Hello, everyone. I'm Takaku from Kyoritsu Maintenance. Thank you very much for watching the video presentation of the financial results for the first half of the fiscal year ending March 2022 of Kyoritsu Maintenance Company Limited. We wish we could explain to you in person, but we decided to provide this video briefing instead, as your safety and prevention of spreading COVID-19 infection are our top priorities. Today, I'll explain the summary of financial results for the first half. Mr. Nakamura, President and CEO, will explain the full year earnings forecast. Now, let me start with the highlights of the first half. First point is about the dormitory business. While sales and profits declined affected by a lower occupancy rate at the beginning of the fiscal year due to COVID-19, the earnings structure remained stable, and the business is performing generally in line with the plan.
Second point is about the hotel business. The occupancy rate and the average room rate recovered from the previous year level, and net sales increased by 45% year-on-year. Its deficit was reduced in real terms, but it fell far short of the plan. Third point is about measures for the current fiscal year. In the first half, in addition to the existing cost reduction measures, we made additional efforts, mainly in sales promotion expenses, to achieve about JPY 600 million higher cost reduction than the plan. In the second half, we will continue to enhance our efforts in cost reduction. Regarding real estate sales and leaseback, we executed it for one property in the second quarter for about JPY 500 million on a profit basis. In the second half, eight properties are planned for about JPY 6.8 billion on a profit basis.
Fourth point is about the full year earnings forecast and the dividend policy. Although domestic demand is recovering, mainly in the hotel business, we have revised our full- year earnings forecast in light of the first half results. We plan JPY 10 per share each for interim dividend and year-end dividend to make the annual dividend JPY 20 per share. Next is about the consolidated results for the first half. Net sales increased 20.4% year-on-year to JPY 67.7 billion, and operating income was JPY -5.6 billion. Despite the declaration of state of emergency, hotel occupancy rates remained on a recovery trend to achieve sales growth. Operating income declined due to an accounting procedure. Let me explain based on a comparison excluding extraordinary factors.
In the same period of the previous fiscal year, about JPY 2.8 billion loss due to the request for closure to prevent the spread of COVID-19 infections was reclassified from operating loss to extraordinary loss. The figures before this reclassification are shown in the column marked B in red. There was one case of real estate sales and leaseback in the current fiscal year, while there was no case in the previous fiscal year, and this is described in column C. Excluding these two factors, net sales increased by JPY 6.2 billion, and operating income improved by JPY 1.2 billion compared with the same period of the previous year. Other financial indicators are as shown on the slide. Next, I will explain the operating income of major segments compared with the forecast.
In the dormitory business, the number of leased units was generally in line with our expectation, and cost reduction efforts also helped us to perform in line with the forecast. As for the hotel business, the first quarter was generally in line with the forecast, thanks to the rise in the occupancy rate during the Golden Week holiday period. On the other hand, in the second quarter, we initially estimated a significant improvement as the number of cases settled down. In summer, the number of cases increased sharply, and the state of emergency extended. As a result, operating income became much lower than the forecast. In the second quarter, sales and leaseback of real estate was executed for Keiun Tsuki no Usagi, located near the Izumo Taisha Shrine. The next slide shows net sales and operating income by segment in comparison with the previous fiscal year.
First, please look at the bars framed by a red solid line for the hotel business. In the previous fiscal year, we posted an extraordinary loss due to a request for closure to prevent the spread of infection. If we return it to operating loss, the results for the previous fiscal year can be expressed by the bars with red dotted lines. As such, both Dormy Inn and Resorts businesses reduced their operating loss in real terms to improve from the previous fiscal year. Regarding other segments, the increase in the development business comes from the real estate sales and leaseback explained earlier. Now I will move on to explanation by segment. First, let's talk about the dormitory business. The current fiscal year started with the occupancy rate of 92.1%, down 1.6 percentage points year-on-year.
This is because international students postponed their arrival in Japan, and corporate demand for training of new employees declined due to COVID-19. Continuing from the previous year, we implemented Novel Coronavirus Schooling Support Program, which is used by many dormitory students. This is a financial support measure to provide interest-free loans for dormitory fees. In-person classes have resumed at universities, and restrictions on the entry of international students and technical interns into Japan have been gradually eased. With these positive signs, we are aiming for a fast recovery to the pre-COVID performance. Under such a circumstance, we opened 11 facilities to increase 1,168 rooms in this fiscal year, and they had an effect on sales growth by JPY 500 million.
However, due to the postponement of student arrival in Japan and a decline in demand, net sales with existing facilities decreased by JPY 470 million. As a result, net sales for the first half decreased 0.8% year-on-year to JPY 23.2 billion. Operating income also declined by 8.5% year-on-year to JPY 2.5 billion, affected by the decreased number of rooms in operation in existing facilities. This slide shows the number of leased units and the occupancy rate at the beginning of the fiscal year for the dormitory business. The total number of leased units at the beginning of this fiscal year decreased 496 year-on-year to 38,402, and the initial occupancy rate was 92.1%.
The number of Japanese students, who account for most of the dormitory users, was up 590 from the previous year to 18,944, affected by the resumption of in-person classes at universities and increase of new partner schools. On the other hand, the number of international students declined to 1,934, down 532 from the previous fiscal year, due to continued restrictions on entry by COVID-19. As for employee dormitories, we could not achieve a full-fledged recovery, even though some companies held training sessions for new employees by delaying the scheduled dates. Next is the Dormy Inn business.
Despite the declaration of a state of emergency, repeat guests, mainly Doministas, who are fans of Dormy Inn, as well as families live near Dormy Inn, used our facilities for leisure activities in nearby places and sales were on a recovery trend. As a result, RevPAR for existing facilities increased by JPY 1,391 year-on-year, and sales grew by JPY 3.71 billion, and operating income also improved by JPY 2.51 billion. In July, we opened our fifth facility in Hokuriku area, Kaga no Hosen Onyado Nono Kanazawa. As a result, Dormy Inn business posted a 45% increase in net sales year-on-year to JPY 14.7 billion, and operating income was JPY -4.53 billion. Next page shows KPIs of Dormy Inn business, the occupancy rate and the average daily rate by month.
In this first half under review, despite the intermittent declaration of state of emergency, both occupancy rates and average daily rates exceeded the previous year results attributable to the sales of products for domestic leisure demand, such as the local stay plan. The occupancy rate and the average daily rate temporarily declined due to the increase in the number of cases in August and the extension of state of emergency until the end of September. However, in October, the occupancy rate rose to almost as high as the level in the previous fiscal year when Go To Travel campaign was held. In addition, the red dotted line shows the average occupancy rate of business hotels in Japan published by the Japan Tourism Agency.
As you can see, its trend of fluctuations due to changes in the environment, such as the declaration of state of emergency, is generally consistent with our trend. Still, our occupancy rates have been constantly higher than the industry average by about 30 points. We believe that many customers, including repeat customers, are choosing us even during the pandemic. For your reference, the current occupancy rate is 88% as of November 20th. It is even higher than October and continues to perform better year-on-year. The next slide shows RevPAR, which is calculated by multiplying the occupancy rate by the average daily rate. In this first half, RevPAR has been higher year-on-year, except for September, when the state of emergency was extended. Next is resorts business. It was on a recovery trend as Dormy Inn business.
Existing facilities recorded a sales increase of JPY 2.7 billion due to the resumption of operations at hotels that had been closed in the same period of the previous year by the request for closure, and increased RevPAR, and operating income also improved by JPY 920 million. Also, in September, we opened La Vista Kusatsu Hills, the second facility in Kusatsu area. As a result, net sales increased by 44% year-on-year to JPY 11.9 billion, and operating income was JPY -3.06 billion. The next slide shows KPIs for resorts business, the occupancy rate and the average daily rate by month. Products like the taxi plan and the local stay plan contributed to its recovery trend.
Our occupancy rates were higher than the industry average for resort hotels in Japan, indicated by a red dotted line, owing to a recovery in occupancy rates, particularly on weekends, as well as the high occupancy rates during the Golden Week holidays. The occupancy rate in September was sluggish. Same as Dormy Inn, but it started to rise in October, and it is expected to increase further from November onward. On the other hand, average daily rates in this first half were lower year-on-year due to the absence of Go To Travel campaign held in the same period of the previous fiscal year. As for the current occupancy rate, it is 76% as of November 20th. For Saturdays alone, the occupancy rate is 100%, and most facilities are fully booked, clearly demonstrating a strong demand for leisure.
Next is RevPAR, which is obtained by multiplying occupancy rate by average daily rate. RevPAR was generally on a recovery trend, as shown here, but in the second quarter, it was lower year-on-year due to sluggish growth in September and the absence of Go To Travel campaign held in the previous fiscal year. Now, let me explain the interest-bearing debt. The increase in interest-bearing debt from the end of the previous fiscal year is mainly caused by loans executed in this first half out of the JPY 62 billion commitment line provided under commitment- type syndicated loan agreement with 19 financial institutions. With decreased net assets resulting from the final loss in this first half, equity ratio decreased 0.8 percentage points from the previous fiscal year to 28.8%. Next is about dividends.
Our profit distribution is decided based on the ideas of returning profits to shareholders by linking dividend payments to business performance and earnings, and rewarding shareholders stably and steadily over the long term. In this first half, we posted a final loss, but we have decided to pay an interim dividend of JPY 10 per share based on a basic stance of stable dividend payment over the long term. Together with the estimated year-end dividend of JPY 10, the full- year dividend is forecasted as JPY 20 per share. Lastly, I would like to explain about the products we started selling in this fiscal year. The first one is Workplace Dormy. Office You Can Stay and Hotels You Can Live. This is a new product to meet the needs of various working styles triggered by the pandemic, such as remote work, workcation, et cetera.
The facilities are available from one week up to one year, and rooms are customized for different purposes. We offer coziness at home and services only available at hotels. Until October, 63 companies have used a total of 368 rooms. The other product is Shiki Club, a corporate employee benefit plan that offers our products at a discount. This is a membership program in which members can use all of our facilities, such as Kyoritsu Resorts, Dormy Inn, restaurants, dormitories, and senior residences throughout Japan at a special price of up to 50% discount. Until October, 64 companies with 47,485 people have enrolled in the program. This concludes my explanation on the financial results for the first half of the fiscal year ending March 2022. Next, Mr. Nakamura, President and CEO, will explain the earnings forecast for the fiscal year ending March 2022. Thank you.
Now let me explain our business forecast for the fiscal year ending March 2022, and our medium-term outlook. First is about our full- year forecast. As explained at the beginning of the presentation, we have revised the initial forecast announced at the beginning of this fiscal year. Regarding net sales, the dormitory business is expected to be generally in line with the forecast. However, considering the shortfall in the hotel business for the first half and the increase from the real estate sales and leaseback business, we revised the forecast to JPY 173 billion, which is an increase of 43% year-on-year.
Also, we revised operating income to JPY 2 billion, ordinary income to JPY 1.9 billion and net income to JPY 100 million. On the right, columns framed by a red line indicate the values to show our true capability, excluding the tentative factors of accounting treatment related to the COVID-19 pandemic and sales and leaseback of real estate. Column C shows the results of the previous fiscal year. In the previous fiscal year, the loss of JPY 2.8 billion in the hotel business due to temporary closure of hotels was reclassified to extraordinary loss. In this column, it is returned to the ordinary classification. Column D shows net sales of JPY 35.2 billion and operating income of JPY 7.3 billion, both forecasted for the real estate sales and leaseback business.
Excluding these extraordinary factors, estimated net sales increases by JPY 16.4 billion, and operating income improves by JPY 6.6 billion from the previous fiscal year. I want you to understand that these are the numbers of recovery in real terms expected for the current fiscal year. Capital investment has decreased by JPY 7.3 billion from the previous forecast, but this is due to the transfer of two properties subject to sales and leaseback from tangible fixed assets to real estate for sale earlier than originally planned. Therefore, the actual amount of capital investment has not been changed from the previous forecast.
This table shows revised quarterly operating profit forecast in the main segment. In the dormitory business, the entry of international students into Japan that we expected in the third quarter will be delayed to the fourth quarter due to delayed easing of travel restrictions. The latest information indicates restrictions for international students will be eased soon, and we expect the full- year operating income to be in line with our projection. Next, the hotel business, which consists of Dormy Inn and resort businesses. As we started this fiscal year, we were expecting a sharp recovery in and after the second quarter. That was not the case because the state of emergency and the quasi- emergency were extended through the end of September. As a result, we fell far short of our forecast in the first half.
The recovery phase was supposed to start in October with the lifting of most restrictions, but the Go To Travel campaign has yet to be restarted, contrary to our projection. We revised operating income downward, anticipating that occupancy rate and the average daily rate will not recover at the pace we anticipated in the third and fourth quarters. We've increased the sales and leaseback of real estate businesses from JPY 2 billion to JPY 7.3 billion in order to help ease the loss in the hotel business and ensure we return to profitability on the consolidated basis. Operating income in the segment Others is expected to increase by JPY 600 million in the fourth quarter. This is largely due to realization of unrealized profit of group companies ahead of the initial schedule as a result of increased sales and the leaseback of our properties.
Next, I will talk about the competitive advantage of Dormy Inn and Kyoritsu Resort businesses using RevPAR as a criterion. RevPAR is determined by multiplying the occupancy rate by average daily rate, or ADR. The chart shows RevPAR in January 2020 and onward compared against the national industry average. The red horizontal line indicates the RevPAR levels in the base year of 2019 before the pandemic started. The coronavirus pandemic became a social issue in January 2020. The state of emergency and the government's stay-at-home policy were in place from January to April of that year. During that time, RevPAR for Dormy Inn and Kyoritsu Resort plunged roughly by the same rate as the industry average amid the nosediving demand for accommodation. RevPAR for our facilities have outperformed the industry average by at least 20 points since May 2020, when the emergency declaration was lifted.
Particularly during the Go To Travel campaign period from July to December of that year, RevPAR for Kyoritsu Resorts had been from 40%-70% higher than industry average. All this goes to highlight our hotel's superiority over our competitors in the recovery phase and during economic stimulus campaigns. Clearly, people preferred our hotels over our competitors. The right end of the chart shows how our hotels will perform in October 2021 and onward. We made the estimate based on actual results of October and the reservations after that. As you see, Kyoritsu Resorts RevPAR is expected to recover pre-pandemic levels in November at the earliest. Dormy Inn is expected to achieve its break-even point and will be on track to a solid recovery. Next, I'll give you the status of November reservations to help you understand how the hotel business is recovering more in detail.
The red curve shows sales-based cumulative daily Dormy Inn reservations for November. Since October 1st, when major COVID restrictions were lifted, reservation numbers jumped. The blue dotted line is a forecast. It is expected to be above the break-even point for November, shown in the red horizontal line. This chart compares Kyoritsu Resort's reservations for November 2021 with those of pre-pandemic year of 2019 and the pandemic year of 2020. The red line shows November 2021 reservations. On September 30th, when the state of emergency was still in effect, the figure was far below those in November 2019 and 2020. Since October 1, when the emergency declaration was lifted, the daily reservations doubled. More recently, the pace of reservations has picked up and reached the similar levels to those during last year's Go To Travel campaign period.
Discounts for local residents in several prefectures, a recovery in the Okinawa region, and an expected restart of the Go To Travel campaign in January will serve as tailwind for us. We have been pressing ahead with an early recovery of Kyoritsu Resort business while taking every possible anti-infection measures. Next, let's take a look at how customers evaluate our hotel business. As you can see, surveys conducted by major hotel reservation website operators put several of our hotels in high ranks. We will further polish appeals of our products and services at our hotels. We will innovate our sales strategies in collaboration with online and physical travel agencies by making our reservation site more convenient, improving Shiki Club, our general corporate membership program, and updating our individual membership program. Our goal is to deliver our hotel's great services to more customers.
Two of our inns were listed in Japan Brand Collection 2021, Top 100 Inns and Hotels, published last March. They are Inazumi Hot Spring and Kotohira H ot Spring, Onyado Shikishimakan. Inazumi Hot Spring is a Japanese inn-style hotel that opened in November 2019 after renewal. The original hotel has been updated to modern specifications, but it still maintains the atmosphere of Inazumi Onsen Resort with a history spanning over 180 years. Kotohira Hot Spring Shikishimakan is essentially a reproduction of a Shikishimakan that was once designated as a nation's tangible cultural asset. It used construction materials of the original Shikishimakan to reproduce the atmosphere of the time-honoured Japanese inn. This slide shows the quarterly trend of Dormy Inn business and its key performance indicators or KPIs.
Our initial plan assumed a full freight recovery in the second quarter, but the lingering impact of the pandemic prevented us from achieving that in the second quarter. In our revised plan for the third and fourth quarters, we updated our forecast for the market and the competitive landscape and calculated revenue from revised occupancy rate and ADRs. We also revised our profit plan based on revised cost and SG&A. All of our hotels will develop their monthly targets based on the revised forecast for day-to-day management. They will use the target as a benchmark and take measures flexibly. In products and services, we will continue to promote Dormy Inn Nono series, signature rich buffet breakfast in large onsen spa facilities, and nighttime noodle serving, and high-end sauna that is increasing in popularity. We will offer these services with staff's wholehearted hospitality.
In sales, in collaboration with travel agencies, we will allocate a sizable portion of our resources to our own reservation system and corporate and individual members' programs. We plan to take measures to help bring back foreign travellers to Japan starting next fiscal year. Also, considering a slow recovery in business travel, our focus for the time being will be on the recovery of solid domestic business demand and the creation of new leisure demand. Business strategies will focus on access to new customers and the enthusiastic users who call themselves Dominista on the Internet and support Dormy Inn. We will endeavour to achieve business recovery, which is six months behind schedule. This slide shows quarterly data of key indicators for the resort business. Like Dormy Inn business, we have revised our forecast and have been tracking performance in the same manner.
After most COVID restrictions were lifted, we've seen a dramatic rebound in reservations because of long-time restrictions on people's movements and activities. It might take longer to turn around the Okinawa region, but we will do all we can to recover our performance as soon as possible. We believe government measures to stimulate demand will help. In doing so, we will make sure that we have adequate staffing and solid COVID precautions. We will aim for increasing weekday ADRs through Shiki Club, which started to seek membership this fiscal year. We will communicate appeals of Kyoritsu Resort to fans across the nation through traditional and social media. We are pleased to report that two facilities that opened during the current fiscal year, Noto Kaishu and La Vista Kusatsu Hills, are proving as popular as existing Kyoritsu Resort facilities.
Now, let me talk about net D/E ratio, which is one of the key financial indicators. Net D/E ratio indicates the ratio of net debt to net asset. Net debt is interest-bearing debts, such as borrowings and corporate bonds, minus cash and cash equivalents. Before the pandemic, we had run our finance with under one net D/E ratio, as we had aimed for. When the pandemic started, our net asset declined as we sustained losses. We had to raise funds to secure necessary working capital through a large amount of borrowings and other means. As a result, our interest-bearing debt expanded, and our net D/E ratio as of the end of September 2021 rose to 1.9 times. In the second half of this fiscal year, we plan to sell and lease back some of our first properties.
That is, to sell several hotels while maintaining the rights to operate those hotels as rental properties. Return on investment for these properties will be added to cash and cash equivalents. Our net D/E ratio is therefore expected to improve to 1.4 times by the end of the current fiscal year. In the next fiscal year and onward, we will work to increase our net assets through an early business turnaround and a better control over our interest-bearing debts to ensure healthy financial management. We will work to lower net D/E ratio to under one over the next several years. Next, I will talk about our market forecast for the hotel business, which is one of the core businesses along with dormitory business. I will also talk about a midterm forecast for our group's consolidated performance, including forecast for the hotel business.
This slide is compiled based on Japan's accommodation market forecast by a major research company. In other words, the slide shows scenarios for how demand for foreign visitors to Japan picks up. We have access to the data because we took part in the survey. Three scenarios presented here factor in recovery paths from the pandemic, the impact of Zoom meetings, and the opening and the closing of hotels and other factors. In the previous earnings briefing in May, we showed you the left half of this slide, which was the latest forecast at that time. The right half is an update in September that reflects the lingering impact of the pandemic and other changes since May. I highlighted changes by the blue circle. We downgraded this year's forecast and lowered the expected pace of recovery for the next fiscal year.
There is no major revision in the forecast for fiscal 2023 and onward. We expect our performance to reach the pre-pandemic 2019 levels in 2024 under the up optimistic scenario, in 2025 in the base scenario, and in 2026 in the down pessimistic scenario. That hasn't changed. This slide shows a scenario for a recovery of demand for domestic accommodations. Under the updated forecast, we downgraded figures for this fiscal year, but in the up scenario, the timing of recovery to the pre-pandemic levels was moved up to 2023, assuming that Japan will acquire herd immunity earlier than expected through vaccination rollouts. Under the down scenario, we anticipate a delay in acquiring herd immunity and the resulting slower recovery. This chart shows midterm prospects of our consolidated revenue and profit.
The left half are charts presented at the time of first half earnings release in May, and the right half is an update. The right half reflects revised full- year forecast. We have made no changes to the following four fiscal years due to low visibilities at this point. We are developing a qualitative and quantitative midterm plan over the next five years or so while monitoring the pandemic situation and its impact on our performance. We aim to release it early next fiscal year. The table shows a schedule for dormitory and hotel opening. Facilities currently under construction in line with the previous midterm plan are going to open in the year ending March 2023. We plan to gradually start construction for facilities that are due to open in the year ending March 2024 and later.
We will flexibly update the schedule, taking into account business environment, our financial condition, and the pace of recovery. Hotels in red letters are subjected to sales and the leaseback this fiscal year or later. Lastly, I will talk about our ESG initiatives. This slide shows initiatives in E, environment, and S, social areas. We will consciously implement these initiatives while considering their affinity with our businesses. This slide shows our initiatives in G, governance area. We stick to our stance of intensifying sustainability initiatives. We are in process of working out detail of these initiatives as part of next midterm plan, which is also under development. At the previous board meeting on September 29th, we adopted the resolution that our company shall select and apply for the Prime Market at the Tokyo Stock Exchange. The Prime Market is one of the exchange's new market categories.
We will continue to work to meet expectations of stockholders and maximize long-term shareholder return, and aim for prosperity in the long haul. This concludes my presentation. Taking this opportunity, I would like to seek your continuous support as we continue to endeavour to enhance our corporate value. Thank you very much for your kind attention.