TOKYO -- Japanese hospitality group Hoshino Resorts will establish a fund of up to 20 billion yen ($185 million) to bail out domestic hotels that are struggling to fill rooms amid the coronavirus pandemic.
The fund, launching as early as summer, will acquire and operate around a dozen properties.
Japan's tourism industry has been hit hard by a drop in both domestic and inbound travelers. Hoshino Resorts has started reopening locations with social distancing measures in place for staffers and visitors.
"It will be crucial to keep tourism workers employed in preparation for the end of the coronavirus," Hoshino Resorts CEO Yoshiharu Hoshino said.
The fund will be managed by H&R Asset Solutions, a 50-50 joint venture established by Hoshino Resorts and Tokyo investment firm Risa Partners. The fund will raise money mostly from Japanese institutional investors.
Hoshino Resorts will be in charge of running the acquired properties. The company operates roughly 40 properties in Japan and abroad and has a track record in turning hotels and inns around.
Before the pandemic, the hotel operator had tried such approaches as offering discounted stays for as little as $50 per night to people 35 and younger in the mountain resort town of Karuizawa. It is also involved in turning Japan's oldest prison into an upscale hotel.
Hoshino Resorts has adapted to the coronavirus disruption by offering telework vacation packages for those needing a change in scenery. This and other ideas will be put to use in reviving struggling hotels.
The fund is expected to operate for three to five years, selling off successful investments as it goes.