TokyoTomo Travel Guide

H.I.S. revised on May 28 its business forecasts downward for the first two quarters (November 1, 2009 – April 30, 2010) and the current full fiscal year (November 1, 2009 – October 31, 2010). It gave the following reasons for the revision: demand shift to low-price tours to Asia, seat supply crunch caused by Japan Airlines’ flight network reorganization, and the fallout of Iceland’s volcanic eruption.

As to the results of the first two quarters, H.I.S. now expects 154,100 million yen in revenue, down 9.4 percent from the initial forecast, and 2,350 million yen in operating profit, down 47.8 percent or nearly a half of the initial projection. Recurring profit is estimated at 1,950 million yen, down 45.1 percent, and net profit at 1,850 million yen, down 19.6 percent. The net profit is somewhat bloated because 630 million yen, an equivalent of negative goodwill that arose in consolidation of Huis Ten Bosch, is amortized once for all and is counted in as an extraordinary profit.

In the estimation of full-year results, H.I.S. expects travel demand will come back in the second half of the fiscal year but does not take a bullish view that it is strong enough to make up for the drop in the first half. The agency estimates operating profit at 7,150 million yen, down 8.3 percent, recurring profit at 6,450 million yen, down 12.8 percent, and net profit at 3,600 million yen, down 12.2 percent.

H.I.S. is going to operate inclusive tour charters to spur demand for the second half of the fiscal year and at the same time looks to rising demand for corporate travel. It seeks to raise revenue by means of store realignment at Ginza and Omotesando areas and by giving impetus to high-quality tour sales.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

Hideo Sawada, chairman of H.I.S. Co., assumed the presidency of Huis Ten Bosch on March 26 after the Tokyo District Court approved of the “Modified Corporate Reorganization Plan” the same day. Sawada unveiled his business plan at the press interview of the day that the entrance fee to the park is to be cut by up to 20 percent or more and admission to entertainment spots will be made free at one third of the facilities, according a spokesman at Corporate Planning Office of H.I.S. Sawada confirmed that his immediate goal is to turn a pretax profit of 100 million yen in the fiscal year 2011.

The spokesman says the basic policy in managing Huis Ten Bosch at the initial stage is to stem the flow of red ink in order at least to make both ends meet. The current entrance fee of 3,200 yen for an adult will be reduced to 3,000 yen at peak seasons and to 2,500 yen at off-seasons. Restaurant and eateries in the park will be open longer hours than now with a wider price range to meet visitors’ requirements.

Meanwhile, such facilities as the camping ground named “Camp Ten Bosch” and the seaside fishing spot will be revamped; moreover, a restaurant will be built at the seaside to cook and serve the caught fish there. A new passage “Sasebo Gourmet Street” will be created to offer Sasebo Burger and other local specialties. As part of entertainment programs, Huis Ten Bosch presents a musical starring Kuniaki Shimizu and a magic show performed by Princess Tenko. “Rose Paysage International Contest” is also scheduled to take place in the near future embracing the rose garden in the park.

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In the consolidated results of H.I.S. for the first quarter of the current fiscal year (November 1, 2009 – January 31, 2010), the agency suffered a 68.6 percent decline in operating profit but narrowly retained 555 million yen therein on revenue of 71,624 million yen, down 13.7 percent. On business front, it took aggressive steps, for instance, by carrying out the 30th anniversary project and a commemoration campaign to mark the 100th store abroad while branching out the first store in Japan that specializes in domestic travel. However, travel demand centered on inexpensive, nearby Asian destinations of short stay. Besides, curtailed or nullified oil surcharge has pared the revenue. The agency also admits the adverse impact of ailing Japan Airlines with seat supply tightened.

To cope with the dwindling revenue, H.I.S. slashed selling and administrative expenses by 1.4 percent to 11,389 million yen whereby it recorded 243 million yen in ordinary loss with smaller non-operating income than a year ago, and six million yen in net loss for the first quarter. The number of customers handled during the full year of the last fiscal 2009 registered a growth of 13.6 percent to 2,776,000, and the same strong showing was being carried over to this year.

This year, H.I.S. has internally set up a cross-sectional unit “Quality Control Committee” in pursuit of maximization of customer’s satisfaction and aspires to enhance quality of products and services as well as traveler’s safety. In light of store network maneuver, Akira Hirabayashi, president, had disclosed his plan at the interview back in December 2009 to open 30 to 50 overseas stores over the next year and to increase 15 domestic stores on the net basis after scrap-and-build operation.

With regard to the management assistance to bail out the troubled Huis Ten Bosch, H.I.S. has reached a basic agreement with the receiver in bankruptcy. However, the agency maintains that effects of such engagement are hard to figure out at this stage, so it has factored out those elements in making the consolidated earnings forecast for the current fiscal year.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.