ENVALITH
株式会社ホテル、ニューグランド logo

HOTEL NEWGRAND CO.,LTD.

9720・Standard Market・Services

Official website
株式会社ホテル、ニューグランド logo
HOTEL NEWGRAND CO.,LTD.9720

Business

Hotel New Grand Co., Ltd. is a company centered on a historic classic hotel that opened in 1927 in front of Yamashita Park in Yokohama. In its core hotel business, the company operates three segments—accommodation, restaurants, and banquets (including weddings)—and also runs restaurants within Takashimaya Yokohama Store and Sogo Yokohama Store. Since 2024, the company has been developing directly-operated shops for its second brand "S.Wille," cultivating an external sales business as its fourth pillar. The real estate leasing business, which manages the leasing of office buildings and other properties, serves as a stable source of income. The company is listed on the Standard Market of the Tokyo Stock Exchange. It will mark its 100th anniversary in 2027.

Business Model

Hotel operations account for approximately 99% of net sales, with three segments forming the earnings pillars: accommodation (¥2,058 million), banquets (¥2,314 million), and restaurants (¥1,455 million). The company aims to expand sales by capturing inbound and domestic tourism demand while improving occupancy rates and average room rates. The real estate leasing business, though generating only ¥48 million in net sales, is highly profitable with an operating margin of 76.5% and generates stable cash flow. Capital expenditures are funded through internal funds and long-term borrowings, and operating cash flow of ¥682 million (FY2025) has been secured at a level exceeding investment.

Company Strengths

As a classic hotel that opened in 1927, it is a landmark representing Yokohama, with signature original menu items such as Napolitan and seafood doria. Its rarity as a historic structure and its ability to provide "products and services that surprise and move guests" give it brand strength that allows it to avoid price competition. Ahead of its 100th anniversary in 2027, the company is working to further enhance its brand value.

Revenue expanded roughly twofold from ¥3,196 million in FY2021 to ¥6,530 million in FY2025. The company turned operating profit positive in FY2023, and in FY2025 achieved year-on-year revenue growth of 11.5% and operating profit growth of 19.1%. All segments grew, with lodging up 13.3%, banquets up 10.7%, and restaurants up 4.5%, demonstrating the sustainability of the earnings recovery.

The real estate leasing business boasts extremely high profitability, with revenue of ¥48 million against operating profit of ¥37 million, an operating margin of 76.5%. It is an asset-light model requiring almost no capital investment, securing stable rental income through continued contracts with existing tenants. It functions as an earnings stabilizer that hedges against volatility risk in the hotel business.

ENVALITH's Perspective

Interim net income of ¥534 million for the first half of FY2026 (ending November 2026) (up 43.9% year-on-year) was significantly boosted by the recognition of extraordinary income of ¥80 million from fixed asset rights conversion gains and reduced tax burden from income tax adjustment (deferred tax asset recognition). Ordinary income of ¥411 million is closer to the true underlying strength of the core business, and considering the gap with the full-year net income forecast of ¥333 million (ordinary income of ¥320 million), it should be noted that the second half is expected to see the extraordinary income fall away and tax burden normalize.

Cash flow from investing activities for the first half of FY2026 (ending November 2026) expanded significantly to ¥(647) million (compared to ¥(191) million in the same period last year). The main driver was ¥555 million in acquisitions of property, plant and equipment, with construction in progress also doubling from ¥175 million at the previous fiscal year-end to ¥353 million. Operating cash flow remained solid at ¥459 million, but free cash flow turned negative, and cash and cash equivalents declined to ¥2,084 million. This can be interpreted as strategic investment ahead of the 100th anniversary of the company's founding in 2027, but progress on investment returns needs to be continuously monitored.

Against the full-year earnings forecast (revenue of ¥6,800 million, operating income of ¥330 million), the interim revenue progress rate stood at a generally solid 52.2%, but the operating income progress rate has already exceeded the full-year forecast at 120.1%. This suggests that increased costs and the falling away of extraordinary income are factored into the second half. As external factors, upward pressure on labor and food material costs from continued price inflation, as well as uncertainty over inbound demand stemming from US trade policy, remain as risk factors for second-half performance.

Growth Strategy

Strengthening the management foundation through capital expenditure ahead of the 100th anniversary of opening in 2027 and three strategies covering personnel, branding, and growth

Construction in progress doubled from ¥175 million at the end of the previous fiscal period to ¥353 million, with acquisitions of tangible fixed assets of ¥555 million, accelerating capital expenditure. The company aims to improve accommodation and banquet unit prices and acquire new customers by enhancing facility value ahead of the 100th anniversary of its opening in 2027."

In the interim period of FY2026 (ending November 2026), the company achieved revenue growth across all segments: a 9.5% increase in the accommodation segment, a 10.4% increase in the restaurant segment, and a 6.3% increase in the banquet segment. It continues to promote improvements in occupancy rates and room unit prices across segments to enhance the overall profitability of the hotel business.

In the real estate leasing business, which has an operating margin of approximately 78%, the company achieved a 20.2% increase in revenue compared to the same interim period of the previous fiscal year while maintaining continued contracts with existing tenants. This asset-light model, which requires no capital expenditure, generates stable cash flow and secures investment capacity for the hotel business.

Last updated: July 17, 2026