January 11, 2006
Mail Stop 4561
Mr. Anthony B. Waters
Chief Financial Officer
InnSuites Hospitality Trust
InnSuites Hotels Centre
1615 E. Northern Avenue, Suite 102
Phoenix, Arizona 85020
Re: InnSuites Hospitality Trust
Form 10-K for the year ended January 31, 2005
Form 10-Q for the quarter ended April 30, 2005
Form 10-Q for the quarter ended July 31, 2005
Form 10-Q for the quarter ended October 31, 2005
File No. 1-07062
Dear Mr. Waters:
We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the year ended January 31, 2005
Management`s Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources, page 13
1. Please revise your discussion of cash flows provided by
operating
activities to discuss the underlying drivers impacting the changes
in
working capital. Refer to SEC Release 33-8350.
Contractual Obligations, page 16
2. Please revise your disclosure to include interest in your table
or
a discussion in the text. Refer to SEC Release 33-8350.
Consolidated Financial Statements
Note 19 - Properties Held for Sale and Sale of Hotel Properties
3. With respect to your hotel properties held for sale and sold
during the year, please tell us how you analyzed the conditions
outlined in paragraph 42 of SFAS 144 in evaluating whether the
properties qualified for reporting as discontinued operations. In
addition, please advise us and expand your accounting policy
disclosure to clarify how you determine whether the disposal of
hotel
properties should be accounted for as discontinued operations. If
the reason these properties were not accounted for as discontinued
operations was because of the registrant`s continuing involvement
with those properties as outlined in EITF 03-13, please clarify
that
to us and expand your accounting policy in future filings to
clarify
this. Please note that each property disposition typically
represents
a component of the business and as such is accounted for as
discontinued operations under SFAS 144.
Item 9A - Controls and Procedures, page 48
4. We note the statement that your principal executive officer and
principal financial officer concluded, "except as described
below,"
that the Trust`s disclosure controls and procedures are effective.
Given the exceptions noted, it remains unclear whether your
principal
executive officer and principal financial officer have concluded
that
your disclosure controls and procedures are effective. Please
revise
your disclosure to state, in clear and unqualified language, the
conclusions reached by your principal executive officer and your
principal financial officer on the effectiveness of your
disclosure
controls and procedures. For example, if true, you may state that
your disclosure controls and procedures are effective including
consideration of the identified matters, so long as you provide
appropriate disclosure explaining how the disclosure controls and
procedures were determined to be effective in light of the
identified
matters. Or, if true, you may state that given the identified
matters, your disclosure controls and procedures are not
effective.
You may not, however, state that your disclosure controls and
procedures are effective except to the extent they are not
effective.
Form 10-Q for the quarter ended July 31, 2005
Consolidated Financial Statements
Note 6 - Sale of Hotel Property, page 9
5. We note that the gain on the sale of your Phoenix, Arizona
hotel
was recorded as a capital contribution due to the relationship
between Wirth and the Trust. Please clarify for us your basis in
GAAP for accounting for the gain on this transaction as a capital
transaction. Clarify to us if the appraised value of the
property
was not considered to be a reliable estimate of the fair value of
the
property, and if so, explain why. If the accounting was based on
your conclusion that Phoenix Northern Resort LLC and the Trust are
under the common control of Mr. Wirth, clarify to us how the
criteria
of EITF 02-5 were met. In addition, describe to us the nature of
any
continuing involvement the registrant has with the sold hotel and
how
that continuing involvement was considered in the context of
whether
a sale should be recognized under SFAS 66.
* * * *
As appropriate, please amend your Form 10-K and respond to
these comments within 10 business days or tell us when you will
provide us with a response. Please furnish a cover letter with
your
amendment that keys your responses to our comments and provides
any
requested information. Detailed cover letters greatly facilitate
our
review. Please file your cover letter on EDGAR. Please
understand
that we may have additional comments after reviewing your
amendment
and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact Rachel Zablow, Staff Accountant at (202)
551-
3428 or the undersigned at (202) 551-3498 if you have questions.
Sincerely,
Linda van Doorn
Senior Assistant Chief Accountant
Mr. Anthony B. Waters
InnSuites Hospitality Trust
January 11, 2006
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