Hello, everyone. I'm Manabe Takaku from Kurezu Maintenance. Thank you so much for watching online briefing on our earnings report for the fiscal year that ended in March 2021. We wish we could see you in person at the briefing as usual, but I had to hold it virtually as a precaution against the coronavirus outbreak. Anyway, it is my pleasure to talk to you.
I will first give you a summary of financial results for the fiscal year that ended in March 2021. President Koji Nakamura will then take over and talk about projected consolidated financial result for the fiscal year ending in March 2022 and medium term forecast. First, a summary of financial results for the fiscal year that ended in March 2021. These are the financial highlights. First, we reported losses due to the considerable impact of the pandemic.
We were expecting a rebound in the second half based on the upward trend at the time when we reported to you the results of the first half of the year at a briefing. But we saw our revenue plummet because of the suspension of the government's go to travel campaign and the second state of emergency in January. We also reported additional costs including the cost of the strategic investments such as opening of dormitories and hotels with an eye on recovery in the next period and the cost related to a committed syndicated loan agreement. As a result, we reported operating loss of billion and net loss of billion. The second item is cost reduction and new products planning and development to counter COVID-nineteen.
To reduce our costs, we asked the owners of dormitories, hotels and elderly facilities to lower rents and many of them kindly responded to our call. We also took advantage of the government's relief measures such as the employment adjustment subsidies. We have actively engaged in product planning and development that helps us get through the pandemic. I will later lay out specific measures. The third point is securing fund for running business for the three periods including the current period under review and our dividend policy.
We have raised billion to help stabilize our financial health. We have also secured a billion credit line through a committed syndicated loan with 19 financial institutions. Even though we reported net loss for the past fiscal year, we plan to pay out an annual dividend of per share, including an interim dividend of First, the consolidated results for the year that ended in March 2021. Net sales fell by 28.6% year on year to 121,200,000,000. Operating loss was 9,000,000,000 yen.
As I said earlier, it's been a tough year under the impact of the pandemic. The government issued the first state of emergency on 04/07/2020. Occupancy rates of hotels quickly plunged. But after voluntary restrictions were eased, our repeat customer returned. Other tourists took advantage of the Go to Travel campaign.
The development of new products designed to fight infections also helped occupancy rates recover. Operating income in both the second and third quarters were in black ink. But the suspension of travel campaign last December coupled with the second state of emergency issued in January made the hotel occupancy rates tumble again. In addition, increased cost of strategic investment in new dormitories and hotels as well as the cost of signing a committed syndicated loan pushed operating income into negative territory again in the fourth quarter. Net income was minus JPY 12,100,000,000.0.
This is due to extraordinary losses from temporary shutdown of some of our hotels and restaurants and closure of our Korean office and the global cabins. Other business indicators are shown on the slide. This slide shows differences between Fluor operating income forecast we announced at the briefing on the first half result and the actual. In the third quarter, the go to travel campaign was suspended in December. That puts a damper on hotel occupancy rates.
As a result, ordinary income fell short of the forecast by 500,000,000 yen. In the fourth quarter, the issuance in January of the second state of emergency was an additional blow to hotel occupancy rates. The actual business operation was short of the forecast by hefty billion in the quarter and by billion full year. We recognized billion in extraordinary expense, which was not factored in in the forecast. As a strategic initiative towards our business recovery in the forty third period, we opened two dormitories and seven hotels in the fourth quarter.
Furthermore, we recognized million as a cost of signing a committed syndicated loan agreement to secure working capital for the three periods including the current period under review. For these reasons, the actual ordinary income was JPY 6,100,000,000.0 short of the forecast and we could not meet the full year forecast. This slide shows net sales and operating income by segment in comparison with those in the previous year. As you can see, the negative impact of the pandemic is pronounced in the hotel business. I will later give you details of the dormitory and hotel businesses.
In other segments, a drop in the comprehensive building management business is attributable to the pandemic. Lower hotel occupancy rates, a decline in cleaning demand due to temporary closure of hotels and decreased hotel renovation work all contributed. The food business also suffered from the pandemic. A surge in case numbers led to the lower utilization of hotel restaurants, a suspension of operations or shorter business hours for restaurants. In the Development segment, we marked about million in profit from real estate asset liquidation the previous year, but had none this fiscal year.
I will later touch upon a plan for this segment when we talk about the forecast. We are steadily improving profitability of what we regard as a business we intend to grow, PKP operation and Senior Life operation divisions. This slide shows quarterly net sales and operating income by main business segment. Domee in operation and resort operation have been drivers for growth for us over the past several years. Operating income in these segments were deeply in red in the first quarter due to the first state of emergency.
But after the emergency was lifted in May, their businesses returned to a path for recovery in the second and third quarters helped by the go to travel campaign. In particular, the resort operation roared back and began generating profit again. In the fourth quarter, however, a suspension of the travel campaign, the second state of emergency in January and the cost of new openings led to significant losses in both segments. I will describe details of the dormitory and hotel businesses in the next slide. The dormitory business was affected by the coronavirus the past fiscal year.
International students have delayed their visit to Japan. There was less demand for training programs for the company's new hires. The dorm occupancy rates at the start of fiscal year was at 93.7%, five points lower than the previous year. We introduced an interest free loan to help students pay their dorm expenses amid the pandemic. Many dorm residents took advantage of the program, But it is taking time for international students to start coming back to Japan.
Against this backdrop, we saw revenue increase by billion, thanks to an addition of 15 dome buildings and eleven eighty one rooms. But that was more than offset by a revenue decrease of billion due to the pandemic. As a result, net sales for the year were down by 7.6% to billion. Operating income fell by $27,000,000,000 yen along with the pandemic caused drops in occupancy rates and sales. Despite rent discounts offered by many property owners amounting to $220,000,000 yen operating income dropped by 38.9% from the previous year to 4,900,000,000.
This slide shows the starting number of contracts and starting occupancy rates, which are the key performance indicators for the dormitory business. The starting number of contracts in April 2020 was SUDI8-eight 98, a drop of eleven ninety one from the previous year. The starting occupancy rate was 93.7%. International dormitory students were six thirteen fewer at 2,466 in the beginning of fiscal twenty twenty. Demand for company dormitories did not reach a full fledged recovery, even though some companies did hold trading programs for new recruits by holding them in different periods than usual.
The starting occupancy rate this April was 92.1%. It is still affected by a delay in the return of international students and fewer training sessions for company's new hires. Next, the domain in business. As you can see, the pandemic was the largest factor for low sales and low profit in fiscal twenty twenty. The pandemic shed JPY 24,020,000,000 from our sales and pushed down operating income by JPY 14,320,000,000.00.
There was an extraordinary expense of $850,000,000 yen for facility opening, which did not exist in the previous year. Yet, we were able to cut costs by $960,000,000 yen partly thanks to rent discounts offered by property owners. As a result, net sales dropped 45.6% to 25,000,000,000 yen and 40,000,000 yen Operating loss was JPY 9,140,000,000.00. To turn the pandemic into a business opportunity, we have planned and developed Workplace Dormy. This new initiative offers long stay offices and hotels for teleworkers, which are equipped with hot spring infrastructure for teleworking and meal services.
Next, I will describe Domi Inc. Occupancy rates and the average daily rate or ADRs. They are the KPIs for this business. This slide shows month by month occupancy rates and ADRs for the business. Occupancy rates hit the bottom in April and May around the time when the first state of emergency was issued.
They turned around in June, thanks to local plants and other products designed to stimulate domestic leisure demand. In October and November, they recovered to over 80% as the go to travel campaign offset a loss of inbound travelers to Japan. But occupancy rate plummeted again with the suspension of the Go to Travel campaign in December and the state of emergency declaration in January. It rebounded in February and continued to recover to the level that exceed levels not seen in the previous year when the pandemic began taking a toll. ADR stayed lower than the previous year throughout the year as overall demand for the dome in facilities dropped by a loss of inbound travelers.
The Osaka area saw the sharpest drop of 45% since it heavily relies on inbound travelers. The red dotted line shows the average occupancy rate for business hotels in Japan released by the Japan Tourism Agency. Domain in occupancy rates are in sync with those for business hotels in their response to various factors, including the state of emergency. But Domee Inc occupancy rates have consistently outperformed. This goes to show that Domee Inc remain the first choice for repeat and many other customers even during the pandemic.
RevPAR is calculated by multiplying the occupancy rate with the ADR. The chart plots monthly RevPAR numbers. The figure in March rose from the same month previous year when the impact of the pandemic was setting in. In the result business, like the Domi Inn business, the pandemic was the largest factor for lower net sales and lower operating income. The impact of the pandemic slashed JPY 13,660,000,000.00 from the net sales and JPY 4,780,000,000.00 from operating income.
We were able to save costs amounting to JPY $917,000,000,000, thanks in part to rent discounts by cooperative property owners. As a result, net sales came to JPY 21,220,000,000.00, down 35.6%. Operating income also fell by billion to minus billion. In fiscal twenty twenty, we developed and began marketing new products such as Chokko Okubin plan, which includes round trip taxi transportation between their homes and hotels and local state plans that only use local accommodations. Now I'll talk about resort businesses occupancy rates and ADR.
They are the KPIs for this business. Like Domi in business, occupancy rates hit the bottom in April and May around the time when the first state of emergency was declared. They turned around in June, thanks to the taxi plan and new plans limited to local accommodations. In October and November, occupancy rates topped the pre pandemic levels helped by the Go to Travel campaign. But they failed again when the Go to Travel campaign was suspended in December due to a spike in cases and the second state of emergency issued in January.
We have been working to raise ADRs without compromising the current level of customer satisfaction. Except for the first quarter when some facilities had to temporarily stop operations due to the emergency declaration, ADRs kept rising and eventually rose to up from the previous year. The red dotted line shows the average occupancy rate of resort hotels released by the Japan Tourism Agency. Our resort hotel occupancy rates are in sync with those who are industry average in their response to various factors, including the state of emergency, but our resort hotel occupancy rates have consistently outperformed. This goes to show our resort hotels remain the first choice for repeat and many other customers even during the pandemic.
The chart shows monthly RevPARs. It saw year on year growth from September to November, thanks in part to the Go to Travel campaign.
Next, I will explain the measures we have taken and new products to address COVID nineteen situation. First, regarding measures to prevent spreading COVID nineteen infection, we took thorough measures such as implementing photo catalytic coating and reducing contact with customers in addition to temperature check and disinfection in the office. In terms of costs, we contained variable costs by temporary closure of facilities and shorter business hours. And with the cooperation of owners of dormitories, hotels and senior residents business offices, we could reduce rent by about 2,200,000,000.0 yen per year. We also utilized public assistance programs such as employment adjustment subsidies.
In relation to new products, we focused on product development as well to address the pandemic. First, in the dormitory business, as a financial support measures for dormitory students, we introduced novel coronavirus schooling support program to provide interest free loans for dormitory fees, and many dormitory students have used this program. In the results business, in addition to Choco Of Kubin plan with round trip taxi transportation, we developed new local state plan, which is offered for local residents only and social distancing safety plan to minimize contact between customers. Going forward, we'll further promote development and sales of new products such as workplace dormi, a new product for remote workers and long term stay and Shiki Club, an employment benefit plan which offers stay at a discount. Next, let me explain the balance sheet.
For this fiscal year under review, there was a significant financial impact from fundraising. So my explanation will focus on fundraising. Earnings deteriorated significantly in this fiscal year due to COVID-nineteen. And since the future still remains uncertain, we have secured business funds for three fiscal years, including the current fiscal year and the review. First in June, we raised 10,000,000,000 yen from the situation.
And then in January, we issued 30,000,000,000 yen euro yen CDs to secure funds for the redemption of approximately 20,000,000,000 yen of our fourth domestic CB, which matured in March. At the same time, considering the financial safety to cope with uncertain outlook of COVID nineteen, we entered into a committed syndicated loan agreement with nineteen financial institutions and secured a line of credit of 62,000,000,000 yen and about 25,000,000,000 yen of it was exercised. As a result, interest bearing debt increased by 36,600,000,000.0 yen including scheduled repayments. The equity ratio decreased by 9.1 percentage points from the previous fiscal year to 29.6% and net assets amounted to 70,700,000,000.0 yen due to the deficit caused by COVID-nineteen. As explained in the previous slide, net DE ratio was 1.5 times due to an increase in interest bearing debts.
From now on, we will strive for an early recovery in business performance and reduction of interest bearing debts in order to get net DE ratio back to below one time as we advocated as a healthy level. Lastly, I'll explain about the dividends. Profit distribution decisions are based on the perspective of returning profits to shareholders by linking dividend payment to business performance and earnings and the basic stance of rewarding shareholders in a stable and steady manner over the long term. For the fiscal year under review, we posted a loss due to the pandemic. But in accordance with our basic stance, we plan to pay a year end dividend of 10 yen.
And together with the interim dividend, annual dividend will be 20 yen. This concludes my explanation of the financial results for the fiscal year ended March 2021. Next, President Nakamura will explain projected consolidated financial results for the fiscal year ending March 2022 and medium term outlook. Thank you. I am Nakamura, and I assume the position of President in this April.
I would like to explain our business forecast for the current fiscal year and a medium term outlook for the market and business performance. First, let me explain the business forecast. For the current fiscal year, we are planning a 43% year on year increase in net sales to 174,500,000,000.0 yen with the dormitory business, which will maintain the same level as the previous fiscal year and the hotel business, which is expected to recover from Q2 as well as billion from the real estate sale and leaseback business. Also, we'll strive for a steady return to profitability with operating income of billion, ordinary income of JPY 3,400,000,000.0 and net income of JPY 1,600,000,000.0. The assumptions for the sales plan and the level of profit recovery and its factors will be explained later.
Regarding capital investment, while we plan payment for the construction of hotels and other facilities started in the previous midterm plan, which is currently being reviewed, we will start recovering our investment through real estate sale and leaseback for the second half of this fiscal year. We plan to pay a dividend of per share, the same amount as the previous fiscal year based on a policy of long term and stable shareholder returns. Next, I will explain the forecast for each business segment by comparing the results of two fiscal years. That is the fiscal year ended March 2020, which was less affected by COVID nineteen and the previous fiscal year, which was severely impacted by COVID-nineteen. In the dormitory business, the current fiscal year started with the occupancy rate of 92%, a slight decrease from the previous fiscal year.
But we will maintain a slight increase year on year by curbing the number of people leaving dormitories, new contracts and cost reduction for recovery of the occupancy rate at the beginning of the term and a profit to pre COVID level. In the hotel business, we expect sales will recover from Q2, but it is estimated to take some time to recover the profit level. I will elaborate on this later. In the development business, we anticipate a profit of 2,000,000,000 yen from the resumption of real estate sale and leaseback, which we had been working on until fiscal year ended March 2020. In others, we factor in the deficit from the new facility opening in the senior business.
Now, I would like to explain the reasons why it would take time for profit level recovery. The table on this page gives a rough idea of revenue and expenditure structures for dormitory, domi in and resorts businesses to compare the results of the fiscal year ended March 2020 with only minimal impact of COVID nineteen with the forecast for the current fiscal year, which will be in the process of recovery. First, in the dormitory business, property costs, which are fixed costs indicated as rent and repayment costs here are larger than other two businesses. Due to COVID-nineteen impact mainly on contracts with international students and employee dormitories, the occupancy rate is estimated to decrease from ninety eight percent to ninety two percent. This will increase the ratio of property cost to sales and lead to downward pressure on the profit margin.
And the next fiscal year onward, when we start recovery from the impact of COVID-nineteen, we expect the occupancy rate will increase and the profit margin recovery will follow. Next is Domi Inn. RevPAR is an index that multiplies unit price and occupancy rate and recovery of room rates is the key to profit margin recovery. As explained in the summary of financial results, considering our comparative advantage with other business hotel chains, we anticipate that the recovery of occupancy rates will come first in the process of recovery in the business hotel market. And the recovery of unit prices is expected to be significantly affected by the number of rooms supplied and recovery of absolute demand for accommodation, especially the pace of recovery of inbound tourist demand, which accounted for 20% of the entire market at its peak.
We expect this recovery will be gradual toward 2025 based on a conservative view. On the other hand, our results which have focused on domestic demand are expected to see a recovery and increase in room rates and RevPAR due to the return to domestic leisure activities affected by COVID nineteen and economic stimulus measures such as go to travel campaign. However, as our sales structure takes three to four years from a new hotel opening to achieving profitability, we expect gradual improvement of the profit level by the profit recovery in existing hotels and the gradual turnaround of hotels newly opened in the past few years. Next, I'd like to explain estimate for quarterly changes in operating income for our major segments. First, in the dormitory business, while we expect a slight year on year decrease in operating income for Q1 and Q2 due to a slight decline in the initial occupancy rate and in the number of contracts from the previous fiscal year, we factor in the resumption of international students contracts in Q3.
And in Q4, we expect an increase in the initial occupancy rate for the next fiscal year due to an increase in the capacity of new facilities to be opened in the next fiscal year as well as a recovery from the impact of COVID-nineteen. This will increase the total number of contracted rooms and dormitory fee sales, and that is why we forecast profit increase. Regarding the hotel business, in the previous fiscal year, measures to curb the flow of people by the declaration of a state of emergency in Q1 and Q4 led to a significant decrease in demand for accommodations for both business and leisure. This was a major factor for the decline in revenues and profits. In the current fiscal year, however, while we factor in a certain level of decline in Q1 in light of the current situation, we expect a recovery from Q2 onward as well as a significant recovery in profit even considering the opening costs of hotels, which delayed their opening for one year by negotiating with their owners to cope with the COVID nineteen.
Also, we have started to resume the real estate sale and leaseback business in order to absorb the burden of the deficit from new facility opening in the hotel business and steadily restore the profitability of the entire group on a consolidated basis. Items in others differ from the previous fiscal year and this is due to opening costs in the senior business, consumption taxes, performance bonus and elimination of intra company transactions associated with the real estate sale and leaseback. The table on this page shows the profit forecast for the current fiscal year for the hotel business. Quarterly changes are broken down into Domi Inn and Resorts, and each of them are further broken down into existing facilities and newly opened facilities. The plan is to bring all of the existing hotels back into the black.
The next slide shows the quarterly changes of key indicators for Doming In. We are set to begin a full fledged recovery in Q2. Sales are composed of the occupancy rate and unit price, which are set to reflect the outlook of the business environment such as market and competitive trends. This is equal to RevPAR and each cost and SG and A expense are calculated to set profit targets. In practice, we'll further break down this to monthly numbers for each hotel and use this index as a benchmark to manage performance and take flexible measures.
This slide shows the quarterly trends of key indicators for the resorts business. Same as Domee In, we expect a full fledged recovery will start in Q2. Performance management is also the same. This is a list of dormitories and hotels with the timing of openings. And facilities under construction according to the previous medium term plan will open in the fiscal year ending March 2023.
In addition, while we start working on the projects planned for opening in fiscal year ending March 2024 or later, we intend to be flexible in line with the pace of recovery as we consider the business environment and financial conditions. The hotels in red indicate the project subject to sale and leaseback after the current fiscal year. Lastly, I would like to explain the market outlook for hotels, which has a major impact on us and the medium term outlook for the consolidated performance of the group. This slide shows a forecast of the hotel accommodation market in Japan based on research by a major research organization. The graph on the left shows the number of international travelers to Japan or inbound tourists.
And the graph on the right shows the demand recovery scenario for Japanese guests. Our company cooperated with the survey and has received the result. Here, we present three scenarios by incorporating factors such as a recovery story from COVID-nineteen, the impact of things like Zoom meetings on business travel demand and opening and closing of hotels. In all cases, our assumption is that the recovery will start in 2022 and return to the pre COVID level of 2019 is in 2024 under the up scenario, 2025 under the base scenario and 2026 under the down scenario. These graphs show medium term outlook for sales and a profit.
They mainly reflect the outlook for the dormitory and hotel businesses. And we use following assumption. The occupancy rate of the dormitory business will recover to the pre COVID level in the next fiscal year. And for the hotel business, RevPAR will gradually recover to the pre COVID level from 2024 to 2026. And the number of rooms will increase in accordance with the development plan.
Based on this assumption, we expect the profit will recover almost to the peak COVID level in the fiscal year ending March 2024. And it would become possible to achieve operating income of JPY 19,000,000,000 from the fiscal year ending March 2025 to the fiscal year ending March 2026. This is a target we strived for in the previous medium term plan. As for the new medium term management plan, we'll formulate a quantitative and qualitative plan for about five years by the beginning of the next fiscal year after confirming stable business environment with the end of the pandemic. We'll continue to work actively to secure the human resources necessary for our business, improve our corporate recognition and brand power and implement ESG initiatives such as corporate governance as described in the following pages.
And I appreciate your continuous support and guidance.