EURASIA TRAVEL Co.,Ltd.

The Group's core business is the planning and sale of overseas travel, and the occurrence of political instability, war, conflict, or terrorist incidents in overseas regions may lead to the cancellation of tours, directly affecting business performance. Furthermore, depending on the severity of such events, overall demand for overseas travel may decline through deterioration in customer sentiment, potentially resulting in a significant decrease in revenue. Although the Group has adopted a policy of risk prevention, diversification, and hedging, complete avoidance of geopolitical risk is difficult.

The occurrence of natural disasters (earthquakes, floods, typhoons, etc.) at overseas travel destinations may lead to the cancellation of tours or a decline in travel demand, potentially affecting the Group's business performance. Natural disasters are difficult to predict, and depending on the region and scale of occurrence, there is a risk that sales for specific destinations may be suspended over an extended period. The Group has adopted a policy of risk diversification, but the impact may be magnified in cases of high dependence on specific regions.

Land costs, which account for approximately half of the Group's cost of sales, have a high proportion of foreign currency-denominated payments, and fluctuations in exchange rates directly affect procurement costs and business performance. The Group hedges risk through pricing based on the exchange rate at the time of price determination for products and through forward exchange contracts based on expected foreign currency handling amounts; however, if exchange rate fluctuations exceed expectations, the hedges may not function effectively, potentially adversely affecting business performance. In particular, during periods of yen depreciation, the risk of rising procurement costs squeezing profitability increases.

If a global outbreak (pandemic) of an infectious disease such as a novel strain of influenza or COVID-19 occurs, travel restrictions may be imposed between Japan and overseas countries, potentially significantly constraining the Group's business activities. Given the Group's business structure, which is close to being exclusively focused on overseas travel, travel restrictions directly lead to a substantial decline in sales, posing a risk of serious impact on business continuity. The Group has adopted a policy of risk prevention, diversification, and hedging, but the loss of demand during a pandemic is difficult to address in the short term.