Decline in lodging demand due to natural disasters, disease, war and terrorism

「On the other hand, in addition to a tendency for tourists to avoid Kyoto as a destination or turn away from it due to overtourism, tourism demand was seen to decline in some areas due to multiple factors, including weather conditions such as the intense heat and localized torrential rains in recent years.」

「At Hotel Okura Kyoto, banquet revenue increased substantially in the previous year following the end of the COVID-19 pandemic, creating a temporary surge in demand. However, the number of events fell substantially because of the reaction to that surge, intensified competition from other hotels in the city, and cancellations caused by an approaching typhoon.」

「During the cumulative first quarter under review, there were no material changes in the occurrence of the key risks that management recognizes as potentially having a material impact on the filing company's financial position, operating results or cash flows, among the matters concerning the business and financial conditions described in the quarterly report, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「Because we accommodate guests from throughout Japan and around the world, we may be affected by disease and infectious diseases, natural disasters, war, terrorism and other events.」

「During the cumulative third quarter under review, there were no material changes in the occurrence of the key risks that management recognizes as potentially having a material impact on the filing company's financial position, operating results or cash flows, among the matters concerning the business and financial conditions described in the quarterly report, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative second quarter under review, there were no material changes in the occurrence of the key risks that management recognizes as potentially having a material impact on the filing company's financial position, operating results or cash flows, among the matters concerning the business and financial conditions described in the quarterly report, or in the business and other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative first quarter under review, although concerns arose that the economy would deteriorate due to the rapid depreciation of the yen and rising prices, the Japanese economy showed signs of recovery as restrictions on activities related to COVID-19 were lifted.」

「Because we accommodate guests from throughout Japan and around the world, we may be affected by disease and infectious diseases, natural disasters, war, terrorism and other events.」

「However, the outlook remains uncertain due to higher prices caused by soaring crude oil prices and further spread of the virus resulting from COVID-19 variants.」

「During the cumulative first quarter under review, the Company recorded an operating loss of ¥596 million and a quarterly net loss of ¥352 million. Although performance recovered compared with the same period of the previous year, significant uncertainty remains in the business environment due to the impact of COVID-19, and events or circumstances exist that raise substantial doubt about the Company's ability to continue as a going concern.」

「Under these circumstances, during the cumulative first quarter under review, we recorded unprecedentedly severe losses, including an operating loss of ¥1,065 million and a quarterly net loss of ¥1,112 million.」

「At the Company, the number of guests since February 2020 has fallen sharply due to a succession of cancellations of lodging, banquets and other services, as well as requests to refrain from operating. If this situation continues, additional financing may become necessary.」

「There were no newly arising business or other risks during the cumulative third quarter under review. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「There were no newly arising business or other risks during the cumulative second quarter under review. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Although the hotel industry in Kyoto was affected by a succession of natural disasters last summer, inbound tourism subsequently showed signs of recovery, while domestic tourism remained strong.」

「The lodging segment at Kyoto Hotel Okura struggled through September due to the effects of natural disasters and other factors. In October and November, strong group bookings provided support, and individual customers also remained steady because the membership program integrated in July transitioned smoothly, resulting in revenue increasing by ¥16 million from the same period of the previous year.」

「The lodging segment at Kyoto Hotel Okura performed well through May, but cancellations caused by natural disasters, including the northern Osaka earthquake and direct typhoon impacts, resulted in revenue declining by ¥13 million from the same period of the previous year.」

「Lodging revenue at Kyoto Hotel Okura had remained strong, supported by high-price sales during the cherry blossom season in April, particularly steady growth in reservations through overseas OTAs via internet sales, and an increase in individual members. However, cancellations resulting from the earthquake in June meant that revenue ended only ¥10 million higher than in the same period of the previous year.」

「There were no newly arising business or other risks during the cumulative fourth quarter under review. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative third quarter, no new business or other risks arose. In addition, there were no material changes in the business or other risks described in the annual securities report for the previous fiscal year.」

「During the cumulative second quarter, no new business or other risks arose. In addition, there were no material changes in the business or other risks described in the annual securities report for the previous fiscal year.」

「No new business or other risks arose during the cumulative first-quarter period. There were also no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Because we accommodate guests from throughout Japan and around the world, we may be affected by natural disasters, disease, war, terrorism and other events.」