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Walk down the High Street and, while the fashions of the Youth may confuse you into thinking it's the 80s, you're at no risk of thinking it's the 60s. Bad news for sellers of bell bottoms, but excellent news for Japan Leisure Hotels, for whom ‘free love' would do shocking things to their business plan.

The company's ‘love hotels' fill a need caused by Japan's limited real estate and a society which cares for the elderly at home by providing couples with rooms by the hour. As JLH, which lists on AIM, said in its half-yearly results, the sector has proved "resilient", with occupancy "marginally" lower at 230%, supporting the board's view that the leisure hotel industry in Japan is "not a luxury but a necessity".

Despite chairman Alan Clifton describing both the government and the central bank in Japan as being "in a permanent state of crisis", the group said that the leisure hotel industry generated annual revenues in the order of £30bn per year.

The high turnover of rooms means more frequent refurbishment, which hit the half-year Ebitda as one hotel was closed for the period. More are scheduled for renovation, but the group was confident that it was sufficiently practiced to renovate on-time and on-budget. The six-strong group is actively looking to build its estate, supported by its debt-free position, in a heavily-fragmented market where 90% of owners own five or fewer hotels.

Andy Cosslett, CEO of InterContinental Hotels Group, told the Berlin conference that he had held onto shares acquired while chairing Cadbury Schweppes, aware that chocolate sales soar in a downturn. JLH shareholders are betting that their product is as crucial to keep everyone smiling through. 

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