Polaris Holdings Co., Ltd.

Business Details

Consists of three businesses: the Management Business (direct operation of self-owned and leased hotels), the Operation Business (contracted operation for real estate owners), and the Franchise Business (Best Western and the company's own KOKO HOTEL brand FC affiliation operations). Operates mainly in Japan, with expansion also in the Philippines. In addition to the effects of the December 2024 business integration with Minacia, the company newly opened 8 hotels during FY2026 (ending March 2026), further expanding its hotel operation platform. The company aims to capture inbound demand while pursuing higher room rates and stable occupancy through revenue management as pillars of profitability.

Recent Overview

Revenue surged 78.4% year on year, driven by the Minacia integration effect and the opening of 8 new hotels.

In FY2026 (ending March 2026), Hotel Operation Business revenue was ¥48,435 million (up 78.4% year on year), and segment operating income was ¥5,099 million (up 73.3% year on year), representing substantial growth in both revenue and profit. In addition to the full-year contribution from the business integration with Minacia completed in December 2024, the company opened 8 new hotels: KOKO HOTEL Numazu Interchange and Numazu Ekimae (April), KOKO HOTEL Osaka Namba Sennichimae (May), Hotel Futari Komorebi (July), KOKO HOTEL Tokyo Nishikasai and Yokohama Tsurumi (August), yugen kyoto shijo (September), and Compass Hotel Nagoya (February 2026). Rebranding toward brand integration under "KOKO HOTELS" is also underway. Goodwill amortization increased substantially from ¥326 million in the prior period to ¥1,304 million, reflecting the full-year impact of the Minacia integration.

Key Products

Growth Drivers

• Continued expansion of inbound demand (the number of foreign visitors to Japan in March 2026 alone reached a record high)
• Platform scale expansion and full-year contribution from the business integration with Minacia completed in December 2024
• Enhanced brand value and recognition through brand integration and rebranding under "KOKO HOTELS"
• Maintenance of high occupancy rates and increases in average daily rate (ADR) through precise revenue management
• Continued opening of new hotels (8 hotels opened during FY2026, ending March 2026) and expansion of the number of hotels planned for operation
• Improved long-term profitability through the shift in hotel operation format from contracted operation to leasing

Risks

• Goodwill balance is at a high level of ¥24,446 million (end of FY2026, ending March 2026), presenting impairment risk in the event of business deterioration
• Risk of delays or cost overruns in PMI (post-merger integration) with Minacia
• Risk of rising operating costs due to inflation and increased labor costs
• Risk of downside in inbound demand due to geopolitical risks, such as the Chinese government's request for its citizens to refrain from traveling to Japan
• Impact on the domestic economy and inbound demand from geopolitical uncertainty, including US trade policy and Middle East affairs
• Risk of temporary declines in accommodation demand due to natural disasters (typhoons, earthquakes, etc.)
• Goodwill amortization expense continues at a high level of approximately ¥1,304 million annually, pressuring reported net income