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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________

FORM 10-Q

_________________

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QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JULY 31, 1999

APRIL 30, 2000
Commission File Number 1-7062
INNSUITES HOSPITALITY TRUST
(Exact
(Exact name of registrant as specified in its charter)

Ohio 34-6647590
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)

OHIO 34-6647590
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
InnSuites Hotels Centre
1625 E. Northern Ave., Suite 201
Phoenix, AZ 85020
(Address
(Address of principal executive offices)
Registrant's telephone number, including area code (602) 944-1500
Indicate by check mark whether the registrant: (l) has filed all reports required to be filed by Section 13 or l5(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] X No [ ]
Number of outstanding Shares of Beneficial Interest, without par value, as of SeptemberJune 5, 2000: 2,448,657.
PART 1 1999: 2,335,802

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2
PART I

FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INNSUITES HOSPITALITY TRUST CONSOLIDATED AND SUBSIDIARY
BALANCE SHEETS

JULY 31, 1999 JANUARY 31, 1999
------------- ----------------
(UNAUDITED)

ASSETS

Hotel properties, net ................................................................... $65,448,638 $65,509,187
Cash and cash equivalents ............................................................... 735,362 420,935
Percentage rent receivable from affiliate ............................................... 980,555 788,179
Interest receivable and other assets .................................................... 1,337,242 1,086,469
----------- -----------
$68,501,797 $67,804,770
=========== ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Mortgage notes payable .................................................................. $24,033,298 $23,161,052
Notes payable to banks .................................................................. 11,300,000 11,300,000
Other notes payable ..................................................................... -- 450,000
Notes payable to related parties ........................................................ 2,351,000 2,013,782
Accounts payable and accrued expenses ................................................... 1,617,782 2,188,709
Minority interest in partnership ........................................................ 20,436,358 20,621,900

SHAREHOLDERS' EQUITY:

Shares of beneficial interest, without par value; unlimited authorization;
2,335,802 shares outstanding at July 31, 1999 and 2,286,951 shares
outstanding at January 31, 1999 8,763,359 8,069,327
----------- -----------
$68,501,797 $67,804,770
=========== ===========

The
APRIL 30, 2000 JANUARY 31, 2000
ASSETS (UNAUDITED) (AUDITED)
Hotel properties, net $ 64,125,135 $ 64,479,187
Cash and cash equivalents 225,846 208,109
Rent receivable from affiliate,
net of $3,100,890 and $2,845,732 allowance respectively — —
Interest receivable and other assets 595,715 618,063
TOTAL ASSETS $ 64,946,696 $ 65,305,519
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Mortgage notes payable $ 24,071,090 $ 24,251,662
Notes payable to banks 11,300,000 11,300,000
Other notes payable — 225,000
Advances payable to related parties 2,625,000 2,970,000
Accounts payable and accrued expenses 780,364 1,138,168
TOTAL LIABILITIES $ 38,776,455 39,884,830
MINORITY INTEREST IN PARTNERSHIP 17,293,861 16,789,423
SHAREHOLDERS' EQUITY
Shares of beneficial interest, without par value; unlimited
authorization; 2,441,449 and 2,507,949 shares issued and
outstanding at April 30 and January 31, 2000, respectively 9,488,256 9,093,020
Treasury stock (611,875 ) (461,754 )
TOTAL SHAREHOLDERS' EQUITY $ 8,876,381 8,631,266
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 64,946,696 $ 65,305,519
See accompanying notes are an integral part of theseto unaudited financial statements. 3

INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

FOR THE SIX MONTHS ENDED JULY 31,

REVENUES 1999 1998
----------- -----------

Rent revenue from affiliate .................................................. $ 5,358,494 $ 4,731,492
Interest income .............................................................. 19,876 19,780
Other income ................................................................. 9,591 --
----------- -----------

5,387,961 4,751,272
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EXPENSES

Real estate depreciation ..................................................... 1,277,220 1,110,274
Real estate and personal property taxes, insurance and ground rent ........... 643,930 553,679
General and administrative ................................................... 907,604 813,585
Interest on mortgage notes payable ........................................... 1,040,032 1,084,209
Interest on notes payable to banks ........................................... 484,213 181,795
Interest on note payable to related party .................................... 85,391 --
Advisory fee paid to related party ........................................... -- 303,969
Amortization of loan fees .................................................... 44,434 --
----------- -----------

4,482,824 4,047,511
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INCOME BEFORE MINORITY INTEREST ................................................... 905,137 703,761

MINORITY INTEREST ................................................................. (562,953) (628,679)
----------- -----------
NET INCOME ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST .......................... $ 342,184 $ 75,082
=========== ===========
EARNINGS PER SHARE-- basic ........................................................ $ .15 $ .04
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING-- basic ............................. 2,311,196 1,667,817
=========== ===========
EARNINGS PER SHARE - diluted ...................................................... $ .15 $ .03
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - diluted ........................... 3,180,947 3,873,215
=========== ===========

TheOPERATIONS
FOR THE THREE MONTH PERIOD ENDED APRIL 30,
2000
1999
(Restated)
REVENUES
Rent revenue from affiliate $ 3,319,046 3,255,511
Interest income 2,263 19,876
Other income — 9,591
TOTAL REVENUES $ 3,321,309 3,284,978
EXPENSES
Real estate depreciation $ 665,706 618,363
Real estate and personal property taxes
insurance and ground rent, 342,852 375,727
General and administrative 468,886 517,376
Interest on mortgage notes payable 545,100 503,550
Interest on notes payable to banks 245,897 251,206
Interest on note payable to related party 49,830 25,211
Amortization of loan fees 16,265 257
TOTAL EXPENSES $ 2,334,537 2,291,690
INCOME BEFORE MINORITY INTEREST $ 986,773 993,288
LESS: MINORITY INTEREST $ 594,284 613,981
NET INCOME ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST $ 392,489 379,307
EARNINGS PER SHARE — basic $ .16 .16
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING — basic 2,474,377 2,321,133
EARNINGS PER SHARE — diluted $ .10 .10
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING — diluted 9,733,222 10,090,213
See accompanying notes are an integral part of theseto unaudited financial statements. 4

INNSUITES HOSPITALITY TRUST AND SUBSIDARY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTHS ENDED JULY 31,

REVENUES 1999 1998
----------- -----------

Rent revenue from affiliate ................................................. $ 2,102,983 $ 2,013,162
Interest income ............................................................. -- 8,435
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2,102,983 2,021,597
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EXPENSES

Real estate depreciation .................................................... 658,857 591,005
Real estate and personal property taxes, insurance and ground rent .......... 268,203 324,185
General and administrative .................................................. 390,228 382,959
Interest on mortgage notes payable .......................................... 536,482 455,697
Interest on notes payable to banks .......................................... 233,007 181,795
Interest on note payable to related party ................................... 60,180 --
Advisory fee paid to related party .......................................... -- 159,816
Amortization of loan fees ................................................... 44,177 --
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2,191,134 2,095,457
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INCOME BEFORE MINORITY INTEREST .................................................. (88,151) (73,860)

MINORITY INTEREST ................................................................ (51,028) 23,956
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NET LOSS ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST ........................... $ (37,123) $ (97,816)
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EARNINGS (LOSS) PER SHARE-- basic and diluted .................................... $ (.02) $ (.06)
=========== ===========

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING--basic and diluted .............................................. 2,301,258 1,667,817
=========== ===========

TheCASH FLOWS
FOR THE THREE MONTHS ENDED APRIL 30,
2000
1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 392,489 379,307
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock option compensation expense 13,129 —
Depreciation and amortization 681,971 618,620
Minority interest 594,284 613,981
(Increase) Decrease in interest receivable and other
assets 6,084 (364,822 )
Increase in percentage rent receivable (255,158 ) (331,474 )
Provision for uncollectible receivable from affiliate 255,158 —
Decrease in accounts payable and accrued expenses (357,805 ) (409,938 )
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 1,330,152 505,674
CASH FLOWS FROM INVESTING ACTIVITIES
Improvements and additions to hotel properties (311,494 ) (615,940 )
NET CASH (USED IN) INVESTING ACTIVITIES $ (311,494 ) (615,940 )
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgage notes payable $ (180,572 ) (699,341 )
Issuance (Repurchase) of shares (150,120 ) 177,573
Refinancing of mortgage notes payable — 1,751,920
Payments on other notes payable (225,000 ) (450,000 )
Repurchase of partnership units (73,822 ) (269,183 )
Payment of dividends (26,407 ) —
Advances from related parties — 2,000,000
Payments on advances from related parties (345,000 ) (1,982,782 )
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES $ (1,000,921 ) 528,187
NET INCREASE IN CASH AND CASH EQUIVALENTS $ 17,737 417,921
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD $ 208,109 420,935
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 225,846 838,856
See accompanying notes are an integral part of theseto unaudited financial statements. 5

INNSUITES HOSPITALITY TRUST
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JULY 31,
1999 1998
----------- -----------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 342,184 $ 75,082

Adjustments to reconcile net income to net cash provided by operating
activities:

Minority interest 562,953 628,679

Depreciation and amortization 1,321,654 1,110,274

Decrease in amounts due lessee -- (600,549)

Increase in percentage rent receivable (192,376) --

Increase in interest receivable and other assets (295,207) (634,010)

Increase (decrease) in accounts payable and accrued expenses (570,927) 713,402

Increase in deferred revenue -- 738,674
----------- -----------

Net cash provided by operating activities 1,168,281 2,031,552
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CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of hotel properties -- (1,448,000)

Improvements and additions to hotel properties (1,216,671) (1,012,967)
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Net cash used in investing activities (1,216,671) (2,460,967)
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CASH FLOWS FROM FINANCING ACTIVITIES:

Net bank borrowings -- 8,344,982

Payments of mortgage notes payable (879,674) (7,000,624)

Refinancing of mortgage notes payable 1,751,920 --

Payments of other notes payable (450,000) (218,063)

Repurchase of partnership units (396,647) --

Notes payable and advances to/from related parties 337,218 (2,357,708)
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Net cash provided by (used in) financing activities 362,817 (1,231,413)
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NET CHANGE IN CASH AND CASH EQUIVALENTS 314,427 (1,660,828)
----------- -----------

CASH AT BEGINNING OF PERIOD 420,935 2,378,398
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CASH AT END OF PERIOD $ 735,362 $ 717,570
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INNSUITES HOSPITALITY TRUST AND SUBSIDIARY
NOTES TO UNAUDITED FINANCIAL STATEMENTS

JULY 31,
As of and for the three months ended APRIL 30, 2000 and 1999 AND 1998

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION:

Prior to fiscal 1999,
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, (the Trust or the Company) 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)"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.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."Hotels". The Hotels are leased to InnSuites Hotels, Inc., formerly known as Realty Hotel Lessee Corp. (the Lessee)"Lessee"), pursuant to leases, which contain provisions for rent based on the revenues of the Hotels (the Percentage Leases)"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 3 month period ended April 30, 2000, the Trust's general partnership interest in the Partnership was 45.1% and 45.0% (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 July 31, 1999,April 30, 2000, a total of 2,404,9392,032,481 Class A limited partnership units were issued and outstanding. Additionally a total of 5,246,3645,226,364 Class B limited partnership units were outstanding at July 31, 1999 to Wirth and his affiliates, in lieu of the issuance of Class A limited partnership units. If all of the Class A and B limited partnership units were to be converted, the limited partners in the Partnership would hold 2,404,939receive 7,258,845 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.
Basis of Presentation
As sole general partner, the Trust exercises unilateral control over the Partnership. Therefore, the financial statements of the Partnership and its
wholly owned subsidiary (see note 7) are consolidated with the Trust. All significant intercompany transactions and balances have been eliminated.
These consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-monththree-month period ended July 31, 1999April 30, 2000 are not necessarily indicative of the results that may be expected for the year ended January 31, 2000.2001. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company'sTrust's Annual Report on Form 10-K/A as of and for the year 7

ended January 31, 1999.

2000.
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, andthe disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
2. REVENUE RECOGNITION:

In May 1998,
Trust revenues are earned monthly as per the Financial Accounting Standards Board's Emerging Issues
Task Force 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 company 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.

Leases and recognized when earned.
3. EARNINGS PER SHARE:

In February 1997,
SFAS No. 128, "Earnings Perper Share", was issued which
eliminated 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 averageweighted-average number of shares outstanding during the periods.
For the six-month periodsquarters ended July 31,April 30, 2000 and 1999, and 1998, there were Class A and Class B partnership units outstanding, which are convertible to shares of beneficial interest of the Trust. Assuming conversion, the weighted averageaggregated weighted-average of these shares of beneficial interest would be 869,7517,258,845 in the first quarter of fiscal 2001 and 2,205,398,
respectively, and net income attributable to shares7,769,080 in the first quarter of beneficial interest would
be increased by $123,872 and $58,943, respectively.

In connection with the purchase of the Scottsdale hotel by the
Partnership on April 2, 1999 (see Note 7), the Class A partnership units do not
have a dilutive effect on the statement of income for the three months ended
July 31, 1999 since the minority interests' share of income for the three months
ended July 31, 1999 would increase net income proportionately to the increase in
weighted average shares of beneficial interest. For the three-month period ended
July 31, 1998, there were Class A partnership units outstanding which are
convertible to shares of beneficial interest of the Trust. Assuming conversion,
the weighted average of these shares would be 2,205,398.fiscal 2000. These shares are anti-dilutivedilutive due to the lossearnings for the three-month period.

first quarters of fiscal years 2001 and 2000.
4. ACQUISITIONS:

Effective February 1, 1998,
There were no hotel acquisitions during the Partnership acquired 100%first quarter 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 Hotel Buena Park for $7,100,000. The Partnership assumed
$4,116,754 in mortgage debt and other obligations and issued 628,052 limited

partnership units to Wirth and Steven S. Robson (of which 13,034 units were
subsequently paid to a third 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.

All of the aforementioned acquisitions were accounted for as purchases.

fiscal 2001.
5. CREDIT FACILITY:

In April 1998,
During the first quarter of fiscal 1999, the Trust established a $12,000,000 secured revolving line of credit with Pacific Century Bank. The credit facility requires the Trust, among other things, the Trust to maintain a minimum net worth, a specified coverage ratio of EBITDAearnings 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.
6. PERCENTAGE LEASE AGREEMENTS:

As previously stated, effective August 1, 1998, the Company 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 the Hotels for each of the next five fiscal years and in total thereafter are as follows:
Fiscal 2000............................................... $3,425,000
Fiscal 2001............................................... 6,850,000
Fiscal 2002............................................... 6,850,000
Fiscal 2003............................................... 6,850,000
Fiscal 2004............................................... 6,850,000
Thereafter................................................ 27,400,000
------------
$58,225,000
===========
Fiscal
2001 $ 5,137,500
2002 6,850,000
2003 6,850,000
2004 6,850,000
2005 6,850,000
Thereafter 20,550,000
$ 53,087,500
The Trust earned approximately $3.3 million in rent revenue during both the first quarter of fiscal 2001 and 2000, of which approximately $1.6 million and $1.5 million, respectively, was in excess of base rent. After a review of projected cash flows to assess the future collectiblity of current rents, the Trust recorded a provision for uncollectible rent receivables of $255,158 for the first quarter of fiscal 2001.
7. RELATED PARTY TRANSACTIONS:
The Partnership is responsible for all expenses incurred by the Trust in accordance with the Partnership Agreement.
Wirth beneficially ownsis a 9.8% of the common stockindirect shareholder of the Lessee. The
Lessee was the sole source of the Trust's Percentage Lease revenue during the
six-month period ended July 31, 1999.

Wirth made an unsecured loan toAt April 30, 2000 the Trust had an $185,000 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 $2 million, bearing
interest at 7% per year effective March 15, 1999.Beneficial 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.

Wirth made an unsecured loan to the Trust 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 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 is using the proceeds to fund
operations.

Effective April 2, 1999, the Trust transferred its interest in the
Scottsdale property to the Partnership in exchange for 1,600,000 generaltheir interests in the Initial Hotels. As of April 30, 2000, Wirth and his affiliates held 5,226,364 Class B limited partnership units. There was no gain or loss resulting from the transfer as the
transaction involved entities under common control.

8. STATEMENTS OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES:

The Trust issued 109,451As of April 30, 2000 Wirth and his affiliates held 834,613 shares of beneficial interest valued at
$351,848 in exchange for Class A partnership units.

9. PRO FORMA RESULTS OF OPERATIONS OF THE TRUST:

The unaudited pro forma financial information set forth below forthe Trust.
At April 30, 2000, the Trust is presented as if the San Diego and Buena Park properties had been
acquired as of February 1, 1998. The pro forma financial information is not
necessarily indicative of what the actual results of operations of the Trust
would have been assuming the two properties were acquired as of February 1,
1998, nor does it purport to represent the results of operations for future
periods.

PRO FORMA
SIX MONTH PERIOD ENDED JULY 31,
1998 1999
--------- ---------
(Unaudited, in thousands except per share data)

Percentage lease revenue ..................................................... $5,108 $5,358
Interest and other income .................................................... 20 29
------ ------
Total revenues ...................................................... 5,128 5,387

Interest expense on mortgage and other notes payable ......................... $1,423 $1,610
Depreciation and amortization ................................................ 1,241 1,321
General and administration ................................................... 1,168 907
Real estate and personal property taxes,
insurance and ground rent ........................................... 591 644
Minority interest ............................................................ 630 563
------ ------
Total expenses and minority interest ................................ 5,053 5,045
------ ------
Net income attributable to shares of beneficial interest ..................... $ 75 $ 342
====== ======
Earnings per share-basic ..................................................... $ .04 $ .15
====== ======
Earnings per share-diluted ................................................... $ .03 $ .15
====== ======
10

10. UNAUDITED STATEMENTS OF OPERATIONS OF INNSUITES HOTELS, INC. (LESSEE)

Certain condensed financial information, related to the Lessee's
operations is as follows:

INNSUITES HOTELS, INC.
STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS)

For the six-months ended
June 30,

1999 1998
------- -------

Revenues from hotel operations:
Room revenue as defined by lease........................ $ 14,342 $ 13,464
Other revenue........................................... 1,500 1,098
-------- --------
Total revenues .................................. 15,842 14,562

Expenses:
Operating expenses...................................... 7,117 5,906
Percentage lease expense................................ 6,034 6,115
Advertising............................................. 1,087 922
Other expenses.......................................... 2,115 3,828
-------- --------
Total expenses .................................. 16,353 16,771
-------- --------
Net income (loss) ................................................ $ (511) $ (2,209)
======== ========

ITEM 2. 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 condensed consolidated financial statements, the
Innsuites Hotels, Inc. (the "Lessee") results of operations, and notes thereto
appearing elsewhere in this quarterly report, respectively.

InnSuites Hospitality Trust (the "Trust") is a real estate investment
trust which owns the sole general partner interest in RRF Limited Partnership
(the "Partnership") and 100% of RRF Sub Corp. (Unless the context indicates
otherwise, all references to the Partnership shall include RRF Sub Corp.)
In order for the Trust to qualify as a real estate investment trust under the
Internal Revenue Code of 1986, as amended (a "REIT"), neither the Trust nor the
Partnership can operate the hotels. Therefore, each of the hotels is leased to,
and operated by, the Lessee (formerly known as Realty Hotel Lessee Corp.)
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 revenue 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.

At July 31, 1999, the Company owned a 42%45.1% 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: 11

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 of $2
million 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 loanedmade an unsecured loan to the Trust $2.615in 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 lentloaned by the Partnership was generated by refinancing the Northern Phoenix hotel and borrowing an additional $1.75$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 soldtransferred, at historical cost of approximately $7 million, its interest in the Scottsdale property to the Partnership for its appraised value of approximately $7 million in exchange for 1.6 million general partner units.
The Trust's primary sourceTrust repurchased 36,911 in the first quarter of revenue is rent payments byfiscal 2001 and 131,493 in fiscal 2000 of the Lessee
under Percentage Leases covering allPartnership's Class A units at a weighted average price per unit of $2.00 and $4.10, respectively. These units were retired.
The Trust paid interest on related party notes to Wirth in the Hotels in operation. amount of $143,597 for the three months ended April 30, 2000.
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.
Loans payable to related parties consists of funds provided by Wirth to repurchase Partnership units and to fund working capital and capital improvement needs. The aggregate amounts outstanding were approximately $2.6 million and $3.0 million as of April 30 and January 31, 2000, respectively. The loans payable to related parties 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.
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. At April 30, 2000, the unpaid balance on this note was $25,000. Subsequently, on May 17, 2000, the loan was paid in full.
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.
8. STATEMENTS OF CASH FLOWS, SUPPLEMENTAL DISCLOSURES:
The Trust issued 3,000 shares of beneficial interest during the quarter ended April 30, 2000 valued at $6,375 in exchange for Class A limited partnership units.
The Trust paid $99,394 in dividends and distributions in the quarter ended April 30, 2000.
9. STATEMENTS OF OPERATIONS OF INNSUITES HOTELS, INC. (LESSEE)
Certain condensed financial information related to the Lessee's operations is as follows:
INNSUITES HOTELS, INC.
UNAUDITED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS)
THREE MONTHS ENDED APRIL 30,
2000
1999
REVENUES FROM HOTEL OPERATIONS
Room, food and beverage $ 8,912 8,866
Other 295 383
TOTAL REVENUES $ 9,207 9,249
EXPENSES
Departmental $ 2,430 2,482
Percentage rent 3,319 3,256
Advertising 585 597
Other 2,471 2,442
TOTAL EXPENSES $ 8,805 8,777
NET INCOME $ 402 473
ITEM 2. 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 condensed consolidated financial statements and notes thereto and the InnSuites Hotels, Inc. (the "Lessee") unaudited condensed statements of operations appearing elsewhere in this quarterly 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 of the Hotels. The Lessee is owned 9.8% by InnSuites Innternational Hotels, Inc., an entity owned by 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 April 30, 2000, the Trust owned a 45.1% interest in the Hotels through its sole general partner's interest in the Partnership. This change in ownership resulted primarily from the following transactions occurring 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 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 loaned 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 six-monththree month period ended July 31, 1999,April 30, 2000, base rent and percentage rent in the aggregate amount of $5.4$3.3 million was earned by the Trust. The 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 operating 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. In comparing the first quarters of fiscal 2001 and 2000, ADR improveddecreased $2.13 or 2.76% to $74.99 in the first quarter of fiscal 2001 from $77.12 in the first quarter of fiscal 2000, primarily due to a conscious effort to drive additional occupancy by managing down the acquisitionsADR. Occupancy increased by 5.63% to 75.0% in first quarter of fiscal 2001 from 71.0% in the prior year andfirst quarter of fiscal 2000 primarily the successful repositioningresult of those hotels
as studio and two room suite hotels that contribute more revenue per available
room. Whilethe rate management activity. Increased occupancy declined slightly in 1999 (1.5%) due increased supply
which exceeded demand growth, the improved ADR ($2.89)rates resulted in aan increase in REVPAR growth of $.99 (2.2%).$1.52 or 2.78% to $56.27 in the first quarter of fiscal 2001 from $54.75 in the first quarter of fiscal 2000.
The following table shows certain historical financial and other information for the periods indicated.

For the Six Month Period Ended
July 31,
-------------------------------
1999 1998
----------- ---------

Occupancy 64.4% 65.9%
Average Daily Rate (ADR) $ 70.74 $ 67.85
Revenue per available room (REVPAR) $ 45.59 $ 44.60
FOR THE THREE MONTHS ENDED
APRIL 30,
2000
1999
Occupancy 75.00 % 71.00 %
Average Daily Rate (ADR) $ 74.99 $ 77.12
Revenue Per Available Room (REVPAR) $ 56.27 $ 54.75 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. 12

RESULTS OF OPERATIONS

ACTUAL RESULTS OF OPERATIONS FOR THE CONSOLIDATED COMPANY

Comparison
Results of Operations of the sixTrust for the three months ended July 31,April 30, 2000 compared to the three months ended April 30, 1999 with 1998 (InnSuites
Hospitality Trust)
For the sixthree months ended July 31, 1999,April 30, 2000, the Trust had revenues of $5.4approximately $3.3 million compared to $4.8 milliona similar amount for the sixthree months ended July 31, 1998, an
increase of $.6 million.April 30, 1999. Total expenses of $4.5 millionincreased approximately $43,000 or 1.9% from approximately $2,292,000 for the sixthree months ended July 31, 1999 resulted in a $500,000 increase over expenses of $4.0 millionApril 30, 1999.
Real estate depreciation for the sixthree months ended July 31, 1998.

General and administrative expenses include overhead charges for
management, accounting, shareholder and legal services forApril 30, 2000 compared to the Trust. In
comparing general and administrative expenses for the sixthree months ended July 31,April 30, 1999 and 1998, general and administrative expenses increased $94,000approximately $48,000 or 7.7% to approximately $666,000 from $814,000approximately $618,000, respectively. The increase was primarily due to a final settlementan increase in capitalized refurbishment costs in the first quarter of accounting and legal charges
associated with the Trust's closing of the Cleveland, Ohio office.

Interest expense increased by $344,000 in comparing the six months
ended July 31, 1999 and 1998 due to a combination of renegotiating lower
interest rates and the addition of $3.1 million in fixed mortgages and/or lines
of credit. The proceeds of those borrowings were used for capital improvements,
dividends and additional operational needs.fiscal 2001.
Real estate and personal property taxes, insurance and ground rent increased $90,000decreased approximately $33,000 or 8.7% to approximately $343,000 from approximately $376,000 in comparing the sixthree months ended July 31,April 30, 2000 and 1999, and 1998.respectively. The majority of the increase relates to the acquisition of the Buena Park and San
Diego hotels. Additionally, the Trust incurred charges for directors and
officers insurance in 1999.

In comparing depreciation for the six months ended July 31, 1999 and
1998, depreciation increased $167,000decrease was primarily due to the Trust's acquisitions
of the Buena Parksuccessful and San Diego hotels. The remainder of the increase resulted
from an increase in capitalized refurbishment costs.

When comparing other expenses for the six months ended July 31, 1999ongoing efforts to reduce real and 1998, the Trust experienced a decrease of $304,000 in advisory fees due to
the sale of Mid-America ReaFund Advisors, Inc. ("MARA") to the Partnership in
1999. MARA was formerly the Trust's advisory company.

The Trust had net income before minority interest of $905,000 in the
six months ended July 31, 1999, which represented a $201,000 increase from the
$704,000 earned in the six months ended July 31, 1998. After deducting minority
interest of $563,000, the Trust had net income attributable to shares of
beneficial interest of $342,000personal property tax assessments made by local and income per share of $.15 for the six months
ended July 31, 1999. This amount represented a $267,000 increase in the net
income earned for the quarter ended July 31, 1999 compared to the net income
earned for the quarter ended July 31, 1998.

As discussed previously in the notes to the financial statements, an
accounting change proposed by the Emerging Issues Task Force required that
contingent rent only be recognized when specified targets that trigger the
increases are met. After the second quarter of 1998, the Percentage Lease
agreements were modified to reflect this accounting change. The recalculation of
revenues for the six-month period ended July 31, 1998 set forth below depicts
what revenues would have been if they had been calculated using the terms of the
modified Percentage Lease agreements. As demonstrated below, the Trust is
performing better than last year for the same time period with regards to net
income and earnings per share. Additionally, it is particularly important to
note that the Trust's interest in the Partnership has increased to 42% as of
July 31, 1999 compared to an interest of 15% as of July 31, 1998. The Trust's
weighted average ownership in the Partnership during the six-month period ended
July 31, 1999 was 36% compared with 14% for the six-month period ended July 31,
1998.
13

(amounts in thousands except for per share data)
July 31, July 31, July 31,
1999 1998 1998
Recalculated As Reported in 10Q

Revenues ........................................ $5,388 $4,323 $4,751

Net income before minority interest ............. 905 299 704

Minority interest ............................... 563 246 629
------ ------ ------
Net income attributable to shares of
beneficial interest .................... $ 342 $ 53 $ 75

Earnings per share - basic ...................... $ .15 $ .03 $ .04

Weighted average number of shares
outstanding-basic ...................... 2,311 1,668 1,668

The Scottsdale hotel is highly seasonal with best results in the first
quarter. The reduction of the Scottsdale ownership from 100% to 42% reduced the
Trust's earnings in the first quarter but will result in less seasonality in the
second, third and fourth quarters. Buena Park and San Diego are more seasonal
operations that traditionally contribute greater amounts of income in the second
quarter of the Trust's fiscal year compared to the first quarter. The changes in
percentage rent allocation and the repositioning of the Buena Park and San Diego
hotels should provide less seasonality than the Trust has experienced
historically.

Comparison of the quarter ended July 31, 1999 with 1998 (InnSuites Hospitality
Trust)

For the quarter ended July 31, 1999, the Trust had revenues of $2.1
million compared to $2.0 million for the quarter ended July 31, 1998, an
increase of approximately $100,000. Total expenses also increased approximately
$100,000 to $2.2 million for the quarter ended July 31, 1999 from $2.1 million
for the quarter ended July 31, 1998.state governments.
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 quarters ended July 31,April 30, 2000 and 1999, and 1998, general and administrative expenses increased $7,000decreased approximately $48,000 or 9.4% to approximately $469,000 from $383,000approximately $517,000, respectively. The decrease of approximately $48,000 was primarily due to a combination of the final settlement of accounting and legal charges of approximately $300,000 associated with the Trust's closing of the Cleveland Ohio office.

Interestoffice in the first quarter ended April 30, 1999 and the provision of approximately $255,000 for uncollectible rent in the first quarter ended April 30, 2000.
Total interest expense increased by $192,000 comparing the quarters ended
July 31, 1999 and 1998, dueapproximately $61,000 or 7.8% to the addition of $3.1 million in fixed mortgages
and/or lines of credit. The proceeds of those borrowings were used for capital
improvements, dividends and additional operational needs.

Real estate and personal property taxes, insurance and ground rent
decreased $56,000approximately $841,000 from approximately $780,000 in comparing the quartersthree months ended July 31,April 30, 2000 and 1999, respectively. Interest on mortgage notes payable increased approximately $41,000 or 8.3% to approximately $545,000 from approximately $504,000 in comparing the three months ended April 30, 2000 and 1998. A
majority of the decrease is attributable to a reduction in property tax expense
associated with the Flagstaff property.

In comparing depreciation for the quarter ended July 31, 1999, and 1998,
depreciation increased $68,000respectively. The increase was primarily due to net additional borrowings of approximately $2.3 million during fiscal 2000 for a loan modification relating to the acquisitionsNorthern Phoenix property and the refinancing of the San Diego and Buena Park hotels, which occurredproperty. Interest on notes payable to related parties increased approximately $25,000 or 97.7% to approximately $50,000 from approximately $25,000 due to additional loans from Wirth during the first and second quartershalf of 1998, respectively. The remainderfiscal 2000. These were partially offset by a slight decrease in the variable rate paid on the $12 million credit facility.
Amortization of the increase is attributable to an
increase in capitalized refurbishment costs.
14

When comparing other expensesloan fees was approximately $16,000 for the quartersthree months ended July 31, 1999 and
1998, the Trust experienced a decrease of $160,000 in advisory fees due to the
sale of MARA to the Partnership in fiscal year 1999.

Considering all of the changes and acquisitions mentioned above, the
Trust had a net loss before minority interest of $88,000 in the quarter ended
July 31, 1999, a $14,000 increased loss from the $74,000 loss reported in the
quarter ended July 31, 1998. After deducting minority interest of $51,000, the
Trust had a net loss applicable to shares of beneficial interest of $37,000 and
a loss per share of $.02 for the quarter ended July 31, 1999 compared with a
loss of $98,000 and a loss per share of $.05 for the quarter ended July 31,
1998. The reduction in net loss is attributable to the reduction in the
ownership of the Scottsdale hotel from 100% to 42% in the first quarter of 1999.

April 30, 2000.
Funds from Operations (FFO)
The Trust notes that industry analysts and investors use Funds From Operations ("FFO")(FFO) as another tool to evaluate and compare equity REITs. The Trust also believes it is meaningful as an indicator of net income excluding most non-cash items and provides information about the Trust's cash available for distributions, debt service and capital expenditures. The Trust follows the March 1995 interpretation of the National Association of Real Estate Investment Trusts ("NAREIT") definition of FFO which is calculated (in the Trust's case) as net income plus depreciation and amortization, and loss on disposals and extraordinary items, if applicable. Other non-cash expenses such as stock
option expense have not been added back in Funds from Operations. FFO does not represent cash flow from operating activities in accordance with generally accepted accounting principles ("GAAP") and is not indicative of cash available to fund all of the Trust's cash needs. FFO should not be considered as an alternative to net income or any other GAAP measure as an indicator of performance and should not be considered as an alternative to cash flows as a measure of liquidity. In addition, the Trust's FFO may not be comparable to other companies' FFO due to differing methods of calculating FFO and varying interpretations of the NAREIT definition.

FUNDS FROM OPERATIONS (FFO)
For the Six-Month Period
Ended July 31
(unaudited)
-------------------------------------
(amounts in thousands)
1999 1998 1998
Recalculated Reported
------- ------------ ---------

Net Income attributable to common stockholders $342 $ 53 $ 75

Depreciation and Amortization (Trust's portion) 500 118 118
---- ---- ----
Funds from Operations (FFO) $842 $171 $193
==== ==== ====
FUNDS FROM OPERATIONS
FOR THE THREE MONTHS
ENDED APRIL 30,
(amounts in thousands)
2000 1999
Net income attributable to common stockholders $ 392 379
Depreciation 666 618
Minority interest share of depreciation (366 ) (398 )
Funds from Operations (FFO) $ 692 599
FFO reported increased to approximately $692,000 from $193,000approximately $599,000 when comparing the first quarters of fiscal 2001 and 2000 ended April 30, 2000 and 1999, respectively. The increase of approximately $93,000 or 15.5% was primarily due to the increased ownership interest that the Trust has in the period ended July 31, 1998
(recalculated at $171,000) to $842,000Partnership.
Results of Operations of InnSuites Hotels Inc., the Lessee, for the periodthree months ended July 31, 1999. As
noted above, FFO is a common tool used to measure the ability of a REIT to
provide funds for various operating, investing, and capital improvement
activities. The increase in FFO attributableApril 30, 2000 compared to the sixthree months ended July 31,April 30, 1999 over
For the sixthree months ended July 31, 1998 shows the positive contribution the
repositioned Hotels have made to the operating performance of the Trust.

Comparison of the period ended JuneApril 30, 1999 with 1998 (InnSuites Hotels,
Inc.-Lessee)

For the six months ended June 30, 1999,2000, the Lessee had total revenues of $15.8approximately $9.2 million compared to $14.6approximately the same amount for the three months ended April 30, 1999. Although ADR decreased by $2.13 or 2.76% to $74.99 from $77.12 when comparing the three months ended April 30, 2000 and 1999, respectively, occupancy increased 5.63% to 75.0% from 71.0%. Total expenses increased approximately $28,000 or less than 1%, remaining at approximately $8.8 million.
Departmental expenses, which include operating expenses for the rooms, food and beverage, telecommunications, and miscellaneous departments, decreased approximately $52,000 or 2.1% to approximately $2.4 million from approximately $2.5 million for the sixthree months ended JuneApril 30, 1998.2000 and 1999, respectively. This 8.2%decrease was primarily due to management's efforts to increase operational efficiency to reduce costs per occupied room.
Percentage lease expense increased by approximately $63,000 or 2.0% remaining at approximately $3.3 million for the three month periods ended April 30, 2000 and 1999. The increase was primarily due to improvements in ADR from $67.85 to $70.74 and a
$400,000an increase in foodroom revenues, which the percentage lease expenses are primarily based on, for the three months ended April 30, 2000.
Advertising expense for the three months ended April 30, 2000 was approximately $585,000.
Other expenses, including general and beverage sales. Totaladministrative, maintenance, hospitality, utility, and insurance expenses, decreased from
$16.8was approximately $2.5 million for the three months ended April 30, 2000 compared to $16.4 million.

Room revenues atapproximately $2.4 million for the Hotelsthree months ended April 30, 1999. The increase of approximately $29,000 or 1.2% was primarily due to increased $878,000, or 6.5%,utility and hospitality expenses resulting from the six-
months ended June 30, 1998 to the six-months ended June 30, 1999. This increased
revenue reflects the continued growth of the repositioned hotels at Tucson St.
Mary, Arizona and Buena Park and San Diego, California and the influence of
tourism5.63% increase in the southern Arizona hotels during the winter months. Continuing
efforts to enhance the properties through refurbishment programs continues to
show a positive effect on guests and referrals.

Operating, advertising, and other expenses decreased by $337,000, or
3.2%, between the periods because of the repairs and repositioning costs
incurred in 1998. These costs decreased as a percentage of revenues from 73% in
1998 to 65% in 1999. Rent expense also decreased by 1.3% due to the previously
discussed changes in the Percentage Leases.

occupancy.
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, will beis its share of the Partnerships'Partnership's cash flow. The Partnership's principal source of revenue will beis 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 PercentagesPercentage 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. DuringFor the second quarter,three months ended April 30, 2000 and 1999, the Trust recorded a provision of approximately $255,000 and $0 for uncollectible receivables, respectively. These charges reflect the Trust's assessment of the collectibility of its receivables, which primarily consists of rent receivable from the Lessee, based on an evaluation of the Lessee's estimated future cash payments exceeded $1.7
million dollars on rent receivables.

Beyondflows. The Trust's management may restructure and acquire the Lessee in January 2001 following the guidelines of the REIT Modernization Act.
As of April 30, 2000, the Trust has no commitments for capital expenditures beyond a 4% reserve for refurbishment and replacements set aside annually, approximately $140,000 will be spent in the next quarter for the Nova
Front Desk systems in response to potential computer systems problems associated
with the Year 2000; an ongoing expenditure totaling $450,000 for refurbishing
costs at the San Diego hotel will also be incurred in future quarters.as 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 Internal Revenue 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 Credit Facilityline 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, The1998, the Trust maintainsobtained a $12 million Credit Facility with(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 bearscharges interest at a variable interest rate. By its terms, the Credit Facility will expire in approximately two years,one year on April 16, 2001, subject to renewal. The terms of the Credit Facility require the PartnershipTrust 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 1.51.75 to 1.0 and(renegotiated), 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. The Trust is in negotiations with its lenders to adjust its
covenant requirements.
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 not an agreement or understanding to
invest in any other properties, andHowever, 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 Capital
Expenditures 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 the six-month periodfiscal quarter ended July 31, 1999,April 30, 2000, the Hotels spent approximately $1.2 million$311,494 for capital expenditures. The Trust considers the majority of these improvements to be revenue producing and thereforerevenue-producing. Therefore, these amounts have been capitalized and are being depreciated over their estimated useful lives. The HotelsLessee also spent $832,000$444,215 during the six month periodfirst fiscal quarter ended July 31, 1999April 30, 2000 on repairs and maintenance to the Hotels and these amounts have been charged to expense as incurred.

Outstanding mortgage debt increased from $23.2 million at January 31,
1999 to $24.0 million at July 31, 1999 due to the mortgage debt increase and
refinancing of the Northern Phoenix property.

INFLATION
The Trust's revenues initially will be 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 initially 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 28.8%24.4% of revenues in six-month periodfor the fiscal quarter ended July 31, 1999.April 30, 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.
SEASONALITY
The Hotels' operations historically have been seasonal. The six southern Arizona hotels experience their highest occupancy rates 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. The Flagstaff, Arizona and San Diego and Buena Park, California
hotels experience their highest occupancy rates in the second and third fiscal
quarters. This seasonality pattern can be expected to cause fluctuations in the Trust's quarterly lease revenuesrevenue 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. The extent
of the fluctuation of earnings related to seasonality of the Hotels is
anticipated toNo assurance can be leveled by the factgiven that the Trust's ownership ofTrust will make distributions in the Scottsdale hotel (which shows one of the highest seasonal fluctuations) has been
reduced to 42% from 100%. At the same time, the Trust's ownership of the other
Hotels, including the California properties (which are less seasonal and have a
different high season) was increased from an average of 14.4% to 42% as of July
31, 1999.

future.
YEAR 2000 COMPLIANCE

The Year 2000 problem is the result of computer programs having been
written using two digits instead of four digits to define the applicable year.
Any of the Company's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the Year 2000. This
could potentially result in a system failure or miscalculations, causing
disruptions of operations and normal business activity.
The Trust and the Lessee have upgraded their computer accounting programs and the Lessee is completing the installation of newupgraded its computerized property management systemssystem along with necessary hardware. TheseThe new systems have been warranted to be Year 2000 compliant. The Trust has estimated the total cost that
will be incurred in connection with these installations to be approximately
$400,000, which will be capitalized and amortized over seven years. To date, the
Trust has spent $260,000 toward the completionAs of these installations and
anticipates completing the project by October 1999. The Trust believes that such
costs will not result in a material adverse effect on its financial conditionJune 14, 2000, no computer or results of operations.

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
operations.

Although the Trust is not aware of any threatened claims relatedsoftware problems relating 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 relatedbeen discovered. However, problems relating to the Year 2000.
18

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

could still arise.
FORWARD-LOOKING STATEMENTS
Certain statements in this Form 10-Q 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 its 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, developments, 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'shotel's financial condition or results of operations. The words and phrases "looking ahead", "we are confident", "should be", "will be", "predicted", "believe", expect""expect", " anticipate""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 thathotels 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 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 or will operate. 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 Securities Exchange Act of 1934, the qualifications set forth hereinabove are inapplicable to any forward-looking statements in this Form 10-Q relating to the operations of the Partnership.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.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 to related
parties. The proceedspayable. Proceeds from these loans wereare 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. There have been no significant changes in the Trust's debt structure during the three and
six-month periodsquarter ended July 31, 1999.

19April 30, 2000.
PART II
OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

On July 12, 1999, the Trust held its Annual Meeting of Shareholders to
consider the election of Trustees and the adoption and approval of an amendment
to the Second Amended and Restated Declaration of Trust. Prior to such meeting,
the Trust provided notice of the Annual Meeting and solicited proxies through
the Trust's definitive Proxy Statement, dated June 1, 1999, wherein the
considered transactions were described to the shareholders.

Shareholders representing 1,968,266 of the voting shares of the Trust were
present at the Annual Meeting, in person or by proxy, representing a quorum for
such Annual Meeting. The considered transactions were properly placed before the
shareholders for adoption and approval. Following the votes of the shareholders,
such votes were certified by the Inspector of Election of the Annual Meeting as
follows:

ABSTENTION AND
FOR AGAINST BROKER NON-VOTES
------ ----------- ----------------
ELECTION OF TRUSTEES:

Edward G. Hill ....................................... 1,926,972 0 41,294
Steven S. Robson ..................................... 1,926,372 0 41,894
Adoption and approval of amendment to
Second Amended and Restated
Declaration of Trust ............................. 1,924,965 34,128 9,172

The amendment to the Second Amended and Restated Declaration of Trust
was adopted and approved and all of the nominees for Trustee were elected by the
requisite majorities.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a)
EXHIBIT
NUMBER EXHIBIT
------ -------

3.1 Second Amended and Restated Declaration of Trust, as
further amended on July 12, 1999.

10.1 Promissory Note dated June 14, 1999 by InnSuites
Hospitality Trust in favor of James F. Wirth.

10.2 Promissory Note dated July 27, 1999 by InnSuites
Hospitality Trust in favor of James F. Wirth.

27.1 Financial Data Schedule. (1)

EXHIBIT
NUMBER EXHIBIT
27.1 Financial Data Schedule.(1)
(1) Filed only in electronic format pursuant to Item 601(c) of Regulation S-K.
(b) REPORTS ON FORM 8-K.
No Current Reports on Form 8-K were filed on behalf ofby the Trust during the fiscal quarter ended July 31, 1999.

April 30, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: September 14, 1999 INNSUITES HOSPITALITY TRUST (Registrant)

By: /s/ Marc E. Berg
-----------------------------------------
Marc E. Berg, Executive Vice President,
Treasurer and Secretary

Dated: June 14, 2000	INNSUITES HOSPITALITY TRUST (Registrant)

	By: /s/ Marc E. Berg



		Marc E. Berg, Executive Vice President, Treasurer and Secretary

	And By: /s/ Anthony B. Waters

			Anthony B. Waters, Chief Financial Officer

OHIO	34-6647590
(State or other jurisdiction	(I.R.S. Employer Identification Number)
of incorporation or organization)


	APRIL 30, 2000			JANUARY 31, 2000
ASSETS		(UNAUDITED)			(AUDITED)
Hotel properties, net	$	64,125,135		$	64,479,187
Cash and cash equivalents		225,846			208,109
Rent receivable from affiliate,
net of $3,100,890 and $2,845,732 allowance respectively		—			—
Interest receivable and other assets		595,715			618,063

TOTAL ASSETS	$	64,946,696		$	65,305,519

LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES
Mortgage notes payable	$	24,071,090		$	24,251,662
Notes payable to banks		11,300,000			11,300,000
Other notes payable		—			225,000
Advances payable to related parties		2,625,000			2,970,000
Accounts payable and accrued expenses		780,364			1,138,168

TOTAL LIABILITIES	$	38,776,455			39,884,830
MINORITY INTEREST IN PARTNERSHIP		17,293,861			16,789,423
SHAREHOLDERS' EQUITY
Shares of beneficial interest, without par value; unlimited
authorization; 2,441,449 and 2,507,949 shares issued and
outstanding at April 30 and January 31, 2000, respectively		9,488,256			9,093,020
Treasury stock		(611,875	)		(461,754	)


TOTAL SHAREHOLDERS' EQUITY	$	8,876,381			8,631,266


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	64,946,696		$	65,305,519


		FOR THE THREE MONTH PERIOD ENDED APRIL 30,
		2000	1999
			(Restated)
REVENUES
Rent revenue from affiliate	$	3,319,046	3,255,511
Interest income		2,263	19,876
Other income		—	9,591

TOTAL REVENUES	$	3,321,309	3,284,978

EXPENSES
Real estate depreciation	$	665,706	618,363
Real estate and personal property taxes
insurance and ground rent,		342,852	375,727
General and administrative		468,886	517,376
Interest on mortgage notes payable		545,100	503,550
Interest on notes payable to banks		245,897	251,206
Interest on note payable to related party		49,830	25,211
Amortization of loan fees		16,265	257

TOTAL EXPENSES	$	2,334,537	2,291,690

INCOME BEFORE MINORITY INTEREST	$	986,773	993,288
LESS: MINORITY INTEREST	$	594,284	613,981

NET INCOME ATTRIBUTABLE TO SHARES OF BENEFICIAL INTEREST	$	392,489	379,307

EARNINGS PER SHARE — basic	$	.16	.16

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING — basic		2,474,377	2,321,133

EARNINGS PER SHARE — diluted	$	.10	.10

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING — diluted		9,733,222	10,090,213


	FOR THE THREE MONTHS ENDED APRIL 30,
	2000			1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	392,489		379,307
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock option compensation expense		13,129		—
Depreciation and amortization		681,971		618,620
Minority interest		594,284		613,981
(Increase) Decrease in interest receivable and other assets		6,084		(364,822	)
Increase in percentage rent receivable		(255,158	)	(331,474	)
Provision for uncollectible receivable from affiliate		255,158		—
Decrease in accounts payable and accrued expenses		(357,805	)	(409,938	)

NET CASH PROVIDED BY OPERATING ACTIVITIES	$	1,330,152		505,674

CASH FLOWS FROM INVESTING ACTIVITIES
Improvements and additions to hotel properties		(311,494	)	(615,940	)


NET CASH (USED IN) INVESTING ACTIVITIES	$	(311,494	)	(615,940	)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments on mortgage notes payable	$	(180,572	)	(699,341	)
Issuance (Repurchase) of shares		(150,120	)	177,573
Refinancing of mortgage notes payable		—		1,751,920
Payments on other notes payable		(225,000	)	(450,000	)
Repurchase of partnership units		(73,822	)	(269,183	)
Payment of dividends		(26,407	)	—
Advances from related parties		—		2,000,000
Payments on advances from related parties		(345,000	)	(1,982,782	)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	$	(1,000,921	)	528,187

NET INCREASE IN CASH AND CASH EQUIVALENTS	$	17,737		417,921
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	$	208,109		420,935

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	225,846		838,856

Fiscal
2001	$	5,137,500
2002		6,850,000
2003		6,850,000
2004		6,850,000
2005		6,850,000
Thereafter		20,550,000

	$	53,087,500


	THREE MONTHS ENDED APRIL 30,
	2000		1999
REVENUES FROM HOTEL OPERATIONS
Room, food and beverage	$	8,912	8,866
Other		295	383

TOTAL REVENUES	$	9,207	9,249
EXPENSES
Departmental	$	2,430	2,482
Percentage rent		3,319	3,256
Advertising		585	597
Other		2,471	2,442

TOTAL EXPENSES	$	8,805	8,777

NET INCOME	$	402	473

ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
	RESULTS OF OPERATIONS.

	FOR THE THREE MONTHS ENDED APRIL 30,
	2000			1999

Occupancy		75.00	%		71.00	%
Average Daily Rate (ADR)	$	74.99		$	77.12
Revenue Per Available Room (REVPAR)	$	56.27		$	54.75

	FUNDS FROM OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30,
	(amounts in thousands)
	2000			1999

Net income attributable to common stockholders	$	392		379
Depreciation		666		618
Minority interest share of depreciation		(366	)	(398	)

Funds from Operations (FFO)	$	692		599