16 MARCH 2009

JAPAN LEISURE HOTELS LIMITED

('Japan Leisure Hotels', 'JPLH' or 'the Company')

TRADING UPDATE AND NOTICE OF RESULTS

Japan Leisure Hotels (AIM: JPLH) is pleased to report that during 2008 the Company continued to execute its strategy of managing and expanding its leisure hotels business. This has been achieved by implementing a series of measures designed to control costs, whilst at the same time maintaining revenues. Importantly, and as previously anticipated, the leisure hotels industry has remained relatively protected from the effects of the economic downturn. A reluctance to travel abroad and to spend significant amounts on leisure activities, combined with the structural benefits of a high population density and lack of privacy in Japan, meant that JPLH's hotels continued to enjoy high levels of occupancy, in excess of 250%. 

Cash inflow has remained strong, under the supervision of the Company's asset manager, New Perspective. New Perspective's ability to implement robust cost control and improved financial management systems ensured that cash continued to be generated at a healthy rate. The cash position at 31 December 2008 was approximately JP¥260 million (£1.8 million at the prevailing exchange rate at that time). This is after taking into account the acquisition of a hotel in Yokkaichi in central Japan for JP¥410 million (£1.8 million at the prevailing exchange rate at that time), which completed on 27 August 2008 and was funded entirely from existing resources.

Current trading remains robust and the Company's portfolio of hotels continues to enjoy high rates of occupancy.  Economic conditions in Japan have continued to deteriorate and the impact on future trading is consequently less certain. However, these same conditions may also present unique opportunities to acquire additional leisure hotels from distressed sellers at attractive prices.  

Japan is a densely populated country, whose people tend to live predominantly in urban areas. Moreover, the high cost of living means that young adults stay with their families comparatively longer than in other countries. The resulting lack of privacy is one of the main reasons why the leisure hotel industry exists in Japan. The Directors believe that these cultural and demographic features provide a reasonable degree of mitigation against a period of economic downturn and are therefore cautiously optimistic with regard to prospects for the current year. As noted above, the economic situation is presenting acquisition opportunities and the Board remains confident of achieving the objectives set out at the time of the Company's Admission to AIM, albeit over a longer time frame than originally anticipated.

Full financial results for the year ended 31 December 2008 will be announced on 18 May 2009, together with an update on current trading.

Further information on Japan Leisure Hotels can be found at www.japanleisurehotels.com

Enquiries: