Launch of a hot-bath business and start-up of facility operations

「東京都港区西麻布で事業展開する「テルマー湯 西麻布店」におきましては、当第１四半期連結累計期間の入館者数は前年同四半期と比べ1.6％減少し、２万２千１百人となりました。西麻布店では有名アウフギーサーを多数ゲストに迎え、アウグースに特に注力して他店との差別化を図っております。」

「Thanks to the support of its customers, the Shinjuku location celebrated its tenth anniversary in August. Special events included wellness-related activities such as running and yoga, special aufguss performances featuring well-known aufguss masters, and commemorative restaurant menus. Part of the basement restaurant was renovated into a relaxation area and newly opened on 1 July as the "Relaxation & Coworking Lounge."」

「The Shinjuku location celebrated its tenth anniversary in August. Special events included wellness-related activities such as running and yoga, special aufguss performances featuring well-known aufguss masters, and commemorative restaurant menus. Part of the basement restaurant was renovated into a relaxation area and newly opened on 1 July as the "Relaxation & Coworking Lounge."」

「At テルマー湯 Nishiazabu, visitor numbers for the fiscal year increased 9.4% year on year to 89,700. The facility places particular emphasis on saunas and focused on aufguss performances featuring numerous well-known aufguss masters. It also made the previously paid ganbanyoku service available free of charge for 3 months, from December through February.」

「At テルマー湯 Shinjuku in Kabukicho, Shinjuku-ku, Tokyo, 9 years had passed since opening, and repair and equipment replacement costs had increased. In particular, the replacement of the POS system and payment machines to accommodate the new banknotes issued from July required a 2-day closure and contributed to declines in visitor numbers and revenue. Nevertheless, visitor numbers in the first six months increased 0.1% year on year to 158,000. The Company continued sauna-related events, including high-temperature sauna days, and held regional fairs, including the Spring Izu-Shizuoka Fair through May, the Summer Okinawa Fair from June and the Autumn Hiroshima Fair from September, offering limited restaurant menus and merchandise. At テルマー湯 Nishiazabu, visitor numbers in the first six months increased 5.0% year on year to 42,700. The facility places particular emphasis on saunas and focused on aufguss performances featuring numerous well-known aufguss masters.」

「Part of the Econach Nishiazabu Building, previously used as rental real estate in Nishiazabu, Minato-ku, Tokyo, was renovated into an urban sauna and spa facility and opened as テルマー湯 Nishiazabu on 12 April 2023. Annual visitor numbers were 82,000. In October, accommodation rates were changed to a variable pricing system to increase occupancy, and in November a large number of manga titles were added and the relaxation space, including Yogibo seating, was expanded.」

「Visitor numbers in the first nine months increased 1.2% year on year to 241,700. The Company continued to focus on sauna-related events, including high-temperature sauna days, and also promoted events to attract customers to the ganbanyoku area. In August, ahead of the Shinjuku location's eighth anniversary, part of the facility was renovated and two new tenants opened: the hair and nail salon "pizzicato" and Korean esthetic salon "Huamoa." A manga area was added in October, and the women's facial-water bath was renovated in December. Previously limited to women who applied for the women's ganbanyoku area, access was opened to all female customers. The Company also focused on media coverage, including television news programs and magazines, to raise awareness of テルマー湯 Nishiazabu. In October, accommodation rates were reduced to increase occupancy, and in November a large number of manga titles were added and the relaxation space, including Yogibo seating, was expanded.」

「Part of the Econach Nishiazabu Building, previously used as rental real estate in Nishiazabu, Minato-ku, Tokyo, was renovated into an urban sauna and spa facility and opened as テルマー湯 Nishiazabu on 12 April 2023. The facility has a luxurious, Egyptian-style urban design and places particular emphasis on saunas compared with the Shinjuku location. Visitor numbers in the first six months were 40,700. On 2 June 2023, the integrated accommodation facility Sauna & Cabin テルマー湯 Nishiazabu also opened.」

「Part of the Econach Nishiazabu Building, previously used as rental real estate in Nishiazabu, Minato-ku, Tokyo, was renovated into an urban sauna and spa facility and opened as テルマー湯 Nishiazabu on 12 April 2023. The luxurious, Egyptian-style urban sauna and spa facility is approximately one-third the size of テルマー湯 Shinjuku. Visitor numbers in the first quarter were 21,600. On 2 June 2023, the integrated accommodation facility Sauna & Cabin テルマー湯 Nishiazabu also opened.」

「Part of the Econach Nishiazabu Building, previously used as rental real estate in Nishiazabu, Minato-ku, Tokyo, was renovated into an urban sauna and spa facility. It newly opened as テルマー湯 Nishiazabu on 12 April 2023.」

「After considering synergies within the Group's hot-spring business, we determined that it would take a certain amount of time for those benefits to materialize and that improving short-term profitability would be difficult. Accordingly, we decided to transfer all shares of Happy Resort Co., Ltd.」

「In addition, the new Glamping ♨ Telmaru-yu Namegawa opened on 17 September 2022 in Namegawa, Hiki District, Saitama Prefecture. Based on a concept different from that of the Shinjuku location in central Tokyo, the facility is designed to attract families and other customer groups. It makes use of its large suburban site and seeks synergies by combining the hot-spring facility with the glamping facility, which opened on 26 October.」

「The resumption of normal 24-hour operations in January gradually restored visitor numbers, which increased 269.8% year on year to 73,700 in the first quarter. To attract customers, the Company launched the rooftop "Rooftop Sports Bar & Fitness" in April after renovating the facility's roof. This service allows ganbanyoku customers to use a facility equipped with more than 40 fitness machines and a 220-inch large LED screen. The Company also focused on sauna-related events, which have become increasingly popular in recent years.」

「The Group had been exploring expansion of its bathing business with a view to the post-COVID period. After securing funding, it began preparations to open a new bathing facility in Namegawa Town, Hiki District, Saitama Prefecture. It is also currently renovating part of the Econach Nishiazabu Building, owned in Nishiazabu, Minato-ku, Tokyo, to develop a new urban sauna and spa facility.」

「Under these circumstances, the Group's core bathing business at テルマー湯 in Kabukicho, Shinjuku-ku, Tokyo was forced to suspend operations temporarily and operate on reduced hours repeatedly from April through September in response to requests from the Tokyo Metropolitan Government, making normal 24-hour operations impossible. However, foot traffic recovered from October through December after the state of emergency was lifted. As a result, visitor numbers in the first nine months increased 48.3% year on year to 116,700.」

「Reduced-hours operations from 10:00 to 20:00 resumed on 1 June, but the repeated temporary closures and reduced-hours operations had an adverse impact, including preventing a return to normal 24-hour operations.」

「Following the third state of emergency declared due to the spread of COVID-19, the Company temporarily closed the facility for 43 days in total: 37 days from 25 April through 31 May 2021 and 6 days in June. From 1 June, reduced-hours operations resumed from 10:00 to 20:00.」

「In October, a new Nordic coral-light facial-water bath was installed in the women's bath. In anticipation of earlier last-train times as teleworking became more widespread, the Company also reduced late-night and early-morning rates.」

「Part of the bathhouse renovation work carried out during the temporary closure was completed in August, and new neutral electrolyzed-water baths were installed in both the men's and women's baths. In October, a new Nordic coral-light facial-water bath was installed in the women's bath. In addition, the design of the facility's loungewear was completely renewed after 5 years since opening.」

「From June through August after the temporary closure, monthly visitor numbers remained below 10,000 for 3 consecutive months, with no sign of recovery and conditions extremely difficult. Visitor numbers in the first six months fell sharply by 79.0% year on year to 34,800, compared with 165,900 in the same period of the previous year. In September, however, monthly visitor numbers exceeded 10,000 and began to recover gradually. Part of the bathhouse renovation work carried out during the temporary closure was completed in August, and new neutral electrolyzed-water baths were installed in both the men's and women's baths.」

「Following the spread of COVID-19, the Company temporarily closed the facility for a total of 56 days: on 4 April, 5 April and 8 April, around the issuance of the state of emergency, and from 8 April through 31 May. After the state of emergency was lifted, operations resumed on 1 June with measures to prevent infection, but instead of the previous 24-hour schedule, the facility operated on reduced hours from 10:00 to 22:00.」

「Annual visitor numbers declined 4.6% year on year to 320,000, the first annual decline since opening. Accordingly, in March the Company decided to discontinue 24-hour weekday operations and switch to reduced hours.」

「In the bathing business, visitor numbers at テルマー湯 in Kabukicho, Shinjuku-ku, Tokyo increased 3.3% year on year to 250,000 in the first nine months. In November, the ganbanyoku area was renovated, the range of bedrock stones was expanded, and the healing room was remodeled into a two-tier layout with additional beds. The Company also planned various events for the year-end and New Year period to attract customers. As a result, revenue increased 11.1% year on year to ¥1,138.120 billion, and operating profit increased 45.1% to ¥265.950 million.」

「In the bathing business, テルマー湯 in Kabukicho, Shinjuku-ku, Tokyo celebrated its fourth anniversary in August 2019. Visitor numbers in the first six months increased 4.8% year on year to 165,000. The Company introduced numerous new massage and esthetic menus, focused on in-facility events including yoga lessons and fortune-telling, and worked to attract more users. It also actively accommodated the rapidly increasing number of foreign tourists, partly due to the Rugby World Cup. As a result, revenue increased 13.5% year on year to ¥754.661 million, and operating profit increased 54.6% to ¥181.122 million.」

「In its fourth year since opening, annual visitor numbers increased 3.8% year on year to 335,000. In January 2019, the facility began 24-hour operations and introduced a 12-hour usage limit after admission, changing its operating format to improve customer convenience. Together with the effect of higher late-night and holiday rates from December 2018, this contributed to increased profit.」

「Visitor numbers in the first nine months increased 3.2% year on year to 242,000. The facility planned various events for the year-end and New Year period, when visitor numbers typically peak, and worked to attract customers by offering the popular year-end body scrub at a special price. As a result, revenue increased 2.8% year on year to ¥1,024.400 billion, and operating profit increased 75.1% to ¥183.291 million.」

「In the bathing business, テルマー湯 in Kabukicho, Shinjuku-ku, Tokyo celebrated its third anniversary in August 2018. Visitor numbers in the first six months increased 4.8% year on year to 158,000. The limited-time rainy-season "Car Discount" service for customers arriving by taxi or car at nearby parking facilities was extended due to its popularity, and a new student discount service was launched. The "Beauty Plan," which bundled admission, ganbanyoku and smoothies at a discount and had previously been offered only to women, was relaunched as the "Healthy Plan," making it available to men as well. The Company pursued customer acquisition through these and other initiatives.」

「In the bathing business, テルマー湯 in Kabukicho, Shinjuku-ku, Tokyo had been operating for 2 years and 10 months. Visitor numbers in the first quarter increased 7.2% year on year to 76,000. To address the usual decline in visitors from April to June, the Company introduced limited-time services to stem the decline, including a "Car Discount" service offering a discount on the next admission to customers arriving by taxi or car at nearby parking facilities. It also held various events, including a "Ladies' Late Night Day" extending the ganbanyoku operating hours for women, to attract customers. As a result, revenue increased 6.8% year on year to ¥324.002 million, and operating profit increased 124.9% to ¥55.983 million.」

「In its third year since opening, annual visitor numbers increased steadily by 16.3% year on year to 323,000. As the number of users increased, the Company substantially added reclining sofas and made other improvements to enable more customers to spend time comfortably.」

「In the bathing business, limited events held for seasonal occasions including Halloween and Christmas, as well as テルマー湯's distinctive year-end parties combining spa, esthetic services and meals, contributed to higher visitor numbers. Promotional effects from coverage by TV Asahi's "スーパーＪチャンネル," Nippon Television's "ヒルナンデス！" and TBS's "ランク王国," among others, were also significant. In particular, TV Tokyo's "たけしのニッポンのミカタ！" featured the facility's thorough cleanliness management, raising customer recognition of its differentiation in hygiene and the environment. The Company also added reclining seats throughout the facility and opened the industry's first "Snore King Room," which was well received as a measure addressing snoring concerns among tired or intoxicated customers. As a result, revenue increased 26.8% year on year to ¥996.812 million, and operating profit was ¥104.678 million, compared with an operating loss of ¥27.283 million in the same quarter of the previous year. Cumulative visitor numbers in the first nine months were 235,000, an increase of 39,000 year on year.」

「The "Hydrogen Water Mud Pack & Salt Sauna," introduced in the first quarter, was well received as a combination of a mineral-rich mud pack and salt expected to have detoxifying effects. The ganbanyoku renovation and campaigns featuring second-anniversary limited events, including a "Dead Sea Mud Pack" and "Cool Head & Refresh Lymph," also substantially contributed to the increase in visitor numbers. Against a backdrop of greater recognition through television news coverage and magazine features, the Company also actively pursued group customers, including by regularly securing large corporate social gatherings combining the benefits of fine dining and spa and esthetic services. As a result, revenue in this business increased 27.3% year on year to ¥640.274 million, and operating profit was ¥61.991 million, compared with an operating loss of ¥38.248 million in the same quarter of the previous year. Cumulative visitor numbers in the first six months were 151,000, an increase of 23,000 from the same period of the previous year.」

「In the bathing business, promotional effects from coverage on television news programs, including TV Asahi's "スーパーＪチャンネル" and TBS's "王様のブランチ," as well as extensive coverage in information magazines, gradually increased visitor numbers. The ryussei service offered in the ganbanyoku area was also well received. In addition, repeat visits increased steadily, while year-end parties and late-night use remained strong. As a result, revenue was ¥785.957 million, compared with ¥298.237 million in the same quarter of the previous year, but the heavy depreciation burden resulted in an operating loss of ¥27.283 million, compared with an operating loss of ¥400.921 million in the same quarter of the previous year. Cumulative visitor numbers from April through December 2016 were 195,881.」

「In the bathing business, テルマー湯 in Kabukicho, Shinjuku-ku, Tokyo celebrated its first anniversary in August 2016. Visitor numbers increased in August and September 2016, supported by promotional effects from events offering luxury prizes and coverage on television news and variety programs.」

「In the bathing business, テルマー湯, the bathing facility opened in August 2015, was gradually gaining recognition after being featured on television news and other media programs. To further increase visitor numbers, the Company worked to attract customers by renovating the ganbanyoku area and establishing the rooftop active venue "FUN・FUN SKY," equipped with numerous recreational facilities.」

「In August 2015, the Company launched a new bathing business at テルマー湯. By providing a luxurious, clean and comfortable space for relaxing in central Tokyo, approximately 137,000 customers used the facility from its opening in August 2015 through the end of March 2016.」