Good morning, everyone. I am Ueda, president of Kioritsu maintenance. Thank you very much for participating briefing. Despite your busy schedule and turmoil related to COVID-nineteen. Today, we limit participants to keep social distancing and I appreciate your kind cooperation.
Now I'd like to start my explanation on the overview of our financial results. Please turn to page one. The presentation starts with consolidated financial results for six months period ended 09/30/2020 followed by projected results for fiscal year ending March 2021. And finally, I will talk about medium term management plan. First, let me explain the executive summary.
The situation was totally different between Q1 and Q2. Dormitory business segment was directly affected by COVID-nineteen and its occupancy ratio at the beginning of this fiscal year was 93.7% due to postponed arrival of international students. In hotel business segment, occupancy ratio sharply dropped in April and May due to decreased inbound tourists and restrained business and leisure travel caused by the request to stay home. And as a result, we recorded deficit for Q1 for the first time since listing. However, in June, we started to make a recovery and occupancy ratio of our hotels continued to rise, mainly driven by go to travel campaign and development of new unique products to address COVID-nineteen situation.
Especially in resort business, RevPAR of existing facilities has been higher than the previous year and returned profitable in this Q2. At the same time, we recorded extraordinary loss due to closure of a hotel in South Korea, which had been in the red as well as compact hotels named Global Cabin. This is to enhance our strength further for future growth. As such, business recovery trend is obvious. However, considering COVID-nineteen impact going forward, we set our full year forecast as JPY132 billion for net sales and JPY3 billion for operating loss.
Interim dividend is JPY 10 per share based on a basic principle to repay our shareholders stably and steadily over the long term, even at time of COVID-nineteen. Annual dividend is undecided at this moment. Next is about consolidated financial results. First half actual results are provided in the middle of the slide. Net sales were down 40% year on year to JPY 56,200,000,000.0 and operating loss was JPY 4,400,000,000.0.
Now please look at the rightmost columns for breakdown between Q1 and Q2 results. As I said earlier, by quarter basis, both operating income and ordinary income turned into the black with JPY 34,000,000 and JPY $318,000,000, respectively, from the loss in the first quarter. This indicates steady progress toward recovery. Net income was minus JPY 6,400,000,000.0 in the first quarter and minus JPY 1,400,000,000.0 in the second quarter. And this is due to the earlier mentioned extraordinary loss recorded as a result of business review for future growth.
This includes the closure of a hotel in South Korea for the loss of JPY 1,470,000,000.00 as well as closure of global cabin developed mainly for inbound tourists. This slide shows year on year comparison of sales and operating income by segment. You can tell that hotel business boxed by a red line has a large effect. It is especially important that resort business has moved back into the black in Q2. I will elaborate more on this later.
This slide is about dormitory business. Occupancy rate was 93.7% at the beginning of this fiscal year affected by COVID-nineteen in net sales, while we had a positive effect of JPY $610,000,000 by opening eleven eighty one rooms in 15 facilities. Decreased occupancy rate due to COVID-nineteen posed negative impact of JPY 1,830,000,000 And the total net sales were down 6.8% year on year to JPY 450,023,000. We implemented cost control measures, including rent reduction of JPY 60,000,000 with cooperation by owners. However, due to negative impact of JPY 1,190,000,000.00 caused by COVID-nineteen, operating income was JPY 2,740,000,000.00, down 28.6% year on year.
Regarding occupancy rate of dormitories, as I mentioned earlier, it was 93.7% at the beginning of this fiscal year. Breakdown of the decrease of leased units is as follows: four seventy two for dormitories for students and eight sixty one for dormitories for employees. But dough mill increased by 142 units. In total, the number of units was down eleven ninety one year on year to 38,898. This led to the declined occupancy rate.
The total number of contracted international students was down six thirteen or 11.8% year on year to 2,466. Next is about Domi Inn business. And its net sales decreased by 60.2% year on year to JPY 10,050,000,000. Operating loss was JPY 5,100,000,000.0. Negative impact of COVID-nineteen on net sales was JPY 740,000,016,000 and JPY 10,300,000,000.0 for operating income.
But if we exclude this negative impact, we would have maintained year on year growth by positive effect from new facilities opened in the previous fiscal year and cost reduction effect. Next slide covers an important topic in this financial result briefing. This graph shows recent trend of occupancy rate. Affected by COVID-nineteen, it started to fall in February of the previous fiscal year, and it further dropped from 30.66% in April to 27.2% in May to hit the bottom as shown here. Then it made a rapid recovery in June.
In August, occupancy ratio declined temporarily as the number of COVID-nineteen cases increased. However, by successful sales promotion of new products like limited offer for local residents, occupancy ratio in September improved to 76.8% and the recovery trend continues. It has risen to 81.8% as a preliminary figure for October, and this growth continues in November. Looking into numbers by area, while recovery is taking some time in major cities such as Tokyo and Osaka, where the proportion of inbound tourists had been originally high, both cities are on a track to recovery. Osaka was most severely hit by the pandemic, and its occupancy ratio dropped from 94.3% to 35.5%, but it recovered to 60% level in October.
Now Tokyo has recovered to 70% level. Average daily rate increased from 6,100 yen in Q1 to 7,900 yen in Q2. We will strive for recovery of the occupancy ratio early as we develop new products like long stay plans for remote work and for COVID-nineteen measures and for raising average daily rate. For your reference, the rate increased to 8,600 yen in October and this momentum continues in November. These results led to RevPAR shown on the next page.
Rapid recovery since June and a steady increase of average daily rate led to RevPAR of JPY 5,500 in Q2. Although this number is a decrease of 47% year on year, it was a significant improvement from JPY 2,600 in Q1. It continued to improve to JPY 7,000 in October and this trend continues in November. On this page, I'd like to review the impact of inbound tourists in terms of monthly trend of the number of guests of DOMEI Inn. The blue part of this bar chart indicates the number of inbound guests in the previous fiscal year, and they have almost gone in this fiscal year due to COVID-nineteen.
On the other hand, while the number of domestic guests significantly decreased in April and May, it recovered in June to the same level of the previous year. And since then, it has continuously higher than the previous year except for August when the COVID-nineteen cases increased. Although it is a preliminary figure, in October, it has become ninety thousand higher year on year. And this means about half of the lost 180,000 inbound tourist demand is covered by domestic guests. We'll continue to plan and promote hotel stay plans for domestic guests to cover the decrease of inbound guests.
Next is about resort business. Allow me to imagine, without the impact of COVID-nineteen, we could have recorded increased sales and profit due to positive effect from new facilities opened in the previous fiscal year and cost reduction effect. However, net sales were down 51.9% year on year to JPY 360,008,000 due to COVID-nineteen and we recognized operating loss of JPY 1,640,000,000. Having said that, resort business is driving a recovery of hotel business segment mainly driven by go to travel campaign and new product development. And as I explained on Page five, the quarterly result of result business in Q2 has moved back to the black with operating income of JPY $310,000,000.
It is reported that some areas like Sapporo and Osaka would be eliminated from GoToTravel campaign due to COVID-nineteen. But as we have only Domi Inn and have no resort facilities in those two cities, we expect resort business will continue to recover. This slide shows the trend of occupancy rate for resort business, which is a key point in this briefing. Same as Domi Inn business, it dropped significantly in April and May, turned to increase in June, and now it is making a rapid recovery. I'd like to have your attention to average daily rate provided at lower rate as a result of national and local government measures, including GoToTravel campaign started in late July and successful sales of new products to address COVID nineteen situation, like hotel stay plans with transportation service by taxi, average daily rate in Q2 was higher than the previous year.
The rate in October was 4,000 yen higher year on year, and this trend continues in November. It was not easy to raise average daily rate in resort business so far, but a decision to switch to a policy to increase the rate has produced a positive effect. As a result, RevPAR recovered significantly. RevPAR in September was JPY 34,400 to become higher than JPY 34,200 in September. The preliminary figure for October is more than 10% higher year on year as well.
And this has become a driver for earnings recovery this time.
The chart shows net sales and operating income of other businesses by segment. Comprehensive building management business and whose service operations tumbled in the first quarter due to the pandemic, but are gradually recovering in the second quarter. I would like to note that income from real estate sales and leaseback is listed separately this time. It used to be included in the development business, but we decided to record them separately to make it easier to understand the impact of the coronavirus. We registered JPY $870,000,000 last fiscal year, but none this year.
That means operating income does not include income from real estate sales and leaseback this time around. BKP and Senior Life are promising businesses and are part of our other businesses. Operating income is steadily improving in both businesses. This slide shows our balance sheet. Interest bearing debts are increasing because we are borrowing some funds from financial institutions ahead of time to prepare ourselves for the impact of the coronavirus.
Higher credit lines from our main banks is a main factor for the increase. Debt to equity ratio rose to 1.3 because of an increase in an interesting bearing debts and the drop in the shareholders' equity due to the poor result in the first half. We are supposed to keep the debt to equity ratio no higher than the healthy level of one point zero, but we cannot at the moment because of emergency measures we have taken against the pandemic. The full year figure is expected to edge higher, but we intend to bring it down by improving our performance next fiscal year. Next, I will talk about projected results for the fiscal year ending in March 2021 that we released on November 9, an initiative that we have taken amid the pandemic.
The column on the far right of this table shows our second half forecast. Our full year forecast is shown on the second column from the left. We did not present the full year forecast as we started the fiscal year because reasonable calculations are difficult at the time due to uncertainty over the pandemic. But since we are now on a clear recovery path, we made full year forecast based on available information and published it. Our Hotel business is significantly improving and expected to further improve in the second half.
Still, we are facing the threat of a third wave of the coronavirus. We took the risk into account in calculating the forecast figures. Sales are expected to drop by 22.2% to JPY132 billion. We are expected to log operating loss of JPY3 billion, ordinary loss of JPY3 billion and net loss of JPY6.8 billion. These numbers may sound too conservative given a solid recovery in the hotel occupancy rates we are seeing.
But we will use them as minimum targets to clear and aim for returning to solid profitability next fiscal year. I will later explain why net loss is expected to expand significantly when I talk about assumptions for our full year forecast. Our dividend policy is steadily reward our stockholders for a long time. Although we reported loss in the first half, we decided to pay JPY 10 per share as interim dividend. We have not decided on the year end dividend.
We will decide based on the results of the second half. We've calculated consolidated full year forecast for the year ending in March 2021 based on assumptions shown here. They are all qualitative factors. I will later talk about assumptions for second half forecast for the hotel businesses in detail. First, the dormitory business.
International students still face difficulty in coming back to Japan, but universities and other schools are returning to face to face classes. We therefore expect a gradual recovery in the number of students in dormitories. The hotel business is expected to fare well because strong travel demand continues going into the second half, thanks to planned extension of the government's go to travel campaign and new lodging plans for our hotels, the government may announce the changes to its go to travel today, but we assumed benefits from the campaign in our forecast. Now I will explain our assumptions with specific numbers. First, domain in business registered occupancy rate of 70.2, ADR of 7,900 and RevPAR of 5,500 in the second quarter.
Its preliminary figures for October show the occupancy rate of 81.8%, ADR of and RevPAR of We took into account this upward trend and the current reservations as well as seasonal factors we saw last year in coming up with our second half forecast. That is the occupancy rate of JPY 80 7 point 4 percent, ADR of JPY 9,400 and RIPA of JPY 8,200. Likewise, resort business registered occupancy rate of 69.4%, ADR of JPY 46,300 and RevPAR of JPY 32,100 in the second quarter. Its preliminary figures for October show the occupancy rate of 77.8%, ADR
of
JPY 43,800 and RevPAR of JPY 34,100. We took into account this upward trend and the current reservation as well as seasonal factors that we saw last year in coming up with our second half forecast. That is the occupancy rate of 85%, ADR of JPY 45,500 and RevPAR of JPY 38,700. We will continue to improve the quality of our services and respond to customers' loyalty and work to increase the occupancy rate and ADR. I repeat because these numbers are not shown in the slide.
Our forecast for the Domine business is the second half with occupancy rate of 87.4%, ADR of JPY94, JPY300, RMB80, Our focus for Resort business is occupancy rate of 85%, ADR of JPY 45,500 and RevPAR of JPY 38,700. In other businesses, a recovery is expected in comprehensive business management business, which includes the hotel catering service that were the brunt of the impact of the coronavirus. A recovery is also expected in the food service business, which operates restaurants and hotels. Its performance will recover as hotel occupancy rates rise. We recorded extraordinary loss after we reviewed our growth prospects and operations to strengthen our financial base.
We've decided to close one of the two domain in South Korea, Kuroskeo, for which we sustained loss of about JPY 1,500,000,000.0. We also closed a global cabin in Japan that is designed to accommodate the increasing inbound travelers, which resulted in the loss of about JPY 400,000,000. We also registered loss of about JPY 2,900,000,000.0 for suspending operations to contain the spread of infections. In total, we reported an extraordinary loss of JPY 4,800,000,000.0 in the first half. The temporary suspension affected 16 domi ends and 21 resort facilities as of June, but all but one or two facilities have reopened since then.
Now let me briefly touch on main initiatives that we have undertaken on our own amid the pandemic. We are providing measures, programs and services catering to domestic customers, assuming that it will take between one year and over eighteen months to see a recovery in inbound travelers. First, we developed new lodging plans in collaboration with a taxi company, which includes door to door taxi transportation service. Customers can avoid infection risks involving public transportation by taking a safe and comfortable taxi ride from their homes to resort hotels and back home. The plans were so well received that it has been expanded to almost entire nation from Tokyo where we started.
We calculated costs of traveling to a hotel by Shinkansen Brit train, for example, and by taxi and compared them taking into account safety from infections and comfort for customers. Thanks to generosity by the taxi company, in terms of lowering fares, the plans are gradually gaining popularity. Customers who traveled by the plan left favorable comments such as they are glad that they used the service or they want to designate the same driver next time they travel or it was a stress free travel. We will offer this service nationwide. The second initiative is renting out domain ins for people working remotely as telework offices.
We also introduced a long stay plan at Domi Inn hotel facilities because in family infection is increasing. We have equipped each hotel room with a refrigerator with a freezing section, replaced desks with a larger one and making washing machines available for long stay. The third initiative is an interest free loan program for students living in dormitories. The loan is designed to help students ease their financial burden and keep them in education. Many of them are cash strapped because they have lost their part time jobs due to the pandemic.
For example, a student on the program pays JPY 30,000 out of the monthly rent of JPY 100,000 and the remaining JPY 70,000 is paid by loan. After graduation, the student pays back JPY 70,000 without interest in installments. The program is well received not only by students but also by universities. We will be creative in making our dormitories, dormie ins and resort hotels more useful for everyone. We are optimistic about the prospects of next fiscal year.
Now how far have we made progress on our midterm management plan? We are ahead of the development plan, which is the key part of the midterm plan. We have already cleared our targets for the number of rooms for dormitories, dormy inns and resort hotels. As the tables in Page 24 show, our achievement rate reached 100% for these numbers. But opening dates for some facilities may be slightly delayed from the original schedule
due to
the coronavirus. In summary, the development plan, the core of the midterm plan is on track. But we cannot share a reason to the midterm plan with you yet because of low visibility. But we will when we can get a better picture.