In February 2024, we announced the Medium-term Plan 2028, “Shine for Tomorrow, to THE FUTURE.” Addressing the three important issues of establishing a foundation for sustainable growth unaffected by external factors, acquiring and developing human resources, and building a sound financial base, we are seeking to attain these with five strategies: the business strategy, human resource strategy, financial strategy, sustainability strategy, and growth strategy.

Among these, we will report on three: The business, human resource, and financial strategies.

▪About the business strategy

Regarding business, in 2024, the first year of the project, per-unit pricing increased significantly, mainly in the lodgings segment, due to the steady acquisition of growing inbound demand and the improvement of added value and productivity.

In the WHG business, we progressed with renovation of guest rooms, restaurants, and lounges to improve convenience and comfort. Additionally, through training based on our new training program, we are raising the standard for service throughout the chain, and promoting initiatives to improve both the facilities/equipment and the service. Through these measures, we will work to establish a hotel brand that is preferred by guests.

In the luxury and banquet business, Hotel Chinzanso Tokyo has been working to create value-added products and improve profitability through effective use of its assets, including the launch of a postpartum care service business using certain guest rooms, and the renovation of one chapel into an executive lounge for the exclusive use of guests staying in suite rooms. In addition, Share Clapping Co., Ltd. in Hiroshima is promoting collaborations with outside venues by using its wedding production knowledge.

In the resort business, profits increased significantly thanks to the effects of the redevelopment of Hakone Kowakien, including the year-round operation of the Hakone Kowakien Hotel, which opened in July 2023, and an increase in the number of visitors to Hakone Kowakien Yunessun as a result of renovations and circulation from the hotel. To maximize these effects, we are seeking to make the resort known as a must-see location for tourists visiting Hakone, by promoting the Hakone Kowakien tourism destination strategy throughout the Hakone Kowakien area as a whole, including the implementation of activities.

As a result, overall sales of the Group increased by 11.6 billion yen year-on-year to 76.2 billion yen, operating income increased by 5.6 billion yen year-on-year to 12.3 billion yen, ordinary income increased by 5.5 billion yen year-on-year to 12.6 billion yen, and income attributable to shareholders of the parent company increased by 1 billion yen year-on-year to 9.1 billion yen. Operating income and ordinary income reached record highs, and net income attributable to shareholders of the parent company also reached a record high.

▪About the human resource strategy

In regard to human resources, as one of our management principles states, “We believe that he foundation of a company is its people, and the development of human resources is the basis for corporate development, and therefore will build human resources with strong ambition and balance. It is with this belief that people are the key to growth that we further our initiatives.

In April 2024, we improved compensation and strengthened the shortened working hour system for childcare, and also established a new system subsidizing the cost of updating the status of residence for foreign-nationality employees. Meanwhile, we are resuming training programs that were suspended during the pandemic, and are furthering use of an in-house recruitment system. Through these initiatives, we will establish a positive cycle enabling us to secure stable human resources by creating a comfortable working environment and assigning and training suitable people in appropriate positions.

▪About the financial strategy

Of the unredeemed Class A preferred stock issues on September 28th, 2021, 40 shares were redeemed (acquired and cancelled) on August 23rd, 2024, and 40 shares were redeemed (acquired and cancelled) on December 20th, 2024, bringing the number of unredeemed shares to 20.

With improved profitability, we are on track with the issue of redemption of our Class A preferred stock. After the first three years of the medium-term management plan were positioned as the foundation-building phase, we are moving ahead to work on initiatives for the growth and expansion phase.

For 2025, we plan full-year sales of 78.6 billion yen, operating income of 12.0 billion yen, and ordinary income of 11.7 billion yen. We will continue to raise the average guestroom unit price by improving product and brand strength, and will simultaneously make aggressive investments that contribute to earnings growth in accordance with the medium-term management plan. Large-scale renovations are planned at several WHG business locations in order to respond to changing needs. Although operating income is expected to decrease by 300 million yen from the previous year as an effect of the period during which room sales will be suspended, we believe this to be an important investment aimed at improving customer satisfaction over the medium to long term, and that it will contribute to strengthening our base of earnings in the future.

In the fall of 2024, we also introduced “BizNex,” a system for open solicitation of commercialization ideas enabling employees to take on the challenge of creating new business. Throughout the period of the medium-term management plan, we will work to expand our business area through a variety of methods, including industry-government and industry-academia collaborations.

November 7th, 2025 will mark 70 years in business for our company. Preceding the formation of the travel industry in Japan, we opened Hakone Kowakien in 1948, and Chinzanso (now Hotel Chinzanso Tokyo) in 1952, forming our company in 1955. In the years since, we have developed our business in lodging, resorts, weddings, and leisure, carrying on our founding philosophy of providing a memorable location with welcoming service. We would like to express our sincere gratitude to our guests and stakeholders for allowing us to continue business for this long period of time.

On this occasion of our 70th anniversary, we have launched a project to promote anniversary planning by soliciting applications from within the company. In addition to projects that will be enjoyed by our guests, we are planning and promoting projects from the bottom up to create opportunities contributing to employee engagement.

Lastly, as a result of structural reforms, value-added improvements, and other initiatives implemented with your support, we have resolved to resume dividends (on common stock) for the first time in five fiscal years, since 2019. In order to realize our long-term vision, we will continue to grow through business development that relates closely to various aspects of our customers’ lives. We humbly request the continued support of our shareholders.

Shinsuke Yamashita
Representative Director and President,
Executive Officer
Fujita Kanko Inc.