A New Style of Minimalist Hotel, Designed Especially for Tourists

A new style of minimalist hotel, designed especially for tourists

“karaksa”

Since ancient times, the karakusa motif has been treasured as a symbol

of growth, prosperity and intangible bonds.

The corporate logo of the Xymax Group combines the karakusa motif

with the traditional Japanese tomoe and magatama designs to express

growth and development, as well as partnership and nobility of spirit.

The new karaksa hotel was initiated from the desire to build a hotel

brand that would be beloved across generations, as fresh and supple as

the karakusa arabesque itself.

1 The karaksa hotel concept is completely original.

In the pursuit of comfort and convenience for our guests,

our hotels have been designed specifically for tourists.

Room Rates Insuﬃcient hotel capacity to meet tourism demand

Luxury

High-end City and Resort Passenger Hotels Ships

Middle Ryokan （Japanese Inns）

Economy B&Bs Business Hotels Guesthouses Budget Vacation Rentals

Business, Tourism, Banquets, Weddings Tourism Demand Business Demand Other (non-hotel) Full Service Hotels Limited Service Hotels (hotels speciﬁcally for lodging)

2 Simple and stylish: The karaksa motif adds elegant flair to the hotel ambiance. Japanese modern spaces for relaxation

3 Guest rooms over 20㎡.

A variety of room Connecting rooms Connecting doors are equipped between types to suit travelers’ needs the majority of our guest rooms. Ideal for families and group travelers who require more space to enjoy their stay together.

connecting

In the connecting rooms, guests can use bathrooms in two locations, making them convenient for larger groups.

Twin rooms as karaksa standard

4 Separated restrooms and showers. Our simple yet Bulky suitcases fit We offer a pleasant and fully equipped internet Internet neatly under the functional guest rooms are connection environment, with free Wi-Fi provided throughout the bed. (Kyoto, Osaka hotel and USB ports in the headboards of all guest rooms. perfect for group use Shinsaibashi, Kansai AIr Gate)

Smartphones for guests allow free calls to five countries overseas and domestically. FREE Wi-Fi (Sapporo)

Shower rooms A user-friendly design with shower rooms separated from sinks and toilets.

5 A breakfast buffet and our hotel facilities make your Restaurant Buffet-style breakfasts are provided in the bright, stay more comfortable open restaurant, which offers mainly western food. (Osaka Namba)

A pristine lobby greets guests upon arrival, with a design focused on unvarnished, natural wood.

The breakfast menu is labeled for those with allergies or religious dietary restrictions.

6 Creating new facilities at karaksa hotel Sapporo A space for Room Ⓡ is designed with the theme of is the next step in our relaxation “Japan Meets Hokkaido.” It is available around the clock, perfect as a meeting initiatives spot, or a place to relax after a bath.

There are a total of eleven Japanese-style rooms, recommended for families with small children and for foreign visitors who wish to experience Japanese culture. Rooms accommodate up to four people.

karaksa Hot Bath: Large and outdoor baths will soothe the fatigue of your journey.

The Room Ⓡ is fitted with Asahikawa furniture and kotatsu tables built into the floor. Vending machines stocked with Copyright ⓒ KARAKSA HOTELS Corporation All Rights Reserved Hokkaido-exclusive drinks are also available.

7 We provide a full range of services for overseas Front desk We have a diverse staff of foreign visitors to Japan nationals, who are able to help guests in multiple languages.

A prayer room for Muslim guests (Osaka Shinsaibashi) and Qibla locators that show the direction of Mecca (Osaka Shinsaibashi and Kyoto) are provided. All rooms are equipped with universal outlets that are compatible with appliances brought from overseas.

We have also introduced a system that Our hotels are conveniently located with easy access to Copyright ⓒ KARAKSA HOTELS Corporation All Rights Reserved allows video calls to professional interpreters. places popular with overseas travelers.

8 Launched in Osaka and Our rapid business expansion leverages the strengths of the Xymax Group. We offer optimal solutions for both conversions and new developments, Kyoto in March 2016. Our suited to individual landowners’ needs. hotel business is developing through various schemes

Number of New development Oﬃce conversion Commercial facility conversion guest rooms

★ ★ karaksa hotel Sapporo karaksa hotel Osaka Shinsaibashi I karaksa Spring hotel Kansai Air Gate (Opened in January 2018) (Opened in March 2016) (Opened in January 2017)

★ karaksa hotel premier Tokyo Ginza karaksa hotel Kyoto I Owned/ （Opening on May 1, 2019) (Opened in March 2016) 808 Operated Chiba (Opening TBD)

Hokkaido (Opening TBD)

Leased land/ karaksa hotel Osaka Namba Building owned/ 112 (Opened in November 2017) Operated

karaksa hotel grande Shin-Osaka Tower （Opening at the end of November 2019) Master lease/ 547 Operated karaksa hotel Tokyo Station （Opening on July 8, 2019)

Number of 1,223 105 139 1,467 guest rooms

★Strategic partnerships (joint business contracts / business alliances with third parties)

9 Plans for hotel expansion We have plans to develop ten new hotels across the country. throughout Japan

Hokkaido January 2018 177 rooms karaksa hotel Sapporo (In operation) Opening TBD 140 rooms

Osaka March 2016 69 rooms karaksa hotel Osaka Shinsaibashi I (In operation) January 2017 139 rooms karaksa Spring hotel Kansai Air Gate (In operation) November 2017 112 rooms karaksa hotel Osaka Namba (In operation) November 2019 396 rooms karaksa hotel grande Shin-Osaka Tower

Kyoto March 2016 36 rooms karaksa hotel Kyoto I (In operation)

karaksa hotels (Rooms) Number of guest rooms 1,600 1,467 1,400

1,200

1,000

800

600 Tokyo 533 May 2019 57 rooms karaksa hotel premier Tokyo Ginza 400 356 July 2019 151 rooms karaksa hotel Tokyo Station 200 Chiba 105 0 In operation Opening scheduled Opening TBD 190 rooms 2016 2017 2018 2019 onward (Year)

10 Examples of ofﬁ ce The karaksa hotels in Osaka and Kyoto were created by converting oﬃ ce buildings whose utility value had diminished. buildings converted into hotels ▶

▶

A bright restaurant that makes the most of warm wood tone.

Expressing modern Japanese style through monochromatic coloring. ▶

▶

Bright, clean entrance. A rock garden and traditional bamboo Remodeled elevators off er a calm Copyright ⓒ KARAKSA HOTELS Corporation fencing heighten a sense of expectation for visitors to Japan. and welcoming atmosphere. All Rights Reserved

11 A commercial building In a unique project for Japan, we converted a roadside retail electronic store into a hotel. Despite the large-scale construction involved, the karaksa Spring hotel Kansai Air Gate was completed in converted into a hotel approximately nine months.

▶

The 7m-tall single floor structure was converted into two floors, and the spacious premises allowed for a parking lot accommodating 15 buses and 60 cars. The building interior was remodeled to include 139 guest rooms, with connecting rooms perfect for group use.

Three elevators were installed, Ramps were also built next to ▶ including one for the disabled. the spacious restaurant area.

12 Newly constructed hotels Ideas debuted through three hotel conversion projects were brought together, giving shape to newly constructed karaksa hotels. give shape to ideas karaksa hotel Osaka Namba realized through conversions

Spacious lobbies make even Bright, open restaurants group check-ins smooth. flooded with sunshine from south-facing windows.

Out of 112 rooms, 80 may be Our popular connecting Five minutes on foot from Dotonbori and used by up to three guests. rooms accommodate up to six Shinsaibashi-suji shopping street. people. 64 rooms available.

karaksa hotel Sapporo

Another entrance that opens Fully-equipped with large and onto the Tanukikoji Shopping outdoor baths, and a space Arcade. for relaxation.

Eleven diverse room types, A breakfast buffet that offers Copyright ⓒ KARAKSA HOTELS Corporation A perfect base for sightseeing, located near including Japanese-style Japanese, Western and All Rights Reserved Susukino and Odori Park. rooms. Chinese food.

13 Business results for The target demographic for karaksa hotels is domestic and foreign tourists. This clear concept, combined with convenient locations, connecting rooms and other unique facilities, was very popular FY 2017 reflected with the target demographic, resulting in favorable business results for FY 2017. karaksa hotels’ Occupancy rates and length of stay Ratios by country for each hotel unique characteristics April 2017 to March 2018 April 2017 to March 2018 （％） Europe 1% 100 Sapporo（Opened in January） America 1％ Oceania 2% Occupancy rate（％） Asia 63％ 90 Japan Other 29％ Taiwan Southeast Asia 4% China South Korea Hong Kong 80 0 10 20 30 40 50 60 70 80 90 100（％）

America 7％ Oceania 6％ 70 Kyoto I Asia 41％ (nights) Other Japan Europe 25％ 60 3 19％ China Taiwan Southeast Asia 2％ Length of stay (nights) South Korea Hong Kong 0 10 20 30 40 50 60 70 80 90 100（％）

Europe 2% Osaka Nambe（Opened in November） America 2％ Oceania 3% 2 Asia 71％ Japan Other 15％ 7％ China South Korea Taiwan Hong Kong Southeast Asia 0 10 20 30 40 50 60 70 80 90 100（％）

1 Europe 4% Osaka Shinsaibashi I America 2％ Oceania 2%

Asia 68％ Japan Other 22％ Southeast Asia 2％ China South Korea Taiwan 0 0 Hong Kong 4 5 6 7 8 9 10 11 12 1 2 3 0 10 20 30 40 50 60 70 80 90 100（％）

Sapporo（Opened in January） Kyoto I Kansai Air Gate America 1％ Oceania 1% Osaka Namba（Opened in November） Osaka Shinsaibashi I Kansai Air Gate Asia 88％ Japan 10％ China 83％ South Korea 0 10 20 30 40 50 60 70 80 90 100（％） Average for all hotels Taiwan Southeast Asia ■ Occupancy rate: 86.6% Average for all hotels ■ Length of stay: 1.56 nights ■ Ratio of foreign guests: 84.0% The majority of guests were foreign visitors, Overall, Asia held the largest segment, Copyright ⓒ KARAKSA HOTELS Corporation and the average length of stay was long. but characteristics differed by hotel. All Rights Reserved

14 (Billions of people) 2.0 18％ 16％ International traveler numbers 1.80 The global tourism market 14％ (Billions of people)12％ An increase of continues to expand. The global market for international 2.01.5 850 million tourists18％ between16％ 2010 and 2030 travel is expanding, with tourists 1.32 1.80 Our focus is on the 14％ from East and Southeast Asia 12％ 1.20An increase of 1.0 driving market growth. 1.5 850 million tourists inbound market 0.95 between 2010 and 2030 0.81 1.32 1.20 1.00.5 0.95 0.81

0.50 2005 2010 2015 2017 2030 (Projected) Percentage of international travelers compared to the global population

0 Source: UNWTO (The United Nations World Tourism 2005 2010 2015 2017 2030 Organization) (Projected) Percentage of international travelers compared to the global population

Growth in the Japanese Number of foreign visitors to Japan inbound market (Millions of people) 70

The number of foreign visitors to 60.00

Japan reached a record high of Number of foreign visitors to Japan (Millions of people) 70 28.7 million in 2017. 50 Japan's inbound tourism market is 60.00

anticipated to continue growing in

the future. 50 30 28.69

19.74 21.29

28.69 30 8.61 10 6.73 19.74 21.29 2.92 0 2005 2010 2015 2017 2030 Copyright ⓒ KARAKSA HOTELS Corporation (Government goal) 10 8.61 All Rights Reserved Source: JNTO (Japan National Tourism Organization) / 6.73Total number East Asia Southeast Asia The Japan Tourism Agency 2.92 15 0 2005 2010 2015 2017 2030 (Government goal) Total number East Asia Southeast Asia A focus on visitors from East and Southeast Asian populations, and trends in per capita GDP East and Southeast Asia, East Asia is large in terms of overall volume, while the Southeast Asian countries have younger demographics and potential for growth. In the future, both populations and earnings will grow, and the number of international travelers is anticipated to increase explosively. who are driving the foreign (Billions of people) (USD per capita) South Korea 2.0 50,000 （51） travel market Southeast Asia East Asia China Population (left axis) （1,379） GDP (right axis) 39,738 Taiwan 1.5 37,500 Myanmar （23） 1.52 Hong Kong 1.39 1.43 （53） Laos （7） 1.18 Thailand（7） 1.0 25,000 （69） Vietnam Cambodia（93） The Philippines 0.73 （16）（103） 0.63 0.5 0.59 12,500 Brunei 0.44 13,778 Malaysia （0.4）（31） Singapore 0 0 ( ) indicates （6） 1990 2010 2016 2030(Projected) Indonesia December 2016 population Average （261） 21.6｜27.5 27.4｜37.9 29.2｜40.1 34.6｜46.5 age Unit: One million people Source: United Nations, IMF (International Monetary Fund), World Bank, etc. Source: IMF (International Monetary Fund) [Note] Average ages for 2016 are figures from 2015.

Current state of the international tourism markets in Asia

In countries where per capita GDP is less than 10,000 USD, the majority of citizens have never traveled overseas. There is rich latent potential for travel to Japan from these countries. Annual number of people departing Group travel Individual travel the country divided by population GDP (USD per capita) Over 100% Singapore

Approx. 55％ Taiwan 30,000

Approx. 44％ South Korea

Approx. 15％ Malaysia 10,000 Approx. 12％ Thailand

Approx. 10％ China

Approx. 4％ The Philippines 5,000

Approx. 3％ Indonesia

Vietnam 3,000

People who have yet to take their ﬁrst overseas trip Laos Copyright ⓒ KARAKSA HOTELS Corporation Myanmar All Rights Reserved Cambodia Source: United Nations, IMF (International Monetary Fund), World Bank, Japan Tourism Agency, etc. 16 One-stop shop for From hotel development to operations, the Xymax Group provides a complete range of services leveraging the functions, wealth of experience and expertise of each Group company. all hotel operations and services

Management/Operations

KARAKSA HOTELS

KARAKSA HOTELS KANSAI Ownership/Development KARAKSA HOTELS SAPPORO Tour Business/Bus Service XYMAX KARAKSA HOTELS TOKYO XYMAX TRAVEL DESIGN

Overseas Alliances

XYMAX GLOBAL PARTNER

KARAKSA MEDIA PARTNER

Security Facility Maintenance and Management MAX SECURITY XYMAX KANSAI SERVICES XYMAX ALPHA Cleaning

MAX CLEAN

17 karaksa hotel creates new Company Profile value for Japanese hotels with travelers as our main target

Company Name ■ (Japanese Name) 株式会社からくさホテルズ (English Name) KARAKSA HOTELS Corporation

Established ■ October 15, 2015

Capital ■ 10 million yen

Shareholders ■ XYMAX Corporation (100% investment)

Address ■ 1-1-1 Akasaka, Minato-ku, Tokyo, Japan 107-0052

Telephone ■ +81 3 5544 5813 (Main)

Facsimile ■ +81 3 5544 5814

URL ■ karaksahotels.com

Business Services ■ Hotel management / operations management

Board of Directors ■ Ryosuke Sato, President, Representative Director Fumihiro Sasaki, Director Kazuya Sugimoto, Director Hideki Fukae, Director Kenji Yoshimoto, Director