Hello everyone. I'm Manabu Takaku from Kyoritsu 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 the medium-term forecast. First, a summary of financial result 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. 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 strategy 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 JPY 9 billion and net loss of JPY 12.1 billion. The second item is cost reduction and new product planning and development to counter COVID-19.
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 Subsidy. 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 JPY 40 billion to help stabilize our financial health. We have also secured a JPY 62 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 JPY 20 per share, including an interim dividend of JPY 10.
First, the consolidated results for the year that ended in March 2021. Net sales fell by 28.6% year- on- year to JPY 121.2 billion. Operating loss was JPY 9 billion. 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 April 7th, 2020. Occupancy rates of hotels quickly plunged. 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. 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 JPY -12.1 billion. 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 Cabin. Other business indicators are shown on the slide. This slide shows differences between full-year 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 put a damper on hotel occupancy rates. As a result, ordinary income fell short of the forecast by JPY 500 million.
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 a hefty JPY 2.8 billion in the quarter and by JPY 3.3 billion full- year. We recognized JPY 1.7 billion in extraordinary expense, which was not factored in in the forecast. As a strategic initiative towards our business recovery in the 43rd period, we opened two dormitories and seven hotels in the fourth quarter. Furthermore, we recognized JPY 900 million as the 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 6.1 billion 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 JPY 800 million in profit from real estate asset liquidation the previous year, but had none this fiscal year.
I will later touch upon the plan for this segment when we talk about the forecast. We are steadily improving the 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. Dormy Inn 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. After the emergency was lifted in May last year, 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 with 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. It is taking time for international students to start coming back to Japan.
Against this backdrop, we saw revenue increase by JPY 1.21 billion, thanks to an addition of 15 dorm buildings and 1,181 rooms. That was more than offset by a revenue decrease of JPY 4.35 billion due to the pandemic. As a result, net sales for the year were down by 7.6% to JPY 46.48 billion. Operating income fell by JPY 3.27 billion, along with the pandemic-caused drops in occupancy rates and sales. Despite rent discounts offered by many property owners amounting to JPY 220 million, operating income dropped by 38.9% from the previous year to JPY 4.9 billion. 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 38,898, a drop of 1,191 from the previous year. The starting occupancy rate was 93.7%.
International dormitory students were 613 fewer at 2,466 in the beginning of Fiscal 2020. Demand for company dormitories did not reach a full-fledged recovery, even though some companies did hold training 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 companies' new hires. Next, the Dormy Inn business. As you can see, the pandemic was the largest factor for lower sales and low profit in Fiscal 2020. The pandemic shed JPY 24 billion and JPY 20 million from our sales and pushed down operating income by JPY 14.32 billion. There was an extraordinary expense of JPY 850 million for facility opening, which did not exist in the previous year.
Yet we were able to cut costs by JPY 960 million, partly thanks to rent discounts offered by property owners. As a result, net sales dropped 45.6% to JPY 25 billion and JPY 40 million. Operating loss was JPY 9.14 billion. To turn the pandemic into a business opportunity, we have planned and developed a Workplace Dormy. This new initiative offers long-stay offices and hotels for teleworkers, which are equipped with hot springs, infrastructure for teleworking, and meal services. Next, I will describe Dormy Inn 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 plans 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. 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 Dormy Inn 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.
Dormy Inn occupancy rates are in sync with those for business hotels in their response to various factors, including the state of emergency. Dormy Inn occupancy rates have consistently outperformed. This goes to show that Dormy Inns 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 the previous year when the impact of the pandemic was setting in. In the resort business, like the Dormy Inn business, the pandemic was the largest factor for lower net sales and lower operating income. The impact of the pandemic slashed JPY 13.66 billion from the net sales and JPY 4.78 billion from operating income.
We were able to save costs amounting to JPY 917 million, thanks in part to rent discounts by cooperative property owners. As a result, net sales came to JPY 21.22 billion, down 35.6%. Operating income also fell by JPY 3.57 billion to JPY -3.98 billion. In fiscal 2020, we developed and began marketing new products such as Chokko Ofuku Plan, which includes round-trip taxi transportation between their homes and hotels, and local stay plans that only use local accommodations. Now, I'll talk about the resort business's occupancy rates and ADR. They are the KPIs for this business. Like Dormy Inn 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. They fell 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 JPY 46,600, up JPY 3,900 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 the industry average in their response to various factors, including the state of emergency. 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'll explain the measures we have taken and new products to address the COVID-19 situation. First, regarding measures to prevent spreading COVID-19 infection, we took thorough measures such as implementing photocatalytic 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 residence business offices, we could reduce rent by about JPY 2.2 billion 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 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 resorts business, in addition to Chokko Ofuku Plan with round-trip taxi transportation, we developed a new local stay plan, which is offered for local residents only, and a social distancing safety plan to minimize contact between customers. Going forward, we'll further promote the development and sales of new products such as Workplace Dormy, 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-19, and since the future still remains uncertain, we have secured business funds for three fiscal years, including the current fiscal year under review. First, in June, we raised JPY 10 billion from the Development Bank of Japan to address the COVID-19 situation, and then in January, we issued JPY 30 billion Euro-yen CBs to secure funds for the redemption of approximately JPY 20 billion of our fourth domestic CB, which matured in March. At the same time, considering the financial safety to cope with the uncertain outlook of COVID-19, we entered into a committed syndicated loan agreement with 19 financial institutions and secured a line of credit of JPY 62 billion, and about JPY 25 billion of it was exercised. As a result, interest-bearing debt increased by JPY 36.6 billion, 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 JPY 70.7 billion due to the deficit caused by COVID-19. As explained in the previous slide, net D/E ratio was 1.5x 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 the net D/E ratio back to below 1x , as we advocate it as a healthy level. Lastly, I'll explain about the dividends. Our 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 JPY 10, and together with the interim dividend, the annual dividend will be JPY 20. This concludes my explanation of the financial results for the fiscal year ended March 2021. Next, President Nakamura will explain the projected consolidated financial results for the fiscal year ending March 2022 and the medium-term outlook.
Thank you. I am Nakamura, and I assumed the position of President this April. I would like to explain our business forecast for the current fiscal year and our 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 JPY 174.5 billion, 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 JPY 20 billion from the real estate sale and leaseback business. Also, we will strive for a steady return to profitability, with operating income of JPY 4 billion, ordinary income of JPY 3.4 billion, and net income of JPY 1.6 billion. 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 mid-term 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 JPY 20 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-19, and the previous fiscal year, which was severely impacted by COVID-19. In the dormitory business, the current fiscal year started with the occupancy rate of 92%, a slight decrease from the previous fiscal year.
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 JPY 2 billion 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'd 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, Dormy Inn, and resorts businesses to compare the results of the fiscal year ended March 2020 with only minimal impact of COVID-19, 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-19 impact mainly on contracts with international students and employee dormitories, the occupancy rate is estimated to decrease from 98%- 92%. This will increase the ratio of property cost to sales and lead to downward pressure on the profit margin. In the next fiscal year onward, when we start recovery from the impact of COVID-19, we expect the occupancy rate will increase and the profit margin recovery will follow.
Next is Dormy 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 the 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 resorts, 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-19 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 our 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 student contracts in Q3. 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-19. This will increase the total number of contracted rooms and dormitory fee sales, and that is why we forecast a 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-19.
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 Dormy 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 Dormy Inn.
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&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 Dormy Inn, we expect a full-fledged recovery will start in Q2. Performance management is also the same. This is a list of dormitories and hotels by 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 projects subject to sale and leaseback after the current fiscal year. Lastly, I'd 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. 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-19, 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 our medium-term outlook for sales and profit. They mainly reflect the outlook for the dormitory and hotel businesses, we use the following assumption. The occupancy rate of the dormitory business will recover to the pre-COVID level in the next fiscal year. 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 pre-COVID level in the fiscal year ending March 2024, and it would become possible to achieve operating income of JPY 19 billion 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. I appreciate your continuous support and guidance. That is all from me. Thank you for watching.