TKP Rental Conference Rooms Achieves V-shaped Recovery after 2.5 Billion Loss after the Pandemic
“When the state of emergency was declared in April 2020, I was prepared to hibernate for a while until the catastrophe passed. However, even after six months or a year, it had not subsided. The sense of crisis only grew. So I decided to go directly to the prime minister, whom I had never met.”
Takateru Kawano, 49, president of TKP, a major rental meeting room company, said, “The “prime minister” as he describes him, is a man who has been in the position for a long time, but he has never met. The “prime minister” Kawano refers to is then Prime Minister Yoshihide Suga. The direct talks with former Prime Minister Suga that marked the turning point in the company’s business will be discussed in detail later on.
The corporation was severely affected by the spread of the new coronavirus, and TKP recorded an operating loss of nearly 2.5 billion yen for the fiscal year ended February 2021, the first since its establishment. However, in the fiscal year ended February 2022, the deficit was significantly reduced to approximately 900 million yen. Management improvement is expected to continue. How was TKP able to achieve a V-shaped recovery even with the pandemic? Mr. Kawano looks back on the record of the company’s fierce struggle.
Mr. Kawano launched TKP in August 2005, when he was 32 years old.
“After graduating from university (Keio University, Faculty of Commerce), I joined ITOCHU Corporation and worked in the Exchange Securities Department. I was involved in the establishment of Japan Online Securities (now au kabu.com Securities) and felt the real thrill of a venture company from that time. It was during this time that I established eBank Bank (now Rakuten Bank, Ltd.) with my boss. As I supported growing companies, I strongly felt that I wanted to work as a president to nurture their potential in a big way.”
Mottainai Turns into a Business Opportunity
“The second and third floors were unoccupied. It would have been a waste of electricity until the building was demolished. So we asked the building owner if we could rent the second and third floors until the restaurant vacated the building. The owner was overjoyed because he could rent the unused space. We were able to rent the space for about one-third the market price and under very favorable terms, with no security deposit or eviction fee.”
Kawano turned the second floor into a rental conference room and rented out the third floor as temporary offices for a construction company. Since the bursting of the bubble economy, companies tended not to have large meeting rooms, so the rental meeting room business expanded steadily. In 2007, TKP acquired the Japanese subsidiary of Regus, which operates rental offices around the world, and TKP has grown significantly. The company’s operating income was a record ¥6.3 billion in FY 02/08.
However,
In Japan, priority has been given to vaccinating the elderly, and the vaccine has not been spread to the working-age population. If this situation continues, the Japanese economy will die. Many executives were willing to pay their own expenses to have the vaccination at their workplaces, and TKP could provide vaccination sites throughout Japan. As secretary of the Keizai Doyukai (Japan Association of Corporate Executives), I felt a strong sense of mission and decided to go directly to Prime Minister Suga.”
In May 2021, Mr. Kawano met with Prime Minister Suga at the prime minister’s official residence and requested that vaccinations be promoted in central Tokyo. The meeting, which was originally scheduled to last 15 minutes, turned into a 40-minute meeting. Prime Minister Suga heeded Kawano’s request and began promoting vaccinations in June of the following year. TKP’s rental conference rooms, whose use had declined due to the Corona outbreak, were now being used as venues.
“Prime Minister Suga‘s decision resulted in about 1 million people being vaccinated in the three months leading up to September,” Kawano said. “We will also benefit. We have established a pipeline with many companies that have had their workplaces vaccinated, and we have received many requests to use the rental meeting rooms for new employee training and employee recruitment exams.”
It is no secret that thanks to the vaccine, the Japanese economy has begun to reboot. In addition, TKP has used the know-how of its subsidiary event production company, Majors, to produce spectacular online meetings and seminars. As a new post-pandemic business, demand is growing.
“It feels like we’re finally coming out of hibernation. Now it is time to strike back. We will regain what we lost during the pandemic and support Japan’s growth by providing wonderful spaces.”
Kawano’s surprise move of talking directly to the prime minister has revitalized TKP and the Japanese economy.
Image: Shinya Nishizaki： Shinya Nishizaki, courtesy of TKP
