Japan love hotel business still hot despite slump
TOKYO (Reuters) - Japan Leisure Hotels Ltd says its love hotels have maintained an occupancy rate of more than 250 percent despite the recession, though the financial crisis is slowing its expansion plans by making it harder to raise capital.
Guernsey-based Japan Leisure Hotels (JPLH) (JPLH.L) expects the recession to increase chances to buy more love hotels or boutique hotels from distressed sellers, said Steve Mansfield, chief executive of New Perspective, the company that manages assets held by JPLH.
Mansfield said that despite a fall in Japanese property prices that he estimated at about 40 percent from a year earlier, the company was facing difficulty drawing funds from investors amid the global financial crisis.
"Our strategies remain unchanged. We're seeking to be a consolidator in the Japanese leisure hotel market, but the facts are that we have to do that at a different speed than we had intended to do," Mansfield told Reuters in an interview.
JPLH, which is listed on the London stock exchange's AIM market for smaller companies, went public in January last year, raising about 23 million pounds ($32.63 million) through the listing, sharply below its aim to raise about 100 million pounds.
The subprime mortgage crisis has impacted its ability to raise capital, Mansfield said.
JPLH currently has 242 rooms in six hotels in Japan, all outside the Tokyo area.
It was originally planning to increase the number of hotel rooms to 1,200 by the end of 2009 and 3,000-3,500 rooms by 2012 if it had managed to raise 100 million pounds through the IPO, Mansfield said.
($1=.7049 Pound)
(Reporting by Chikafumi Hodo and Yuka Obayashi)
