Ooedo-Onsen Monogatari Group
Growth factors for the Ooedo-Onsen Monogatari Group
1. Stable demand for onsen facilities rooted in Japanese culture
Demand for onsen facilities, which is rooted in Japanese culture, is stable in the long term. With the progression of aging society, Ooedo Onsen Reit Investment Corporation (the “Investment Corporation”) believes that continued stable demand can be expected from the senior age group, which is a main target demographic of the Ooedo-Onsen Monogatari Group. Up to now, the Ooedo-Onsen Monogatari Group has managed to expand its operations without relying significantly on demand from overseas visitors to Japan. In recent years, however, demand from overseas tourists has been on a rising trend. Coupled with the Japanese government’s policy of promoting the country as a major tourist destination, this can be expected to bring expanding demand for onsen facilities. We believe that this trend will help to strengthen the growth and stability of the Ooedo-Onsen Monogatari Group in the medium to long term.
2. The Ooedo-Onsen Monogatari Group’s unique business model (the Ooedo business model)
●Combining high-quality services with affordable prices
The introduction of a chain-style operation1 targeting rationalization and greater efficiency in facility operation has made it possible to combine affordable prices with high-quality services in onsen bathing, meals, in-facility entertainment, and other areas. We believe that this has allowed us to maintain our high guestroom occupancy rate,2 supported mainly by the senior age group on weekdays and family groups on weekends and holidays.
|(Note 1)||Chain-style operation is an efficient business method for the rollout of multistore operations whereby new store opening, product planning, procurement of supplies, advertising and other operations are handled centrally by a headquarters organization.|
|(Note 2)||Guestroom occupancy rate is calculated according to the formula below.
Guestroom occupancy rate = number of guestrooms sold during relevant period / number of rooms available for sale during relevant period ×100 (%)
Concrete examples of improved business performance through introduction of the Ooedo business model
Improved profitability following acquisition due to introduction of the Ooedo business model
Thus far, introduction of the Ooedo business model has achieved improvement in revenues at onsen and spa-related facilities acquired by the Ooedo-Onsen Monogatari Group. Accordingly, we believe that introduction of the Ooedo business model at facilities to be acquired in the future by the Ooedo-Onsen Monogatari Group can likewise be expected to lead to improved profitability.