, no compensation cost has been
recognized for these stock options in the consolidated financial statements.
Had the Company determined compensation cost based on the fair value at the
grant date for its stock options under SFAS No. 123, the Company's net loss
would have been increased to the pro-forma amount indicated below:

                                                  Years ended January 31,
                                                  -----------------------
                                                      2000         1999
                                                      ----         ----
Net loss:
 As reported                                      $  (951,811)  $(193,071)
                                                  ===========   =========

 Pro forma                                        $(1,058,408)  $(293,468)
                                                  ===========   =========

Net loss per share - basic and diluted:
 As reported                                      $     (0.40)  $   (0.10)
                                                  ===========   =========

 Pro forma                                        $     (0.45)  $   (0.15)
                                                  ===========   =========


Effective September 14, 1999, the Trust modified all outstanding stock options,
reducing the exercise price from the existing exercise price per share to $2.50,
to be consistent with the trading value of underlying beneficial interest as of
this date.  As a result of the modification of exercise price, the Trust
recognized approximately $10,000 compensation expense for the year ended
January 31, 2000.


                                      -37-
<PAGE>



20. NET LOSS PER SHARE

The Trust calculates basic and diluted net income (loss) per share in accordance
with the provisions of Statement of Financial Accounting Standards No. 128,
"Earnings Per Share."  Basic net income (loss) per share is computed using the
weighted average number of common shares outstanding during each period
(2,376,770, 1,921,902 and 1,022,359 shares for the years ended January 31, 2000,
1999, and 1998, respectively).  Diluted net loss per share is the same as basic
net loss per share for the years ended January 31, 2000, 1999 and 1998 due to
the antidilutive effect of potentially dilutive securities on loss from
continuing operations.

Potentially dilutive securities excluded from diluted loss per share totaled
7,608,321, 7,753,890 and 0 for the years ended January 31, 2000, 1999 and 1998,
respectively. Had these securities been dilutive, loss per share would have been
$(0.20), $(0.05) and no effect, respectively.


21. QUARTERLY RESULTS (UNAUDITED)

The following is an unaudited summary of the results of operations, by quarter,
for the fiscal years ended January 31, 2000 and 1999. Management believes
that all adjustments (consisting of normal recurring accruals) necessary for a
fair presentation of such interim results have been included. The results of
operations for any interim period are not necessarily indicative of those for
the entire fiscal year.

<TABLE>
<CAPTION>
                                                       QUARTER ENDED
                                                       -------------
FISCAL 2000                            APRIL 30      JULY 31      OCTOBER 31   JANUARY 31
-----------                            --------      -------      ----------   ----------
                                                  (As restated) (As restated)
<S>                                    <C>          <C>            <C>          <C>
Total revenues                         $3,284,978   2,102,983      2,037,540    2,120,679
                                       ==========   =========      =========    =========
Total revenues less interest
    expense on mortgage loans
    and operating expenses,
    and amortization expense of
    real estate held for sale          $2,527,452     653,656      1,278,142    1,769,061
                                       ==========   =========      =========    =========
Net income (loss)                      $  379,307    (295,821)       (98,975)    (936,322)
                                       ==========   =========      =========    =========

Income (loss) per share - basic        $      .16        (.13)          (.04)        (.39)
                                       ==========   =========      =========    =========
Income (loss) per share - diluted      $      .10        (.13)          (.04)        (.39)
                                       ==========   =========      =========    =========
Dividends declared per share           $        -           -            .01          .01
                                       ==========   =========      =========    =========
</TABLE>

                                      -38-
<PAGE>

<TABLE>
<CAPTION>
                                                     QUARTER ENDED
                                                     -------------
FISCAL 1999                         APRIL 30     JULY 31    OCTOBER 31   JANUARY 31
-----------                         --------     -------    ----------   ----------
<S>                                <C>          <C>         <C>          <C>
Total revenues                     $3,782,584   2,021,597    2,936,504    1,169,073
                                   ==========   =========    =========    =========
Total revenues less interest
    expense on mortgage loans
    and operating expenses,
    and amortization expense of
    real estate held for sale      $3,154,072   1,565,900    2,483,259      761,986
                                   ==========   =========    =========    =========
Net income (loss)                  $  435,169     (99,816)      45,425     (573,849)
                                   ==========   =========    =========    =========
Income (loss) per share -
    basic and diluted              $      .26        (.06)         .02         (.27)
                                   ==========   =========    =========    =========
Dividends declared per share       $        -           -          .10            -
                                   ==========   =========    =========    =========

</TABLE>

                                      -39-
<PAGE>

                                                                    SCHEDULE III

                  INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
                   REAL ESTATE AND ACCUMULATED DEPRECIATION
                            AS OF JANUARY 31, 2000

<TABLE>
<CAPTION>
                                                                                    Cost
                                                     Initial                     Capitalized            Gross Amounts at
                                                       Cost                     Subsequent to           Which Carried at
                                                     to Trust                    Acquisition            Close of Period
                                            ---------------------------   ------------------------  ---------------------------
                                                          Buildings and               Building and                Buildings and
                              Encumbrances      Land       Improvements     Land      Improvements       Land     Improvements
                              ------------  ------------  -------------  ----------   ------------  ---------------------------
<S>                           <C>           <C>           <C>            <C>          <C>           <C>            <C>
InnSuites Hotels
  Phoenix Best Western
  Phoenix, Arizona            $ 4,270,812   $    418,219   $ 2,922,884   $        -   $    106,958  $     418,219  $  3,029,842

InnSuites Hotels
  Tempe/Phoenix
  Airport/South
  Mountain
  Tempe, Arizona                2,359,386        686,806     6,548,348            -        151,099        686,806     6,699,447

InnSuites Hotels Tucson,
  Catalina Foothills Best
  Western Tucson, Arizona (B)           -              -     4,220,820            -      1,754,059              -     5,974,879

InnSuites Hotels Yuma Best
  Western
  Yuma, Arizona                 3,489,758        251,649     4,983,292            -        677,202        251,649     5,660,494

Holiday Inn Airport
  Ontario Hotel and Suites
  Ontario, California           3,472,198      1,633,064     5,450,872            -        209,116      1,633,064     5,659,988

InnSuites Hotels
  Flagstaff/Grand Canyon
  Flagstaff, Arizona    (B)             -        100,000     1,194,691            -      1,013,802        100,000     2,208,493

InnSuites Hotels
  Tucson St. Mary's
  Tucson, Arizona               3,846,625        900,000     9,166,549            -        308,843        900,000     9,475,392

Buena Park Suite
  Hospitality
  Buena Park Suites
  Buena Park, California        3,323,115        645,852     4,336,476            -      1,658,768        645,852     5,995,244

InnSuites Hotels
  San Diego Hospitality
  San Diego, California         3,489,768        700,000     3,972,785            -        151,053        700,000     4,123,838

InnSuites Hotels
  Scottsdale/
  El Dorado Park Resort
  Scottsdale, Arizona   (B)             -        350,000     6,074,400            -        125,099        350,000     6,199,499
                              -----------   ------------   -----------   -----------  ------------  -------------  ------------
                              $24,251,662   $  5,685,590   $48,871,117   $         -  $  6,155,999  $   5,685,590  $ 55,027,116
                              ===========   ============   ===========   ===========  ============  =============  ============
</TABLE>

                                      -40-
<PAGE>

<TABLE>
<CAPTION>
                                                        SCHEDULE III (continued)

                                                                          Net
                                                                       Book Value
                                                                        Land and                                    Depreciation
                                                                        Buildings                                    in Income
                                         Total         Accumulated         and           Date of         Date of    Statement is
                                          (A)          Depreciation   Improvements     Construction    Acquisition    Computed
                                   -------------------------------------------------------------------------------------------------
<S>                                <C>                <C>             <C>             <C>             <C>             <C>
InnSuites Hotels
     Phoenix Best Western
      Phoenix, Arizona                $ 3,448,061      $  150,293     $ 3,297,768         1980           1998         5-40 years

InnSuites Hotels
   Tempe/Phoenix
   Airport/South
   Mountain
   Tempe, Arizona                       7,386,253         333,466       7,052,787         1982           1998         5-40 years

InnSuites Hotels Tucson,
   Catalina Foothills Best
   Western Tucson, Arizona (B)          5,974,879         297,526       5,677,353         1981           1998         5-40 years

InnSuites Hotels Yuma Best
   Western
   Yuma, Arizona                        5,912,143         277,932       5,634,211         1982           1998         5-40 years

Holiday Inn Airport
   Ontario Hotel and Suites
   Ontario, California                  7,293,052         276,828       7,016,224         1990           1998         5-40 years

InnSuites Hotels
   Flagstaff/Grand Canyon
   Flagstaff, Arizona      (B)          2,308,493         104,725       2,203,768         1966           1998         5-40 years

InnSuites Hotels
   Tucson St. Mary's
   Tucson, Arizona                     10,375,392         458,840       9,916,552         1960           1998         5-40 years

Buena Park Suite Hospitality
   Buena Park Suites
   Buena Park, California               6,641,096         239,677       6,401,419         1972           1998         5-40 years

InnSuites Hotels
   San Diego Hospitality
   San Diego, California                4,823,838         178,891       4,644,947         1946           1998         5-40 years

InnSuites Hotels Scottsdale/
   El Dorado Park Resort
   Scottsdale, Arizona     (B)          6,549,499         307,396       6,242,103         1980           1998         5-40 years
                                      -------------------------------------------
                                      $60,712,706      $2,625,574     $58,087,132
                                      ===========      ==========     ===========
</TABLE>
              (See accompanying independent auditors report.)

(A)  Aggregate cost for federal income tax purposes at January 31, 2000 is as
     follows:

                    Land                          $ 5,566,892
                    Buildings and improvements     21,980,332
                                                  -----------
                                                  $27,547,224
                                                  ===========

(B)  These properties secure the $12 million Trust and Partnership line of
     credit.

     Reconciliation of Real Estate:

               Balance at January 31, 1998        $   34,835,043
               Acquisition of hotel properties        23,923,131
               Improvement to hotel properties         1,259,294
                                                  --------------

               Balance at January 31, 1999        $   60,017,468
               Improvement to Hotel Properties           695,238
                                                  --------------
               Balance at January 31, 2000        $   60,712,706
                                                  ==============

All acquisitions of hotel properties, other than approximately $1,448,000 in
cash paid in connection with the purchase of the Buena Park Property, were
acquired through the exchange of limited partnership units in the Partnership.

                                      -41-
<PAGE>

Reconciliation of Accumulated Depreciation:

 Balance at January 31, 1998                  $        -
 Depreciation                                  1,306,786
                                              ----------

 Balance at January 31, 1999                  $1,306,786
 Depreciation                                  1,368,788
                                              ----------
 Balance at January 31, 2000                  $2,675,574
                                              ==========

                                      -42-
<PAGE>

                         Independent Auditors' Report

The Board of Directors
InnSuites Hotels, Inc.:

We have audited the accompanying balance sheet of InnSuites Hotels, Inc. (the
"Company") as of January 31, 2000, and the related statement of operations,
stockholders' deficit and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InnSuites Hotels, Inc. as of
January 31, 2000, and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.

                                              /s/  KPMG LLP

Phoenix, Arizona
May 5, 2000

                                      -43-
<PAGE>

                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                   ----------------------------------------

The Board of Directors
InnSuites Hotels, Inc:

We have audited the accompanying balance sheet of InnSuites Hotels, Inc., as of
January 31, 1999, and the related statements of operations and stockholders'
deficit and cash flows for the year then ended.  These financial statements are
the responsibility of the Company's management.  Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InnSuites Hotels, Inc., as of
January 31, 1999, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.




Phoenix, Arizona                          MICHAEL MAASTRICHT, CPA
April 14, 2000

                                      -44-
<PAGE>


                            INNSUITES HOTELS, INC.
                                BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                As of January 31,
                                                                               -------------------
                                                                                2000         1999
                                                                             -----------   ----------
 <S>                                                                         <C>           <C>
Assets

Cash and cash equivalents                                                     $   203,166      436,179
Accounts receivable                                                               790,323      667,081
Prepaid and other assets                                                           41,938      120,555
                                                                              -----------    ----------
Total Assets                                                                   $1,035,427    1,223,815
                                                                              ===========    ==========

Liabilities and Stockholders' Deficit

Liabilities

Accounts payable                                                               $1,418,469    1,199,245
Loans from affiliates                                                             375,000      136,448
Percentage rent payable                                                         2,845,732    1,688,178
Accrued expenses and other liabilities                                            865,953      805,903
                                                                              -----------   ----------
Total Liabilities                                                               5,505,154    3,829,774

Stockholders' Deficit
  Preferred stock, $1 par value, 100 shares authorized,
   100 shares issued and outstanding as of January 31, 2000 and 1999                  100          100
  Additional paid-in capital                                                      249,900      249,900
  Common stock, no par value, 100,000 shares authorized,
   76,555 shares issued and outstanding as of January 31, 2000 and 1999             2,431        2,431
Accumulated Deficit                                                            (4,722,158)  (2,858,390)
                                                                              -----------   ----------
Total Stockholders' Deficit                                                    (4,469,727)  (2,605,959)
                                                                              -----------   ----------
Total Liabilities and Stockholders' Deficit                                   $ 1,035,427    1,223,815
                                                                              ===========   ==========
</TABLE>

                See accompanying notes to financial statements.

                                      -45-
<PAGE>


                            INNSUITES HOTELS, INC.
                           STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                        For the twelve months ended January 31,
                                                 2000         1999
                                              -----------   ----------
 <S>                                         <C>            <C>
Revenue from hotel operations:
    Room                                      $25,146,035     24,341,384
    Food and beverage                           1,725,730      1,613,766
    Telecommunications                            346,091        460,770
    Other                                         124,079        291,281
                                              -----------    -----------
        Total revenues                        $27,341,935     26,707,201
                                              -----------    -----------

Department expenses:
    Rooms                                     $ 6,706,503      7,787,234
    Food and beverage                           1,626,532      1,409,010
    Telecommunications                            389,664        495,566
    Other                                         877,676        138,468
    General and administrative                  2,867,806      3,975,266
    Sales and marketing                         2,149,781      2,082,812
    Repairs and maintenance                     2,025,576      1,344,715
    Hospitality                                 1,546,766      1,202,005
    Utilities                                   1,643,788      1,572,819
    Insurance                                     105,573         62,437
    Percentage rent                             9,516,038      9,976,880
                                              -----------    -----------
    Total expenses                            $29,455,703     30,047,212
                                              -----------    -----------
Net loss                                      $(2,113,768)    (3,340,011)
                                              ===========    ===========
</TABLE>

                See accompanying notes to financial statements.

                                      -46-
<PAGE>


                            INNSUITES HOTELS, INC.
                      STATEMENTS OF STOCKHOLDERS' DEFICIT

                 For the years ended January 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                           RETAINED                 COMBINED
                              PREFERRED    COMMON          EARNINGS                  EQUITY
                                STOCK      STOCK     (ACCUMULATED DEFICIT)    (ACCUMULATED DEFICIT)
                             ---------     ------    ---------------------    ---------------------
<S>                          <C>           <C>       <C>                      <C>

BALANCE, January 31, 1998     $250,000     $2,431      $     1,621               $   254,052
 Contributions                      --         --          480,000                   480,000
 Net loss                           --         --       (3,340,011)               (3,340,011)
                              --------     ------      -----------               -----------
BALANCE, January 31, 1999     $250,000     $2,431      $(2,858,390)              $(2,605,959)
                              --------     ------      -----------               -----------
 Contributions                      --         --          250,000                   250,000
 Net loss                           --         --       (2,133,768)               (2,113,768)
                              --------      -----       ----------                ----------
BALANCE, January 31, 2000     $250,000     $2,431      $(4,722,158)              $(4,469,727)
                              ========     ======      ===========               ===========
</TABLE>

                See accompanying notes to financial statements.

                                      -47-
<PAGE>


                            INNSUITES HOTELS, INC.
                           STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                       For the twelve months ended January 31,
                                                           2000                      1999
                                                       -----------                ----------
 <S>                                                   <C>                        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss                                               $(2,113,768)               (3,340,011)
 Adjustments to reconcile net loss to net cash
   used in operating activities:
   (Increase) decrease in Accounts receivable              (123,242)                  142,978
   Decrease in Inventories                                        -                   493,648
   Decrease in Due from affiliates                                                    599,520
   Decrease in Other assets                                  78,617                    39,760
   Increase in Accounts payable                             219,224                   229,067
   Increase (decrease) in Accrued expenses
    and other liabilities                                    60,050                    (6,936)
   Increase in Percentage rent payable                    1,157,554                 1,688,178
                                                        -----------                ----------
   Net cash (used in) operating activities              $  (721,565)                 (153,796)
                                                        -----------                ----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Payment of loans from affiliates                         238,552                  (212,120)
   Contributions                                            250,000                   480,000
                                                        -----------                ----------
   Net cash provided by financing activities            $   488,552                   267,880
                                                        -----------                ----------
Net change in cash and cash equivalents                    (233,013)                  114,084

Cash and cash equivalents at beginning of year              436,179                   322,095
                                                        -----------                ----------

Cash and cash equivalents at end of year                $   203,166                   436,179
                                                        ===========                ==========
</TABLE>

                See accompanying notes to financial statements.

                                      -48-
<PAGE>

                            INNSUITES HOTELS, INC.
                         Notes to Financial Statements
                         As of and for the years-ended
                           January 31, 2000 and 1999


  1.  Organization & Basis of Presentation:

  InnSuites Hotels, Inc., (the "Company") leases and operates hotels owned by
  RRF Limited Partnership (the "Partnership"). The Partnership is owned by
  several Limited Partners and a General Partner, InnSuites Hospitality
  Trust(the "Trust"). The Trust is an unincorporated Ohio real estate investment
  trust (the "REIT") which agreed to acquire equity interests in several
  existing hotel properties on January 31, 1998 and to consider selectively the
  purchase or development of additional hotels in the expansion of its business.
  The Trust acquired its General Partner interest, representing a 13.6% equity
  interest in the Partnership as of January 31, 1998.  The partners and
  shareholders of the original InnSuites Hotels, contributed their respective
  partnership and corporate interests to the Partnership in exchange for cash,
  partnership interests or REIT Common stock on January 31, 1998.

  The following full-service hotels are leased and operated by the Company:


  Property                                 Location            Number of Suites
  -------------------------------------    --------------      ----------------
  InnSuites Tempe/Airport                  Tempe, AZ                 170
  InnSuites Scottsdale                     Scottsdale, AZ            134
  InnSuites Flagstaff Grand Canyon         Flagstaff, AZ             134
  InnSuites Phoenix Best Western           Phoenix, AZ               123
  InnSuites Tucson Best Western            Tucson, AZ                159
  InnSuites Yuma Best Western              Yuma, AZ                  166
  Holiday Inn Airport InnSuites Ontario    Ontario, CA               150
  InnSuites Tucson St. Mary's              Tucson, AZ                297
  InnSuites San Diego                      San Diego, CA             147
  InnSuites Buena Park                     Buena Park, CA            185
                                                                   -----
                                                  Total Suites     1,665
                                                                   =====

  The Company leases these 10 hotels pursuant to individual operating leases
  which are structured on a hotel-by-hotel basis.  The lessors of these leases
  are subsidiaries of the Partnership (the "Lessors").  In accordance with the
  lessor/lessee relationship, the operating hotels are required to make
  percentage lease payments to the Lessors based on a percentage of hotel room
  revenues.  The amount of the lease payments is calculated on an individual
  hotel basis and is governed by an executed lease agreement which details the
  method of lease payment calculation.  The calculation to determine each hotel
  percentage lease payment is based on quarterly hotel revenues.

  All of the hotels offer studio and two-room suites with a variety of room
  upgrades available, such as the two-room "Executive/Family Suite", the
  "Boardroom Meeting Suite" or a "Presidential Jacuzzi Suite."  In addition, the
  hotels operate as moderate and full-service hotels near premier vacation areas
  such as the Grand Canyon and DisneyLand along with other attractions and
  business centers.

  In the current year, the Company changed its accounting period from a calendar
  year basis to a fiscal year-ended January 31.  Therefore, the financial
  statements presented for comparative purposes are presented as of and for the
  12 month periods ending January 31, 2000 and 1999. The Company did not exist
  prior to February 1, 1998.

                                      -49-
<PAGE>

2.   Summary of Significant Accounting Policies

a)   Use of Estimates

     The preparation of the financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of certain assets and
     liabilities and disclosure of contingent assets and liabilities at the
     balance sheet date and the reported amounts of revenues and expenses during
     the reporting period.  Actual results could differ from those estimates.

b)   Basis of Presentation

     The financial statements include the accounts of InnSuites Hotels, Inc. and
     the results of operations of the 10 leased hotels.

c)   Cash and Cash Equivalents

     All highly liquid investments with a maturity of three months or less when
     purchased are considered to be cash equivalents.

d)   Income Taxes

     The Company accounts for income taxes under the asset and liability method.
     Deferred tax assets and liabilities are recognized for the future
     consequences attributed to differences between the financial statement
     carrying amounts of existing assets and liabilities and their respective
     tax bases. Differences between income for financial and tax reporting
     purposes arise primarily from accrued expenses not deducted for tax.
     Deferred tax assets and liabilities are measured using enacted tax rates
     expected to apply to taxable income in the years in which those temporary
     differences are expected to be recovered or settled. The effect on deferred
     tax assets and liabilities of a change in tax rates is recognized in income
     in the period that includes the enactment date.

e)   Concentration of Credit Risk

     Financial instruments which potentially subject the Company to
     concentrations of credit risk are principally trade accounts receivable.
     The Company's receivables are unsecured.

f)   Revenue Recognition

     Revenue is recognized as earned.  Ongoing credit evaluations are performed
     and an allowance for potential credit losses is provided, if needed,
     against the portion of accounts receivable which is estimated to be
     uncollectible.  Such losses have been minimal and within management's
     expectations.

g)   Repairs and Maintenance

     Repairs and maintenance are charged to operations as incurred by the
     Company.  Costs incurred for major renovations and fixed asset purchases
     are reimbursed and capitalized by the Lessors.

h)   Advertising and Promotion

     The costs of advertising and promotional events are expensed as incurred.

i)   Fair Value of Financial Instruments

     Fair value is determined by using available market information and
     valuation methodologies. Financial instruments include cash and cash
     equivalents, accounts receivable, accounts payable and accrued expenses and
     other liabilities, which due to their short maturities, are carried at
     amounts, which reasonably approximate fair value.

                                      -50-
<PAGE>

  3.   Percentage Lease Agreements

  Percentage Leases exist between the Company's individual lessee hotels and the
  Lessors. The Percentage Leases have noncancellable lease terms which expire on
  January 31, 2008, and are subject to earlier termination on the occurrence of
  certain contingencies, as defined in the lease agreements. The rent due under
  each Percentage Lease agreement is the greater of the minimum rent, also
  defined by the lease agreement, or percentage rent. Percentage rent applicable
  to room and other hotel revenue is calculated by multiplying fixed percentages
  by the total amounts of such gross revenues in excess of specified threshold
  amounts. Both the minimum rent and the revenue thresholds used in computing
  percentage rents are subject to annual adjustments based on the United States
  Consumer Price Index ("CPI"). Percentage rent applicable to food and beverage
  revenues is calculated as 5% of such revenues over a minimum threshold.
  Percentage rent expense for the years ended January 31, 2000 and 1999 was $9.5
  million and $10.0 million, respectively, of which $2.6 million and $3.1
  million, respectively was in excess of minimum rent.

  Future minimal rentals (without reflecting future CPI increases) to be paid by
  the Company pursuant to the Percentage Lease agreements for fiscal years 2001
  to 2005 and in total thereafter are as follows:

                      2001              $ 6,850,000
                      2002                6,850,000
                      2003                6,850,000
                      2004                6,850,000
                      2005                6,850,000
                   Thereafter            20,550,000
                                        -----------
                                        $54,800,000
                                        ===========

  Other than real estate and personal property taxes, casualty insurance and
  capital improvements which are obligations of the Lessor, the Percentage
  Leases require the Company to pay rent, liability insurance premiums, and all
  costs, expenses, utilities and other charges incurred in the operation of the
  leased hotels. Property insurance premiums are allocated 50% to the Lessor and
  50% to the Company. In addition, at January 31, 2000 and 1999, outstanding
  receivables due the Company from the Lessor for the reimbursement of capital
  improvements, which were paid for by the Company, were netted with Percentage
  rent payable to the Lessor. The amounts netted against Percentage rent payable
  were approximately $731,000 and $645,000 at January 31, 2000 and 1999,
  respectively.

  The Company is required to indemnify the Lessor against all liabilities, costs
  and  expenses incurred by or asserted against the Lessor in the normal course
  of operating the hotels.

  4.    Income Taxes

  The components of the income tax expense (benefit) were as follows:

                                         For the year ended, January 31
                                                2000      1999
                                              -------------------
                         Federal:
                          Current              $   -         -
                          Deferred                 -         -
                         State and local:
                          Current                  -         -
                          Deferred                 -         -
                                             ---------  --------
                                               $   -      $  -
                                             =========  ========

                                      -51-
<PAGE>

  The provision for income taxes differs from the amount of income tax
  determined by applying the applicable U.S. statutory federal income tax rate
  to pretax income as a result of the following differences:


                                                         For the year ended,
                                                             January 31
                                                          2000         1999
                                                       ----------   ----------
              Computed "expected" tax
                Expense (benefit)                      $ (688,313)    (954,818)

              State income taxes, net
                of federal income tax effect             (106,469)    (147,894)
              Change in valuation allowance               792,062    1,100,240
              Other, net                                    2,720        2,472
                                                       ----------   ----------
              Income tax expense (benefit)             $        -            -
                                                       ==========   ==========

  The components of the Company's deferred tax assets as of January 31 were as
  follows:

                                                          2000         1999
                                                      -----------   ----------
              Deferred tax assets:
                Operating loss carryforward           $   774,000      550,000
                Accrued expenses                        1,118,000      550,000
                                                      -----------   ----------
              Gross deferred tax assets                 1,892,000    1,100,000
              Less: valuation allowance                (1,892,000)  (1,100,000)
                                                      -----------   ----------
              Deferred tax assets, net                $         -            -
                                                      ===========   ==========



  The deferred tax assets consist of differences resulting from accrued expenses
  not deductible for tax purposes and net operating loss carryforwards of
  approximately $2.8 million, which expire at various dates through January 31,
  2020.

  In assessing the realizability of deferred tax assets, management considers
  whether it is more likely than not that some portion or all of the deferred
  tax assets will not be realized. Management considers the scheduled reversal
  of deferred tax liabilities, projected future taxable income and tax planning
  strategies in making this assessment. Based upon the projections in future
  taxable income over the periods in which the deferred tax assets are
  deductible, management believes it is prudent to fully reserve the Company's
  net deferred tax assets.


  5.  Related Party Transactions

  Loans from Affiliates primarily represents $170,000 and $155,000 due to
  InnSuites Innternational Hotels, Inc. ("InnSuites") and the Partnership,
  respectively, primarily for working capital advances. InnSuites is owned by
  James F. Wirth, Chairman of the Company, who is also Chairman, President and
  CEO of the Trust. There are no terms or covenants governing these advances.
  Amounts are repaid by the Company when cash flows are adequate to cover
  current expenses as well as amounts advanced.

  InnSuites holds a management agreement with the Company whereby the Company
  incurs fees of 2.5% of hotel revenues for management, administrative and
  accounting related services. InnSuites Licensing Corporation, which is owned
  by James F. Wirth, holds a trademark license agreement with the Company
  whereby the Company incurs fees from 1.25% to 2.5% of hotel revenues for the
  use of certain brand names. The Company also pays advertising fees to
  InnSuites in the amount of 1.5% of hotel revenues for purposes of centralized
  advertising programs. Amounts paid under these agreements are as follows:

                                      -52-
<PAGE>


                              For the Year-ended January 31,
                                  2000           1999
                                  ----           ----
    Management fees           $  694,736       768,501
    Trademark license fees       533,865       300,144
    Advertising fees             413,079       429,225
                              ----------     ---------
               Total          $1,641,680     1,497,870
                              ==========     =========

  James F. Wirth contributed $250,000 and $480,000 for the years ended January
  31, 2000 and 1999 for working capital needs of certain hotels. These amounts
  are recorded as capital contributions.

  6.  Commitments and Contingencies

  Claims and Legal Matters

  The nature of the operations of the Company and its hotels exposes them to the
  risk of claims and litigation in the normal course of business.  Although the
  outcome of these matters cannot be determined, management believes the
  aggregate potential losses, if any, would not have a material adverse effect
  on the Company's consolidated financial position or results of operations.

  Franchise Agreements

  The Company has franchise agreements with Best Western(R) and Holiday Inn(R)
  hotels in which fees generally approximate 3% of monthly revenues for Best
  Western(R) and 9% of monthly revenues for Holiday Inn(R).

  7.  401(k) Benefit Plan

  All employees of the Company who have attained the age of twenty-one and have
  completed one year's service are eligible to participate in a contributory
  defined contribution 401(k) benefit plan.  Under the plan, participants may
  contribute up to 6% of their salary.  The Company matches 25% of the employee
  contribution.  Benefit expense under the plan amounted to $25,022 and $17,822
  for the years ended January 31, 2000 and 1999, respectively.

  8.  Liquidity

  The financial statements of the Trust disclose that a provision was recorded
  for all percentage rent receivables from the Company as of January 31, 2000.
  The Company has the ability to obtain funds for working capital needs from
  third parties or affiliates to fund short-term working capital needs. Based on
  the structure of the Company and its relationship with the Trust as the
  exclusive lessee, all payments of percentage rent expense are not called.
  Excluding percentage rent expense, all of the Hotels are cash flow positive
  and generated net income for the year ended January 31, 2000. The Trust may
  restructure and acquire the Company in January 2001 following the guidelines
  of the REIT Modernization Act. Therefore, Management believes the Company will
  continue as a going concern over the next twelve months.

                                      -53-
<PAGE>

                                   PART III
                                   --------


Item 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE TRUST.
         ---------------------------------------------

Trustees of the Trust

     The Trust incorporates herein by reference the information appearing under
the caption "Election of Trustees" in the Trust's definitive Proxy Statement to
be filed with the Securities and Exchange Commission on or about May 30, 2000.

Executive Officers of the Trust

     The name, age (as of January 31, 2000), business experience during the past
five years, and offices presently held by each of the Trust's executive officers
are reported below. The Trust's By-Laws provide that officers shall hold office
until their successors are duly elected and qualified and that any officer may
be removed from office at any time by the Trust's Trustees.

     JAMES F. WIRTH: Age 53; Chairman, President and Chief Executive Officer of
the Trust since January 30, 1998. Chairman of InnSuites Innternational Hotels,
Inc., Hospitality Corporation International and affiliated entities, owners and
operators of hotels, since 1980. Chairman and President of Rare Earth
Development Company, a real estate investment company, since 1973.

     MARC E. BERG: Age 47; Executive Vice President, Secretary and Treasurer of
the Trust since February 10, 1999. Vice President - Acquisitions for the Trust
from December 16, 1998 to February 10, 1999. Trustee since January 30, 1998.
Consultant to InnSuites Hotels system and self-employed as a registered
investment advisor since 1985.

     ANTHONY B. WATERS: Age 53; Chief Financial Officer of the Trust since
February 29, 2000. Controller for the Trust since June 17, 1999. Accountant and
auditor for Michael Maastricht, CPA from June 16, 1998 to June 15, 1999
performing audits for InnSuites Hotels, Inc. Self-employed, concentrating in
computerized accounting and information systems since 1990.


Section 16(a) Beneficial Ownership Reporting Compliance

     The Trust incorporates herein by reference the information appearing under
the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Trust's definitive Proxy Statement to be filed with the Securities and Exchange
Commission on or about May 30, 2000.


Item 11. EXECUTIVE COMPENSATION.
         ----------------------

     The Trust incorporates herein by reference the information appearing under
the caption "Compensation of Trustees and Executive Officers" in the Trust's
definitive Proxy Statement to be filed with the Securities and Exchange
Commission on or about May 30, 2000.


Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
         --------------------------------------------------------------

     The Trust incorporates herein by reference the information appearing under
the caption "Ownership of Common Shares" in the Trust's definitive Proxy
Statement to be filed with the Securities and Exchange Commission on or about
May 30, 2000.

                                      -54-
<PAGE>

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
         -----------------------------------------------

     The Trust incorporates herein by reference the information appearing under
the caption "Certain Transactions" in the Trust's definitive Proxy Statement to
be filed with the Securities and Exchange Commission on or about May 30, 2000.


                                    PART IV
                                    -------

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
          -------------------------------------------------------------
Exhibits
--------

3(a)      Second Amended and Restated Declaration of Trust dated June 16, 1999,
          as further amended on July 12, 1999 (incorporated by reference to
          Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the
          quarter year ended July 31, 1999, filed with the Securities and
          Exchange Commission on September 14, 1999).

10(a)     First Amended and Restated Agreement of Limited Partnership of RRF
          Limited Partnership dated January 31, 1998 (incorporated by reference
          to Exhibit 10.1 of the Registrant's Registration Statement on Form
          S-2, filed with the Securities and Exchange Commission on September 8,
          1998).

10(b)*    Employment Agreement dated as of January 31, 1998, between the Trust
          and James F. Wirth. (incorporated by reference to Exhibit 10(b) of the
          Registrant's Annual Report on Form 10-K for the fiscal year ended
          January 31, 1998, filed with the Securities and Exchange Commission on
          May 18, 1998).

10(c)     Formation Agreement among the Trust; MARA; Alan M. Krause; James H.
          Berick; Hospitality Corporation International; InnSuites Hotels,
          L.L.C.; James F. Wirth; Tucson Hospitality Properties, Ltd.; Yuma
          Hospitality Properties, Ltd.; Baseline Hospitality Properties, Ltd.;
          Northern Phoenix Investment Limited Partnership; Ontario Hospitality
          Properties Limited Partnership; Hulsey Hotels Corporation; and
          Buenaventura Properties, Inc. (incorporated by reference to Exhibit
          2.1 of the Registrant's Current Report on Form 8-K, dated and filed
          with the Securities and Exchange Commission on February 17, 1998).


10(d)     Contribution Agreement dated as of February 1, 1998, among James F.
          Wirth, Gail J. Wirth and RRF Limited Partnership (incorporated by
          reference to Exhibit 2.1 of the Registrant's Current Report on Form
          8-K, dated and filed with the Securities and Exchange Commission on
          March 16, 1998).

10(e)     Agreement of Purchase and Sale and Joint Escrow Instructions dated
          March 20, 1998, between Lafayette Hotel, LLC and RRF Limited
          Partnership (incorporated by reference to Exhibit 2.1 of the
          Registrant's Current Report on Form 8-K, dated and filed with the
          Securities and Exchange Commission on May 14, 1998).

10(f)     Contribution Agreement dated as of June 1, 1998, among James F. Wirth,
          Steven S. Robson and RRF Limited Partnership (incorporated by
          reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-
          K, filed with the Securities and Exchange Commission on September 2,
          1998).

                                      -55-
<PAGE>


10(g)     Consent Agreement dated as of January 31, 1999, among RRF Limited
          Partnership, James F. Wirth, Gail J. Wirth, Alan M. Krause and James
          H. Berick (incorporated by reference to Exhibit 10(g) of the
          Registrant's Annual Report on Form 10-K/A for the fiscal year ended
          January 31, 1999, filed with the Securities and Exchange Commission on
          May 27, 1999).

10(h)     Continuing Guaranty dated as of January 31, 1999, by RRF Limited
          Partnership (incorporated by reference to Exhibit 10(h) of the
          Registrant's Annual Report on Form 10-K/A for the fiscal year ended
          January 31, 1999, filed with the Securities and Exchange Commission on
          May 27, 1999).

10(i)     Promissory Note dated March 15, 1999 by InnSuites Hospitality Trust in
          favor of James F. Wirth (incorporated by reference to Exhibit 10.1 of
          the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended April 30, 1999, filed with the Securities and Exchange
          Commission on June 14, 1999).

10(j)     Promissory Note dated June 14, 1999 by InnSuites Hospitality Trust in
          favor of James F. Wirth (incorporated by reference to Exhibit 10.1 of
          the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended July 31, 1999, filed with the Securities and Exchange Commission
          on September 14, 1999).

10(k)     Promissory Note dated July 27, 1999 by InnSuites Hospitality Trust in
          favor of James F. Wirth (incorporated by reference to Exhibit 10.2 of
          the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended July 31, 1999, filed with the Securities and Exchange
          Commission on September 14, 1999).

10(l)     Promissory Note dated August 17, 1999 by InnSuites Hospitality Trust
          in favor of James F. Wirth (incorporated by reference to Exhibit 10.1
          of the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended October 31, 1999, filed with the Securities and Exchange
          Commission on December 15, 1999).

10(m)     Promissory Note dated October 12, 1999 by InnSuites Hospitality Trust
          in favor of James F. Wirth (incorporated by reference to Exhibit 10.2
          of the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended October 31, 1999, filed with the Securities and Exchange
          Commission on December 15, 1999).

10(n)     Promissory Note dated October 14, 1999 by InnSuites Hospitality Trust
          in favor of James F. Wirth (incorporated by reference to Exhibit 10.3
          of the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended October 31, 1999, filed with the Securities and Exchange
          Commission on December 15, 1999).

10(o)     Intercompany Agreement dated October 12, 1999, among RRF Limited
          Partnership, InnSuites Hotels, Inc., and InnSuites Innternational
          Hotels, Inc.

21        Subsidiaries of the Registrant (incorporated by reference to Exhibit
          21 of the Registrant's Annual Report on Form 10-K for the fiscal year
          ended January 31, 1998, filed with the Securities and Exchange
          Commission on May 18, 1998).

27**      Financial Data Schedule.

99.1      Form of Percentage Lease (incorporated by reference to Exhibit 99.1 of
          the Registrant's Registration Statement on Form S-2 filed with the
          Securities and Exchange Commission on September 8, 1998).

*    Management contract or compensatory plan or arrangement required to be
     filed as an exhibit hereto.
**   Filed only in electronic format pursuant to Item 601(b)(27) of Regulation
     S-K.

                                      -56-
<PAGE>




Forms 8-K
---------

     No Current Reports on Form 8-K were filed by the Trust during the fourth
fiscal quarter ended January 31, 2000.

                                      -57-
<PAGE>

                                  SIGNATURES
                                  ----------

          Pursuant to the requirements of Section 13 or 15(d) of Securities
Exchange Act of 1934, the Trust has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                   INNSUITES HOSPITALITY TRUST


Dated: May 16, 2000                By: /s/ James F. Wirth
                                       -----------------------------
                                       James F. Wirth, Chairman,
                                       President and Chief Executive
                                       Officer (Principal Executive
                                       Officer)


Dated: May 16, 2000                By: /s/ Anthony B. Waters
                                       -----------------------------
                                       Anthony B. Waters,
                                       Chief Financial Officer
                                       (Principal Accounting Officer)

          Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Trust and in the capacities and on the dates indicated.


                                       /s/ James F. Wirth
Dated: May 16, 2000                    -----------------------------
                                       James F. Wirth, Trustee, Chairman,
                                       President and Chief Executive
                                       Officer



                                       /s/ Anthony B. Waters
Dated: May 16, 2000                    -----------------------------
                                       Anthony B. Waters,
                                       Chief Financial Officer



                                       /s/ Marc E. Berg
Dated: May 16, 2000                    -----------------------------
                                       Marc E. Berg, Trustee



                                       /s/ Steven S. Robson
Dated: May 16, 2000                    -----------------------------
                                       Steven S. Robson, Trustee


                                       /s/ Lee J. Flory
Dated: May 16, 2000                    -----------------------------
                                       Lee J. Flory


                                      -58-




<PAGE>

Index of Exhibits
-----------------

Exhibit Number

3(a)      Second Amended and Restated Declaration of Trust dated June 16, 1999,
          as further amended on July 12, 1999 (incorporated by reference to
          Exhibit 3.1 of the Registrant's Quarterly Report on Form 10-Q for the
          quarter year ended July 31, 1999, filed with the Securities and
          Exchange Commission on September 14, 1999).

10(a)     First Amended and Restated Agreement of Limited Partnership of RRF
          Limited Partnership dated January 31, 1998 (incorporated by reference
          to Exhibit 10.1 of the Registrant's Registration Statement on
          Form S-2, filed with the Securities and Exchange Commission on
          September 8, 1998).

10(b)*    Employment Agreement dated as of January 31, 1998, between the Trust
          and James F. Wirth. (incorporated by reference to Exhibit 10(b) of the
          Registrant's Annual Report on Form 10-K for the fiscal year ended
          January 31, 1998, filed with the Securities and Exchange Commission on
          May 18, 1998).

10(c)     Formation Agreement among the Trust; MARA; Alan M. Krause; James H.
          Berick; Hospitality Corporation International; InnSuites Hotels,
          L.L.C.; James F. Wirth; Tucson Hospitality Properties, Ltd.; Yuma
          Hospitality Properties, Ltd.; Baseline Hospitality Properties, Ltd.;
          Northern Phoenix Investment Limited Partnership; Ontario Hospitality
          Properties Limited Partnership; Hulsey Hotels Corporation; and
          Buenaventura Properties, Inc. (incorporated by reference to Exhibit
          2.1 of the Registrant's Current Report on Form 8-K, dated and filed
          with the Securities and Exchange Commission on February 17, 1998).

10(d)     Contribution Agreement dated as of February 1, 1998, among James F.
          Wirth, Gail J. Wirth and RRF Limited Partnership (incorporated by
          reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-
          K, dated and filed with the Securities and Exchange Commission on
          March 16, 1998).

10(e)     Agreement of Purchase and Sale and Joint Escrow Instructions dated
          March 20, 1998, between Lafayette Hotel, LLC and RRF Limited
          Partnership (incorporated by reference to Exhibit 2.1 of the
          Registrant's Current Report on Form 8-K, dated and filed with the
          Securities and Exchange Commission on May 14, 1998).

10(f)     Contribution Agreement dated as of June 1, 1998, among James F. Wirth,
          Steven S. Robson and RRF Limited Partnership (incorporated by
          reference to Exhibit 2.1 of the Registrant's Current Report on Form 8-
          K, filed with the Securities and Exchange Commission on September 2,
          1998).

10(g)     Consent Agreement dated as of January 31, 1999, among RRF Limited
          Partnership, James F. Wirth, Gail J. Wirth, Alan M. Krause and James
          H. Berick (incorporated by reference to Exhibit 10(g) of the
          Registrant's Annual Report on Form 10-K/A for the fiscal year ended
          January 31, 1999, filed with the Securities and Exchange Commission on
          May 27, 1999).

10(h)     Continuing Guaranty dated as of January 31, 1999, by RRF Limited
          Partnership (incorporated by reference to Exhibit 10(h) of the
          Registrant's Annual Report on Form 10-K/A for the fiscal year ended
          January 31, 1999, filed with the Securities and Exchange Commission on
          May 27, 1999).

                                      -59-
<PAGE>

10(i)     Promissory Note dated March 15, 1999 by InnSuites Hospitality Trust in
          favor of James F. Wirth (incorporated by reference to Exhibit 10.1 of
          the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended April 30, 1999, filed with the Securities and Exchange
          Commission on June 14, 1999).

10(j)     Promissory Note dated June 14, 1999 by InnSuites Hospitality Trust in
          favor of James F. Wirth (incorporated by reference to Exhibit 10.1 of
          the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended July 31, 1999, filed with the Securities and Exchange Commission
          on September 14, 1999).

10(k)     Promissory Note dated July 27, 1999 by InnSuites Hospitality Trust in
          favor of James F. Wirth (incorporated by reference to Exhibit 10.2 of
          the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended July 31, 1999, filed with the Securities and Exchange
          Commission on September 14, 1999).

10(l)     Promissory Note dated August 17, 1999 by InnSuites Hospitality Trust
          in favor of James F. Wirth (incorporated by reference to Exhibit 10.1
          of the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended October 31, 1999, filed with the Securities and Exchange
          Commission on December 15, 1999).

10(m)     Promissory Note dated October 12, 1999 by InnSuites Hospitality Trust
          in favor of James F. Wirth (incorporated by reference to Exhibit 10.2
          of the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended October 31, 1999, filed with the Securities and Exchange
          Commission on December 15, 1999).

10(n)     Promissory Note dated October 14, 1999 by InnSuites Hospitality Trust
          in favor of James F. Wirth (incorporated by reference to Exhibit 10.3
          of the Registrant's Quarterly Report on Form 10-Q for the quarter year
          ended October 31, 1999, filed with the Securities and Exchange
          Commission on December 15, 1999).

10(o)     Intercompany Agreement dated October 12, 1999, among RRF Limited
          Partnership, InnSuites Hotels, Inc., and InnSuites Innternational
          Hotels, Inc.

21        Subsidiaries of the Registrant (incorporated by reference to Exhibit
          21 of the Registrant's Annual Report on Form 10-K for the fiscal year
          ended January 31, 1998, filed with the Securities and Exchange
          Commission on May 18, 1998).

27**      Financial Data Schedule.

99.1      Form of Percentage Lease (incorporated by reference to Exhibit 99.1 of
          the Registrant's Registration Statement on Form S-2 filed with the
          Securities and Exchange Commission on September 8, 1998).


*    Management contract or compensatory plan or arrangement required to be
     filed as an exhibit hereto.

**   Filed only in electronic format pursuant to Item 601(b)(27) of Regulation
     S-K.

                                      -60-