Kato Pleasure Group, which runs a chain of so-called love hotels across Japan, plans to spend ¥24 billion (US$204 million) doubling its number of properties to 100 and may sell shares to the public, its founder said.
Japan's love hotels -- which sell rooms by the hour and often allow guests to book and pay at a machine in their lobbies -- are popular in cities where rents average ¥2,500 (US$21) per square meter, forcing many young people and married couples to live with their parents.
If Kato Pleasure sells shares, it would be the first love hotel company to list in Japan, though the industry's image may make it difficult to lure investors.
"The image of a love hotel is dim and sleazy," said Tomoyasu Kato, who owns more than a 50 percent stake in the company. "For young people, a `love hotel' constitutes a necessity." Kato says he has approached investment banks to help fund his plan.
The three-year expansion would make it one of the top three love hotel chains, according to investment bank Westwood Capital (Asia) Ltd.
Kato also owns a business hotel in Fukuoka with the world's fourth-largest securities company Lehman Brothers Holdings Inc and is managing hot-spring resorts with Japan's local governments.
He hasn't attracted any high profile names to his love hotel business. Lehman spokeswoman Jackie Kestenbaum declined to comment.
"It's a shame business," said Tatsuo Koyama, chairman of Aine, a closely held company that owns 100 love hotels. "People think it's a vice business." It's not that the business isn't profitable.
Kato Pleasure -- which said its customers are usually aged between 20 and 27 -- expects profit before tax to rise two-thirds to ¥1.5 billion in the year ending March 31 as sales rise a fifth to ¥12 billion, Kato said.
"The love hotel business is a good one because of the high occupancy rates and minimal maintenance costs," said Gabriel Scion, managing director at Westwood Capital.
"They serve a market where housing is limited, and there is not much privacy in existing properties." Kato Pleasure is taking advantage of record low interest rates and a property slump that has driven commercial values in the world's second-largest economy down about 62 percent in 11 years.
At the Hotel Lala in Tokyo's Shibuya district, 31 of 38 rooms were occupied at 5pm on a recent Thursday.
Tomoyasu Kato, now 37, took over his ailing father's record- producing company, a clothes shop and three love hotels in 1987 when the family business was ¥2 billion in debt and had ¥300 million in annual sales.
Kato Pleasure now has 40 love hotels with 1,059 rooms, for which it charges an average of ¥6,800 (US$58) for three hours, or ¥7,800 for one night. It has more than 3 million guests at its hotels a year.
Many of the company's love hotels have themes including Christmas all year round and churches.
The company employs about 1,700 people including part time workers and has about 1,100 of them working in the love hotel business. Usually there is about one employee per love hotel room.
It costs about ¥15 million to acquire one hotel room and Kato Pleasure is planning to acquire or co-invest with landowners and investors ¥24 billion for 1,582 rooms.
Kato Pleasure's 4.5 million customers can apply for a "Pleasure One" card that enables the 200,000 members to get discounts on their hotel rooms and at the company's restaurants.
Kato offers his love hotel guests complimentary Christmas cakes on Dec. 25 and give them a chance to win a trip to Hawaii.
"The good thing about a love hotel is that you can just go at any time, use it cheaply and it's more exciting than a conventional city hotel," said Kato.
"If I go on business I stay at a love hotel. It's cheaper."
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
PROBE CONTINUES: Those accused falsely represented that the chips would not be transferred to a person other than the authorized end users, court papers said Singapore charged three men with fraud in a case local media have linked to the movement of Nvidia’s advanced chips from the city-state to Chinese artificial intelligence (AI) firm DeepSeek (深度求索). The US is investigating if DeepSeek, the Chinese company whose AI model’s performance rocked the tech world in January, has been using US chips that are not allowed to be shipped to China, Reuters reported earlier. The Singapore case is part of a broader police investigation of 22 individuals and companies suspected of false representation, amid concerns that organized AI chip smuggling to China has been tracked out of nations such
RSS