Dependence on tourism demand and weather

「The Group's business performance is subject to seasonal fluctuations. Since passenger transportation on mountain sightseeing routes in the transportation business, the hotel and ryokan business in the tourism business, and retail stores at expressway service areas derive a high proportion of their sales primarily from tourists, performance in the second quarter, the tourism season, tends to exceed that in other quarters,」

「The transportation business has a high proportion of use by tourists, and its performance is readily affected by weather and other factors.」

「If natural disasters attributable to climate change, including torrential rain, major typhoons, landslides, heavy snow, major earthquakes, and volcanic activity, as well as criminal acts such as terrorism, fires, power outages, or other events occur, supply chains may be disrupted, and business activities may be suspended or substantial recovery costs incurred due to damage to business sites and facilities. If the novel infectious disease becomes widespread, the number of travellers and other customers may decline substantially due to restrictions on activities imposed by the government or local authorities and restraints on consumer activity,」

「During the interim consolidated accounting period (1 April 2024 to 30 September 2024), Japan's economy saw the effects of the novel infectious disease disappear, with visitor flows, including inbound visitors, recovering, and service consumption continuing to trend higher than in the previous fiscal year.」

「The effects of the novel infectious disease were almost eliminated, and consumption related to services such as dining out, accommodation, and leisure showed a strong recovery.」

「During the cumulative third quarter of the fiscal year, Japan's economy showed a strong recovery in consumption related to services such as dining out, accommodation, and leisure as the effects of the novel infectious disease were almost eliminated.」

「During the cumulative second quarter of the fiscal year (1 April 2023 to 30 September 2023), Japan's economy showed a clear recovery trend in consumption related to services such as dining out, accommodation, and leisure as the effects of the novel infectious disease gradually eased.」

「During the cumulative first quarter of the fiscal year, Japan's economy saw a marked recovery in demand for service consumption, including dining out, accommodation, and leisure, as the effects of the novel infectious disease continued to ease.」

「The operating environment for the transportation business continues to show signs of recovery, with demand for domestic and international travel becoming more active as restrictions on movement and entry are eased.」

「The travel business has not reached a full recovery because it remains heavily affected by trends in the infectious disease. Sales remained at approximately 50% of fiscal 2019 results, before the spread of the disease, but a certain level of revenue was secured, mainly from education-related business such as school trips, and sales increased year on year partly due to the effects of nationwide travel support programs.」

「During the cumulative second quarter of the fiscal year (1 April 2022 to 30 September 2022), Japan's economy saw renewed spread of the novel infectious disease, but no stringent restrictions on activities were imposed by the authorities, and demand for service consumption, including dining out, accommodation, and leisure, recovered.」

「Although the temporary subsiding of the novel infectious disease led to a recovery in demand for service consumption, including dining out, accommodation, and leisure, downside risks to production and exports have increased due to shortages of components such as semiconductors and surging resource prices.」

「If natural disasters attributable to climate change, including earthquakes, torrential rain, typhoons, landslides, heavy snow, and volcanic activity, as well as criminal acts such as terrorism, fires, power outages, or other events occur, supply chains may be disrupted, business activities may be suspended due to damage to business sites and facilities, and substantial recovery costs may be incurred. If infectious diseases such as novel influenza or the novel coronavirus become widespread, a significant decline in travellers and other customers may lead to concerns about deterioration in the performance of the Group, particularly in the transportation and leisure and services businesses, and may affect the Group's business performance and financial position.」

「Although the novel infectious disease had temporarily subsided, the sixth wave began at the start of the fourth quarter. In addition, the situation is expected to remain unpredictable due to continued surges in import prices caused by the weaker yen and other factors.」

「Disaster recovery costs for railway facilities resulting from the torrential rain that occurred in mid-August 2021.」

「In the bus business, the renewed spread of the novel infectious disease continued to force reductions in services, particularly on the core highway bus routes, while passenger numbers on sightseeing routes also remained sluggish.」

「During the cumulative third quarter of the fiscal year, Japan's economy deteriorated rapidly as the spread of the novel coronavirus infection (hereinafter, the "novel infectious disease") significantly restricted social and economic activity, including voluntary restraints on going out and travelling and the disappearance of inbound demand. Although personal consumption gradually recovered as economic activity gradually resumed following the lifting of the state of emergency in June, partly due to the effects of demand-stimulation policies such as the "Go To Campaign," the business environment remains severe and unpredictable, with infections beginning to spread again from December onward.」

「Although tourism and accommodation demand has recently shown signs of recovery due to the Go To Travel Campaign, the hotel and ryokan business recorded a substantial decline in revenue as domestic travel restrictions and avoidance, calls for restraint on returning home and tourism, and entry restrictions on overseas travelers had an impact.」

「The economy deteriorated rapidly as the infectious disease spread, and inbound demand almost disappeared from March onward due to restrictions on foreign nationals entering Japan.」

「Inbound and domestic consumption both declined as people refrained from going out, various events were cancelled or postponed, and entry restrictions were imposed on foreign tourists due to the spread of the novel coronavirus infection.」

「Hotel accommodation and banquet cancellations occurred due to disruptions to rail and expressway transportation caused by Typhoon No. 19 and the resulting cancellation of scheduled events.」

「Typhoon No. 19, which occurred in October 2019, affected the company's consolidated subsidiaries 株式会社デリシア, アルピコ交通株式会社 and 東洋観光事業株式会社 as follows. At some 株式会社デリシア stores, products and facilities were damaged by flooding. At アルピコ交通株式会社, express bus services were suspended and charter-bus reservations were canceled due to the closure of sections of the Chuo Expressway and other factors. At 東洋観光事業株式会社, hotel accommodation cancellations occurred due to the suspension of transportation services and other factors.」

「In addition, if a major natural disaster such as an earthquake, torrential rain, typhoon, landslide or volcanic activity, a criminal act such as terrorism, or an event such as a fire or power outage occurs, supply chains may be disrupted, business activities may be suspended and substantial restoration costs may be incurred. Furthermore, if an infectious disease such as a novel influenza virus becomes widespread, a significant decline in travelers and others could adversely affect performance, particularly in the transportation and leisure and services businesses.」

「Although weather was generally favorable during July and August, the bus business was affected by a decline in tourist use due to weather conditions, including 3 typhoons making landfall during the September holiday period and in October.」

「Revenue increased in the express and chartered bus divisions, partly because of the increase in transportation capacity centred on アルピコ交通東京株式会社.」

「Passenger numbers on sightseeing routes to the Kamikochi and Norikura areas remained sluggish at 99.6% of the previous year's level due to unsettled weather, particularly on summer weekends, disasters including road closures, and typhoons in autumn.」

「In the bus business, passenger numbers on regular routes and express buses increased due in part to the Shinshu Destination Campaign. However, passenger numbers on sightseeing routes to the Kamikochi and Norikura areas remained sluggish due to unsettled weather, particularly on weekends in summer, disasters including road closures, and the effects of typhoons in autumn.」

「In the hotel and ryokan business, the number of guests declined year on year due to poor weather in summer and a decrease in large-scale tourism events.」

「In the hotel and ryokan business, the number of guests declined year on year due to poor weather in autumn, although」

「Sales in the sightseeing-route business, which primarily provides transportation to the Kamikochi and Norikura areas, declined due to a succession of typhoons making landfall in September and the effects of prolonged rainfall.」

「Revenue may fluctuate depending on weather conditions during the July–October tourism season, potentially affecting the performance of the group. Similarly, if transportation infrastructure is disrupted by snowfall in winter, this may also affect performance.」