Imperial Hotel's profit nearly disappears as Kyoto opening and Tower building costs bite

Imperial Hotel reported group revenue of ¥28.0 billion for the six months to September 2026, up 10.2% from a year earlier, in the earnings flash (kessan tanshin, 決算短信) it filed with the Tokyo Stock Exchange on 29 October. Operating profit collapsed 59.5% to just ¥129 million, and net profit attributable to shareholders fell 59.3% to ¥215 million, as the company said rising prices and the costs of two capital projects — a new Kyoto hotel and the reopened Tower wing of its Tokyo flagship — outran the sales gain.

Imperial Hotel Kyoto, the group's first new hotel in 30 years, opened this year and drew what the company described as strong guest numbers and reviews, an "orderly start." At the Tokyo flagship, the Tower wing (タワー館) — closed for an extended refit — reopened, and Imperial Hotel has been re-leasing its office tenants and commercial space, including the basement that once held a restaurant row and the ground-to-fourth-floor site of the former Imperial Hotel Plaza Tokyo shopping arcade, both now being filled with new tenants. The group also ran anniversary promotions — 30 years since Imperial Hotel Osaka opened, 55 years since its hotel shop Gargantua (ガルガンチュワ) opened — aimed at higher-value-added sales.

By segment, hotel revenue rose 8.9% to ¥27.5 billion and hotel operating profit actually rose 16.9% to ¥1.8 billion. The group's real-estate leasing segment, where the Tower's retrofit and tenant-recruitment costs landed, swung to an operating loss of ¥393 million even as its revenue nearly tripled to ¥541 million on the new leasing activity — a reminder that reopening leased floor space is a cost before it becomes a gain. EBITDA, the measure Imperial Hotel tracks as a management target, rose 23.9% to ¥1.9 billion, a sign that much of the profit hit is depreciation and one-off opening costs rather than a weaker hotel business.

Reading the numbers against the hotel market

Imperial Hotel's 10.2% revenue growth outpaces the broader national hotel picture: city-hotel occupancy fell 3 percentage points year on year in August, to 72.3%, and foreign guest-nights fell 10.3%, according to the Japan Tourism Agency — so the gain looks more like a company-specific story (a new property, a reopened wing, a push into higher-value-added sales) than a rising tide. Against floortok's earnings-room hospitality peer group, Imperial Hotel's growth rate sits above the median of 6.5% across 21 comparable operators, though each reports over a different period. The profit side tells the opposite story: the company attributes the near-wipeout in operating profit to "rising prices" generally — a cost pressure consistent with consumer prices up 2.1% year on year in September, according to the Statistics Bureau — on top of the Kyoto and Tower costs it names directly.

Imperial Hotel left untouched the full-year guidance it published on 14 May 2026, and its dividend forecast is unchanged too — a step down from last year's commemorative-boosted total of ¥7 to ¥6 for the year now underway. The company's next bet is on adjacent ground: on the neighbouring site where NTT's Hibiya Tower is under construction, due for completion in 2031, Imperial Hotel plans to run a small-luxury hotel brand on the upper floors and a banquet hall with new audio-visual equipment on the lower ones — a second attempt, after the Tower wing, to turn ground next to its flagship into paying floor space.