Hello, everyone. This is Kawakami, Head of IR. I will now go over the highlights of the presentation titled Overview of Financial Results for the three months ended June 30, 2023, which we disclosed today. Please turn to page four. This page summarizes our first quarter results. Operating revenue improved, backed by the recovery and demand, driven by factors such as the reclassification of COVID-19 to a Class 5 infectious disease, as well as our efforts to raise prices, mainly in the hotels business. Operating profit also grew due to the growth in our top line, despite the increase in personnel and power costs. We achieved growth in both revenue and profit in all business segments, which we describe together with the key factors on pages five and six.
We were able to outperform the earnings forecast announced in May in terms of operating revenue as well as for each of the profit items. Going forward, in the second quarter onwards, fixed costs may end up being lower than expected, thanks to better cost control as well as power costs being lower than expected. We still need to monitor whether we can actually achieve the recovery anticipated at the beginning of the year, and that is why we have decided to not change the May earnings forecast. On pages eight onwards, we explain the progress of our initiatives outlined in the Mid-Term Management Plan. Please turn to page 16. This slide is about the capital recycling business.
We are currently making considerations about the capital recycling business from the perspectives of promoting asset-light management, enhancing capital efficiency by securitizing properties developed or owned by Seibu, and reinvesting the proceeds for new developments and growth investments, as well as optimizing the real estate portfolio and achieving financial soundness with upcoming investments to redevelop our properties in central Tokyo, as well as investments to enhance the value of our resort properties. Today, we selected Mizuho Financial Group as our collaboration partner in setting up the asset management company. We will collaborate with Mizuho Financial Group, which has extensive expertise in the capital recycling business and consider what kind of real estate portfolio we should aim for, set up the asset management company with speed, obtain the necessary approvals, and acquire the expertise and know-how. The expected timeline is shown in the middle of the slide.
In selecting the properties that will be subject to this business, we will assess all properties in the group's real estate portfolio, including Tokyo as well as the resort properties, from the perspective of capital efficiency and growth potential. We plan to announce the results in around May of next year. In terms of size, we will begin with several tens of billions of yen and are planning to grow the AUM to more than JPY 300 billion in the midterm. Please see page 34 for trends in the railway and the domestic hotel businesses. This slide is about the railway business. The graph at the top shows the first quarter results of passenger revenue, as well as the assumptions used in the earnings forecast for Q2 onwards. For the first quarter, things were in line with our initial forecast. Please turn to page 35.
This slide is about trends in accommodation in our domestic hotel operations. The graph at the upper left shows the Q1 results in terms of ADR and occupancy, as well as the assumptions used in the earnings forecast for Q2 onwards. Although occupancy in Q1 was slightly below our forecast, we outperformed in terms of ADR and RevPAR was above our forecast. We are continuing to raise our pricing in the second quarter and in terms of our outlook as of July 24th, for both July and August, we are expecting ADR to exceed 2019 by around 20% and RevPAR to be around 103% that of 2019. As for the status of inbound demand, in terms of room revenue in the domestic hotels business, our expectation at the beginning of the year was for it to recover to around 90% that of fiscal year 2018.
For August and September, it is trending at around 105%. This concludes my presentation. Thank you.