THE KYOTO HOTEL, LTD.
9723・Standard Market・Services
Business
Kyoto Hotel Co., Ltd. is a long-established Kyoto hotel company founded in 1888 (Meiji 21), set to mark its 140th anniversary in 2028. The company operates two properties—The Okura Kyoto (320 guest rooms) and Karasuma Kyoto Hotel (231 guest rooms)—and conducts a single-segment business centered on accommodation, banquets, and restaurants. Its main customers span a wide range, including domestic and international individual travelers, corporate and group clients (including MICE demand), and members of the Okura Nikko Hotels loyalty program "One Harmony." Listed on the Standard Market of the Tokyo Stock Exchange, the company maintains a stable customer base leveraging brand strength and a reservation network under a business and sales alliance agreement with Okura Nikko Hotel Management Co., Ltd. (in effect through FY2027, ending March 2027).
Business Model
Of net sales of ¥9,772 million, the accommodation segment accounted for 43.5% (¥4,249 million), the banquet segment 29.6% (¥2,890 million), the restaurant segment 21.5% (¥2,103 million), and other 5.4% (¥528 million). This is a hybrid model that enhances profitability through high-value orders for MICE and large-scale banquets and optimization of room rates, while maintaining a room occupancy rate of 82.16% at Hotel Okura Kyoto and 89.35% at Karasuma Kyoto Hotel. Hotel Okura Kyoto's building operations adopt an asset-light model in which both the land and building are leased.
Company Strengths
Under the business and sales alliance agreement (April 2022 to March 2027) with Okura Nikko Hotel Management Co., Ltd., the company secures stable accommodation demand by leveraging the membership program "One Harmony". In FY2026 (ending March 2026), inbound group travel including MICE remained strong throughout the year, and accommodation segment sales reached ¥4,249 million (up 3.5% year on year).
Through proactive sales activities by the sales department, the company secured MICE projects and large-scale, high-value banquets from both Tokyo and overseas. In FY2026 (ending March 2026), banquet segment sales reached ¥2,890 million (up 11.8% year on year), the largest growth among all segments, with both the number of attendees and the unit price per event exceeding the previous year's levels.
As a result of wage increases for three consecutive years, enhanced employee benefits, and expanded tiered and skill-development training programs, the number of resignations declined and the company secured more staff than in the previous year. This has contributed to maintaining and improving service quality, and the securities report explicitly identifies human resource acquisition and retention as a priority measure under the Third Medium-Term Management Plan.
ENVALITH's Perspective
Performance Trend
Revenue bottomed out at ¥4,268 million in FY2022 (ended March 2022) before staging a V-shaped recovery, reaching ¥9,772 million in FY2026 (ending March 2026), marking five consecutive years of revenue growth. Operating profit reached ¥1,108 million in FY2026 (ending March 2026) (operating margin of 11.3%), surpassing the ¥953 million recorded in FY2024 (ended March 2024) and renewing the record high. Externally, expanding inbound demand (a record 42.68 million foreign visitors to Japan in 2025) and resilient domestic tourism demand provided tailwinds. Meanwhile, cost pressures continued from wage base increases (for three consecutive years), rising energy costs, and higher interest expenses (¥205 million). For FY2027 (ending March 2027), operating profit is projected at ¥800 million (down 27.8% year on year), a substantial profit decline, leaving challenges for sustained margin improvement.
Growth Strategy
Strengthening the revenue base through aggressive acquisition of inbound and MICE demand and maximizing occupancy rates by postponing facility renovation
Achieved accommodation segment revenue of ¥4,249 million (up 3.5% year on year) through utilization of the group's membership program "One Harmony" and aggressive acquisition of overseas MICE group tour bookings. Room rate improvement measures proved effective, contributing to improved profitability.
Achieved banquet segment revenue of ¥2,891 million (up 11.8% year on year) through aggressive acquisition of MICE bookings from Tokyo and overseas and high-value large-scale banquet events. Both the number of attendees and unit price per event exceeded the previous year's levels, recording the highest growth rate of all segments.
The guest room renovation originally planned to begin in 2026 under the Third Medium-Term Management Plan has been postponed for the time being due to instability in materials procurement caused by the situation in the Middle East. As a result of the postponement, the room sales stoppage will be lifted, which is expected to lead to an increase in occupancy rate and revenue in FY2027 (ending March 2027). The company will monitor improvements in materials prices and the procurement environment before deciding on the timing of resumption.
Promoting improved treatment through wage increases for three consecutive years and enhanced benefits, along with expanded tiered training, skill-up training, and self-development support. In FY2026 (ending March 2026), this led to a decrease in the number of resignations and secured a headcount exceeding that of the previous year, contributing to the maintenance and improvement of service quality.
Joined the "Fry to Fly Project," which utilizes used cooking oil as a raw material for SAF (Sustainable Aviation Fuel), starting in September 2025. Began providing vaccine support to developing countries through the collection and recycling of PET bottle caps starting in November 2025. Promoting contributions to resource circulation and decarbonization.
Last updated: July 19, 2026