Tokyu Hotel Chain Co. will close two of its hotels, in Nagasaki and Naha, on Nov. 30 as part of restructuring efforts, company officials announced Wednesday.
The decision follows an earlier announcement that the Tokyo group would close a hotel in Okayama in January, according to the firm.
The officials said intensifying competition among hotels in the Kyushu and Okinawa regions and a decline in revenue from those hotels prompted the move.
Tokyu Hotel Chain concluded that, even if the hotels were renovated, it would be difficult for them to return to profitability, the officials said.
Nagasaki Tokyu Hotel opened in 1974 and has 218 rooms, while the Naha Tokyu Hotel reopened in 1972 and has 208 rooms. A total of 112 employees work for the hotels.
The officials indicated that the closure of further hotels is possible, as a plan to rebuild their hotel business is currently being drawn up.
Tokyu Hotel Chain said in its midterm earnings report covering the half-year through June 30 that it had posted 20.2 billion yen in sales, down 4.7 percent from the previous period, and 198 million yen in pretax losses on an unconsolidated basis. It also reported 3.2 billion yen in net losses, mainly due to restructuring costs.