Improving earnings and customer satisfaction at existing hotels and making new investments

「The company plans to flexibly reallocate the funds received from the transfer to growth investments centered on the Narita area and to the acquisition and operation of the new Hotel Arrore in the Kaga area.」

「Supported by the favorable external environment of expanding inbound demand, including an increase in visitors to Japan, Narita Gateway Hotel maintained occupancy and average room rates above the levels of the same period of the previous year. In addition to strengthening group sales and bringing pricing in-house, the company improved the accuracy of revenue management using digital transformation and AI, contributing to improved profitability. Combined results for the two hotels resulted in higher revenue and profit for the segment as a whole. Hotel business revenue for the interim consolidated accounting period was ¥657 million, up 19.3% year on year, and operating profit was ¥56 million, compared with an operating loss of ¥25 million in the same period of the previous year.」

「For Hotel Arrore, to which operational support has been provided since May 2024, the company is preparing the operational support structure and laying the groundwork for future integration into the group. Through strategic management that leverages each hotel's individual characteristics, it will seek both to enhance the corporate value of the hotel segment as a whole and to contribute to local communities.」

「As for operating profit, management switched from outsourced operation to in-house operation in January this year and renewed the core system to strengthen customer acquisition and improve operational efficiency. In July, it introduced self-service check-in machines to reduce and streamline reception staffing and replaced the room card keys.」

「The hotel business is developing spaces at both Narita Gateway Hotel and Kurashiki Royal Art Hotel that can serve as bases for regional revitalization and community development. With a future hotel group in mind, it has also begun providing operational support to Hotel Arrore in Kaga, Ishikawa Prefecture, as a third base.」

「Based on a request from Chiba Prefecture, Narita Gateway Hotel operated for approximately 3 years from April 2020 as a temporary medical care facility for asymptomatic and mildly symptomatic COVID-19 patients. Following a substantial decline in new cases in Japan and the reclassification of COVID-19 as a Class 5 disease, the provision of the facility ended at the end of May 2023. Since hotel operations resumed in June 2023, the hotel has remained in the early stages of its ramp-up following a 3-year suspension and has been gradually increasing occupancy. In addition, the return of group guests from China, who were a major customer base before COVID-19, remains slow. As a result, revenue declined compared with the same period of the previous year, when the hotel operated as a medical care facility, and hotel business revenue and profit declined year on year for the cumulative third quarter.」

「Combined results for the two hotels were substantially affected by performance after Narita Gateway Hotel resumed hotel operations. The segment as a whole therefore recorded lower revenue and profit. Hotel business revenue for the cumulative second quarter was ¥485 million, down 10.9% year on year, and the operating loss was ¥17 million, compared with operating profit of ¥86 million in the same quarter of the previous year.」

「Based on a request from Chiba Prefecture, Narita Gateway Hotel operated for approximately 3 years from April 2020 as a temporary medical care facility for asymptomatic and mildly symptomatic COVID-19 patients. Following a substantial decline in new cases in Japan and the reclassification of COVID-19 as a Class 5 disease, the provision of the facility ended at the end of May 2023. In June 2023, when hotel operations resumed, revenue fell substantially as expected compared with the same month of the previous year, when the facility was operating as a medical care facility, because it was the first month of the ramp-up following a 3-year suspension of hotel operations and the hotel was in the process of gradually restoring occupancy while preparing to attract inbound tourists and other guests. Consequently, hotel business revenue and profit declined year on year for the cumulative first quarter. At Kurashiki Royal Art Hotel, however, occupancy and average room rates improved substantially year on year as activity began returning to the Kurashiki Bikan Historical Quarter following the reclassification of COVID-19 as a Class 5 disease and the return of inbound tourists, particularly from Europe and North America. Revenue and profit therefore increased.」

「At Kurashiki Royal Art Hotel, average room rates improved substantially following changes in public attitudes toward the spread of COVID-19 variants and the government's nationwide travel support program launched in October. However, the number of hotel guests and occupancy from October through December declined year on year. Combined results for the two hotels therefore resulted in substantial increases in revenue and profit for the segment as a whole. Hotel business revenue for the cumulative third quarter was ¥835 million, up 15.4% year on year, and operating profit was ¥143 million, up 138.4% year on year.」

「At Kurashiki Royal Art Hotel, occupancy and average room rates improved substantially year on year during the cumulative second quarter, reflecting changes in public attitudes toward the spread of COVID-19 variants and other factors. Revenue and profit therefore increased. As a result, hotel business revenue was ¥543 million, up 23.2% year on year, and operating profit was ¥85 million, up 383.2% year on year.」

「At Kurashiki Royal Art Hotel, hotel occupancy improved substantially year on year during the cumulative first quarter, reflecting changes in public attitudes toward the spread of COVID-19 variants and other factors. As a result, hotel business revenue was ¥258 million, up 22.3% year on year, and operating profit was ¥42 million, up 2,412.7% year on year.」

「Narita Gateway Hotel has been leased to Chiba Prefecture since 18 April 2020 as a medical care facility for asymptomatic and mildly symptomatic COVID-19 patients and has not accepted general guests since then. At Kurashiki Royal Art Hotel, although the spread of COVID-19 variants improved substantially from October of the previous year, infections began spreading again from January. As a result, hotel business revenue for the fiscal year was ¥956 million, up 0.2% year on year, and operating profit was ¥47 million, up 27.2% year on year.」

「At Kurashiki Royal Art Hotel, the number of hotel guests in the third quarter increased from the first half, or the cumulative second quarter, as the spread of COVID-19 variants improved substantially from October onward. As a result, hotel business revenue for the cumulative third quarter was ¥724 million, down 1.2% year on year, and operating profit was ¥60 million, up 40.7% year on year.」

「Narita Gateway Hotel has been leased to Chiba Prefecture since 18 April 2020 as a medical care facility for asymptomatic and mildly symptomatic COVID-19 patients and has not accepted general guests since then. At Kurashiki Royal Art Hotel, the number of hotel guests in the second quarter declined slightly year on year, unlike in the cumulative first quarter, due to the rapid spread of COVID-19 variants from July onward. As a result, hotel business revenue for the cumulative second quarter was ¥441 million, up 3.5% year on year, and operating profit was ¥17 million, compared with an operating loss of ¥12 million in the same quarter of the previous year.」

「Narita Gateway Hotel has been leased to Chiba Prefecture since 18 April 2020 as a medical care facility for asymptomatic and mildly symptomatic COVID-19 patients and has not accepted general guests since then. Although Kurashiki Royal Art Hotel continued to be affected by COVID-19, the number of hotel guests improved year on year. As a result, hotel business revenue for the cumulative first quarter was ¥211 million, up 22.2% year on year, and operating profit was ¥1 million, compared with an operating loss of ¥35 million in the same quarter of the previous year.」

「The hotel business will deepen its collaboration with local communities and work to create new customer experience value in order to address new tourism demand in the post-pandemic normal. In terms of operations, it will pursue labor savings and other efficiencies through digital transformation and work to restore profitability.」

「Narita Gateway Hotel was leased to Chiba Prefecture from 18 April as a medical care facility for asymptomatic and mildly symptomatic COVID-19 patients and has not accepted general guests since then. Kurashiki Royal Art Hotel was also severely affected by COVID-19, including a substantial year-on-year decline in hotel guests. However, government and local-government tourism support policies had a particularly significant effect during the third quarter, resulting in hotel business revenue of ¥733 million for the cumulative third quarter, down 35.9% year on year, and operating profit of ¥42 million, down 70.2% year on year.」

「Narita Gateway Hotel was leased to Chiba Prefecture from 18 April as a medical care facility for asymptomatic and mildly symptomatic COVID-19 patients and has not accepted general guests since then. Kurashiki Royal Art Hotel was also severely affected by COVID-19, including a substantial year-on-year decline in hotel guests. As a result, hotel business revenue for the cumulative second quarter was ¥426 million, down 45.2% year on year, and the operating loss was ¥12 million, compared with operating profit of ¥110 million in the same quarter of the previous year.」

「Narita Gateway Hotel was leased to Chiba Prefecture from 18 April as a medical care facility for asymptomatic and mildly symptomatic COVID-19 patients and has not accepted general guests since then. Kurashiki Royal Art Hotel was also severely affected by COVID-19, including a substantial year-on-year decline in hotel guests. As a result, hotel business revenue for the cumulative first quarter was ¥173 million, down 56.1% year on year, and the operating loss was ¥35 million, compared with operating profit of ¥61 million in the same quarter of the previous year.」

「At Narita, the Company successfully captured inbound demand, while at Kurashiki, results benefited from renovations at nearby competing hotels and other factors, and revenue and operating profit remained strong through the end of the fiscal year. However, the business was affected by COVID-19 toward the fiscal year-end. As a result, revenue from the hotel business for the consolidated fiscal year was ¥1,378 million, down 4% year on year, and operating profit was ¥86 million, down 45.4%.」

「At Narita, spot demand, including demand related to the Rugby World Cup, improved occupancy year on year. At Kurashiki, the results were affected by renovations at nearby competing hotels and other factors. As a result, revenue from the hotel business for the third quarter of the consolidated cumulative period was ¥1,143 million, up 2.7% year on year, while operating profit was ¥155 million, down 3.2%.」

「At Narita, the number of inbound group guests increased and occupancy improved. At Kurashiki, the results were affected by renovations at nearby competing hotels and other factors. As a result, revenue from the hotel business for the second quarter of the consolidated cumulative period was ¥778 million, up 5.2% year on year, and operating profit was ¥118 million, up 7.4%.」

「At Narita, the number of inbound group guests increased and occupancy improved. At Kurashiki, the results were affected by renovations at nearby competing hotels and other factors. As a result, revenue from the hotel business for the first quarter of the consolidated cumulative period was ¥394 million, up 4.7% year on year, and operating profit was ¥65 million, up 12.0%.」

「At Narita, room rates for inbound group guests improved, while occupancy declined during the off-season as competition intensified in the Tokyo metropolitan area. At Kurashiki, after the torrential rains in western Japan last July, the business faced opposing factors, including a temporary decline in demand in the food and beverage division and exceptional reconstruction-related demand in the lodging division. From a year-on-year comparison perspective, the results were also affected by the closure of the entire facility during major equipment replacement work from January to February last year. As a result, revenue from the hotel business for the consolidated fiscal year was ¥1,436 million, up 4.6% year on year, and operating profit was ¥174 million, up 26.1%.」

「Although the improvement in room rates for inbound group guests continued, occupancy declined as competition intensified in the Tokyo metropolitan area. In addition, reconstruction demand following last year's torrential rains in western Japan had run its course. As a result, revenue from the hotel business for the third quarter of the consolidated cumulative period was ¥1,113 million, up 1.6% year on year, while operating profit was ¥160 million, down 0.7%.」

「After steadily working for several years to raise room rates, the Company improved rates for inbound group guests. However, due to the surge in heavy oil prices and the torrential rains in western Japan in July, revenue from the hotel business for the second quarter of the consolidated cumulative period was ¥740 million, up 2.0% year on year, while operating profit was ¥110 million, down 0.9%.」

「The hotel business generated revenue of ¥376 million for the first quarter of the consolidated cumulative period, up 3.5% year on year, and operating profit of ¥58 million, up 10.0%, primarily because the Company successfully attracted inbound group guests.」

「Although the number of visitors to Japan increased, room rates and occupancy both declined due to the growth of private lodging and the opening of new hotels. As a result, revenue from the hotel-related business for the third quarter of the consolidated cumulative period was ¥1,095 million, down 3.5% year on year, and operating profit was ¥161 million, down 20.4%.」

「The hotel-related business currently operates Narita Gateway Hotel in the Narita Airport area and Kurashiki Royal Art Hotel in the Kurashiki Bikan Historical Quarter area. Although the number of visitors to Japan increased, room rates and occupancy both declined due to the growth of private lodging and the opening of new hotels. As a result, revenue from the hotel-related business for the second quarter of the consolidated cumulative period was ¥725 million, down 7.6% year on year, and operating profit was ¥111 million, down 28.6%.」

「Although the number of visitors to Japan increased, room rates and occupancy both declined due to the growth of private lodging and the opening of new hotels. As a result, revenue from the hotel-related business for the first quarter of the consolidated cumulative period was ¥363 million, down 10.5% year on year, and operating profit was ¥53 million, down 36.8%.」

「Room rates declined at both hotels due to price competition with nearby hotels, but the Company upgraded facilities and renovated guest rooms to maintain competitiveness. As a result, the hotel-related business generated revenue of ¥1,463 million, down 6.3% year on year, and operating profit of ¥228 million, down 6.4%.」

「The hotel-related business currently operates Narita Gateway Hotel in the Narita Airport area and Kurashiki Royal Art Hotel in the Kurashiki Bikan Historical Quarter area. Room rates at both hotels declined due to price competition with nearby hotels, but the Company continued to reduce expenses. As a result, revenue from the hotel-related business for the third quarter of the consolidated cumulative period was ¥1,135 million, down 4.8% year on year, while operating profit was ¥202 million, up 0.7%.」

「In the hotel-related business, the Company currently operates Narita Gateway Hotel in the Narita Airport area and Kurashiki Royal Art Hotel in the Kurashiki Bikan Historical Quarter area. At Narita Gateway Hotel, the number of guests declined across the Narita area and room rates fell due to price competition with nearby hotels, but the Company worked to maintain the occupancy rate and reduce expenses through operating initiatives. At Kurashiki Royal Art Hotel, although corporate banquets and restaurant use for celebrations and weddings declined, both room rates and occupancy improved, partly due to the renovation of some guest rooms. As a result, revenue from the hotel-related business for the second quarter of the consolidated cumulative period was ¥785 million, down 2.7% year on year, while operating profit was ¥155 million, up 7.1%.」

「As a result, revenue from the hotel-related business for the first quarter of the consolidated cumulative period was ¥406 million, down 1.6% year on year, while operating profit was ¥84 million, up 12.7%.」

「We will seek to increase sales and profits at Narita Gateway Hotel and Kurashiki Royal Art Hotel by enhancing food and beverage services, providing employee training to improve customer satisfaction and collaborating with companies in other industries. We will also consider investing in new hotels.」