Low awareness and insufficient appeal to foreign visitors, and delayed monetization of unit-style hotels

「また、施設近隣では、既存の商業施設や大規模展示場に加え、近年新設されたアリーナ施設の稼働も活発化しており、各種イベントの開催頻度や来場者数の増加を背景に、宿泊需要は拡大傾向にあります。」

「The 2 unit-style hotels captured a broad range of lodging demand as affordable and convenient accommodations, while business-hotel room rates remained high, and benefited from expanding inbound demand.」

「Although room rates showed some signs of softening, business hotel room rates in central Tokyo remained elevated. In addition to gaining support as affordable and convenient accommodation, the unit-style hotels benefited from growing inbound demand and increased demand. However, the pace of accommodation bookings slowed compared with the previous consolidated fiscal year, and both revenue and profit fell short of the initial plan.」

「As accommodation demand in central urban areas recovered and business hotel room rates remained high, the facilities gained support as affordable and convenient accommodation, driving demand.」

「Demand for the 2 unit-style hotels increased as accommodation demand in central urban areas recovered. Against the backdrop of persistently high business hotel room rates, the facilities gained support as affordable and convenient accommodation. In the vicinity of the facilities, existing commercial properties and large exhibition venues were joined by newly built arenas and other facilities that began operations, making favorable developments for the company’s business more apparent. Accommodation demand continued to expand as the frequency and attendance of various events increased.」

「Demand for the 2 unit-style hotels increased as accommodation demand in central urban areas recovered. Against the backdrop of persistently high business hotel room rates, the facilities gained support as affordable and convenient accommodation.」

「Demand for the 2 unit-style hotels improved substantially as accommodation demand in central urban areas recovered and business hotel room rates surged.」

「The company operates 2 unit-style hotels, mainly in central urban areas. Following the launch of the National Travel Assistance program, business hotel room rates in central urban areas surged from mid-October as accommodation demand recovered. As a result, demand for these more affordable facilities improved substantially.」

「Following the launch of the National Travel Assistance program, business hotel room rates in central urban areas surged from mid-October as accommodation demand recovered. As a result, demand for the more affordable facility improved substantially.」

「Although difficult conditions continued after the prolonged COVID-19 pandemic forced the company to close 4 facilities, Tokyo Ariake BAY HOTEL resumed operations in late April in response to the increase in the number of events and visitors at a large nearby exhibition venue.」

「The prolonged COVID-19 pandemic forced the company to close 4 facilities, and difficult conditions continue.」

「Our unit hotels, which are operated mainly in central Tokyo, have remained in a difficult situation as the prolonged COVID-19 pandemic has forced us to close 3 facilities since the end of last year,」

「The company determined that a full recovery in accommodation demand in central urban areas would take several years and decided to close the temporarily closed Tokyo Ginza BAY HOTEL. It is also considering future uses for Nihombashi Muromachi BAY HOTEL.」

「As business hotel room rates in central urban areas had fallen substantially and remained only marginally different from those of unit-style hotels, the company determined that it would take considerable time to establish a price advantage. It therefore decided to close 2 of the temporarily closed facilities, Tokyo Station BAY HOTEL and Tamachi BAY HOTEL.」

「For facilities that remain temporarily closed, the company plans to monitor accommodation demand in central urban areas and consider its options as appropriate. However, it expects that recovery in accommodation demand for unit-style hotels will take some time, and the timing of reopening remains undecided.」

「As accommodation demand in central urban areas plunged due to the spread of COVID-19 and the issuance of a state of emergency, the company progressively suspended operations at its unit-style hotels from mid-April and temporarily closed all 6 facilities from the end of April. At its business hotels, it also reduced the number of operating facilities in response to the closure of a large nearby theme park, working to reduce maintenance costs.」

「In addition, impairment losses were recognized for three consecutive fiscal periods due to the decline in accommodation demand resulting from the spread of COVID-19.」

「Since the second quarter, occupancy rates and room rates have weakened due to the decline in same-day bookings from customers after working overtime or dining out, as well as the decline in South Korean travelers resulting from worsening political conditions.」

「Although the facilities operated at high occupancy, particularly during the cherry blossom season and extended holiday periods, occupancy rates and room rates have weakened since the end of Golden Week. This reflects a decline in same-day bookings from customers after working overtime or dining out, as well as the temporary deterioration in market supply and demand caused in part by the decline in South Korean travelers.」

「The company is strengthening partnerships with overseas OTA websites and working to attract visitors to Japan, while also addressing diversifying payment needs by launching a prepayment service for guests booking accommodation through its own website. Many customers from Japan and overseas are using the facilities, particularly during the cherry blossom season and extended holiday periods.」

「However, compared with the initial business plan, the increase in the allocation of head-office expenses accompanying the substantial downsizing of the convenience-store business had an impact. Accordingly, for the second consecutive fiscal year, the company recognised impairment charges on part of the fixed assets at unit-hotel facilities that had been open for two full years.」

「As 2–3 years had passed since opening, the number of repeat customers had grown. In addition, to further raise awareness from the previous fiscal year, the company strengthened partnerships with overseas OTA sites and worked to attract foreign tourists visiting Japan. As a result, the proportion of foreign guests and occupancy rates continued to increase steadily.」

「As 2–3 years had passed since opening, awareness had increased and the number of repeat customers had grown. The company also worked to improve occupancy rates from Sunday through Tuesday by strengthening efforts to attract foreign tourists visiting Japan through overseas accommodation-booking sites, resulting in steady growth in occupancy rates.」

「In addition to an increase in repeat customers, the company strengthened efforts to attract foreign tourists visiting Japan by expanding its distribution channels through overseas booking sites. This increased the number of overseas guests, particularly during the cherry-blossom season. The company has also continued to plan accommodation packages in collaboration with various game content, resulting in continued growth in revenue and occupancy rates and steady improvement in earnings.」

「However, at several unit-hotel facilities that will reach two full years since opening this winter, the company has recognised indications of impairment because monetisation is lagging behind the plans made at opening. It is currently reviewing its profit-and-loss plans, and depending on the contents of the newly formulated plans, there is a risk that impairment charges will be required at the end of the current fiscal year for part of the relevant fixed assets, estimated at approximately ¥1.3 billion in total as of the end of the fiscal year ending February 2018.」

「As more than one year had passed since opening, awareness had increased and the number of repeat customers had grown. In addition, active advertising aimed at foreign travellers since the end of the previous fiscal year increased the number of guests, particularly from East Asia. The company also planned accommodation packages linked to events featuring other companies’ media content, some of which sold out on the day of launch. Along with higher revenue and occupancy rates, earnings continued to improve. Hotel business revenue for the first six months of the current consolidated fiscal year was ¥704 million, up 29.7% year on year, and segment profit was ¥0 million, compared with a segment loss of ¥63 million in the previous corresponding period.」

「In the previous corresponding period, all facilities had been open for less than one year and were struggling to build awareness. To improve occupancy rates on certain days of the week, which had been an issue, the company has actively expanded advertising aimed at foreign travellers through social media, video-sharing services and tourism websites for foreign travellers since the end of the previous fiscal year. As a result, both revenue and occupancy rates have continued to grow substantially year on year, with accommodation revenue of ¥380 million, up 41.0% year on year, and segment profit of ¥21 million in the first quarter of the current consolidated fiscal year, compared with a segment loss of ¥28 million in the previous corresponding period.」

「The increase in occupancy rates has remained slower than initially planned, partly because competing hotels have opened one after another in central Tokyo. As monetisation is taking time, the company recognises securing earnings at an early stage as its most important challenge.」

「However, the company has struggled to attract foreign tourists and raise awareness. In addition, the competitive environment has changed as business hotels and hostels have opened one after another in central Tokyo, and occupancy rates have remained sluggish on certain days of the week. As a result, monetisation has taken longer than initially expected, and the company has recorded a segment loss.」