March 10, 2018 2:00 pm JST

Hoshino Resorts aims to cash in on new Japanese export: hospitality

Ski-loving fourth-generation CEO specializes in revamping traditional inns

TEIICHI MIYAUCHI, Nikkei staff writer

Like at a traditional Japanese inn, guests at the upscale Hoshinoya Tokyo take off their shoes when entering the hotel.

TOKYO -- In Japan's booming tourism and hospitality market, Hoshino Resorts has earned a reputation for not only luxury but also uniqueness. The company has a track record of revamping traditional ryokan inns to bring out their individual character and give guests an experience they will never forget.

Yet domestic success is no longer enough for CEO Yoshiharu Hoshino, the ski-loving fourth-generation head of Hoshino Resorts. Hoshino had originally planned to leave foreign expansion to the company's next generation of leaders, but watching international hotel chains make inroads into the Japanese market, he changed his mind. 

"Unless we become a global player with locations in the U.S. and Europe, we can't compete with foreign rivals on an equal footing," Hoshino said.

The influx of overseas visitors to the country was also an eye-opener. If Japan is such a popular travel destination, he reasoned, then why not bring Japanese-style hospitality to the world?

With that idea in mind, the company opened its first overseas Hoshinoya-brand hotel, Hoshinoya Bali, in Indonesia last year. Management of the hotel -- like at Hoshino locations in Japan -- is modeled on the traditional ryokan style: individual staff members each take care of a range of tasks, from handling reception duties to cleaning rooms to serving meals. This "multitask" system makes it possible to provide service tailored to the needs of each guest.

Yoshiharu Hoshino, CEO of hotel operator Hoshino Resorts, tries to go skiing at least 60 days a year.

Making an impression

Hoshino is confident that a unique approach to customer service will help his company stand out from its more standardized Western rivals -- and knowing how to make an impression is something of a strong point of his.

Hoshino owns around a dozen pairs of eyeglasses which he uses to portray a different character each.

Some are for work. Others are for leisure. He even has a flashy pair for when he visits China on business.

"I don't get a good response with those in Japan -- people complain that they give me a 'nouveau riche' look. But in China, it's good to appear rich!" 

While his fashion sense is entirely his own, the business he runs -- and his love of travel -- are part of his family heritage.

In 1914, his great-grandfather founded Hoshino Onsen Ryokan in Karuizawa, Nagano Prefecture, after successfully drilling to find a hot spring source, something that had never been done before at that location.

One of the guests who later stayed at the inn was the founder of the Wild Bird Society of Japan. Meeting him inspired Hoshino's grandfather to conserve the wildlife of the area, which became a Hoshino family tradition.

The family's love of nature would eventually lead to one of the younger Hoshino's formative experiences. It was in the 1970s and he was accompanying his grandparents on a trip to Nairobi. His grandfather, who operated Hoshino Onsen, was an avid bird watcher, and the destination of their trip was Kenya's Lake Nakuru, famous for its large flamingo population.

His experiences on that trip remain etched in his memory, including the sight of the lake painted pink by flamingos and the split doors at the hotel whose top half could be opened separately to check for wild animals outside.

Hoshino also traveled extensively with his father, including on a business trip to inspect property in Miyazaki. The southern prefecture, with sandy beaches and a mild climate, was popular with Japanese honeymooners at the time. Though neither his father nor his grandfather tried to teach him any specific lessons during these travels, Hoshino said he did learn from them.

"The great thing about travel is that it gives you a new outlook on life by making you realize how small the world is and say, 'Gee, was I really bothered by my little problems all this time?'"

Now in charge of a company with 36 hotels and inns, he sees those family travels as a key part of what made him who he is today.

Hoshino's relationship with his father was often fraught. At one point after he joined the family company, the two had a serious falling out over a business decision, after which the younger Hoshino left the company and joined Citibank. But a worried shareholder asked him to return to the company. Hoshino became president in 1991, after his father's dismissal.

He and his father, who died in 2013, never talked about company management in the latter's final years.

"I think he was happy to see the company thrive under my leadership, but he never said I was doing a good job," Hoshino recalled. "For him, I was another entrepreneur. I was his successor and rival at the same time."

Rooms at Hoshino Resorts' KAI Hakone in Kanagawa Prefecture feature minimalist design and panoramic windows.

"Ski first"

While they had their differences over business, the elder Hoshino also sparked a lifelong passion in his son: skiing.

When Hoshino was in elementary school, his father would take him on ski trips that sometimes lasted several days. After his school days, however, he did not go skiing again until his company took over two ski resorts, Tomamu in Hokkaido and Alts Bandai in Fukushima Prefecture.

"When you climb a mountain as high as 3,000 meters and look up at the sky, you feel that you really are on the Earth, on this planet," Hoshino said. "Mountains, culture, food -- they're all different from one country to another, and these differences can be a big reason to travel."

He then set about turning his ski resorts into family-friendly destinations, the idea being that people who had been away from the slopes for years could now return with their children. The concept worked at Tomamu, which welcomes many families each season.

At Alts Bandai, more drastic measures were needed, in part because its reputation had been seriously damaged by the Fukushima Dai-ichi nuclear disaster. Hoshino decided to "take the plunge and address what I had long seen as absurd and problematic issues at ski resorts." One measure was to push back checkout time to 1 p.m. to give guests more time for skiing on the last day of their trip.

An avid skier, Hoshino says his personal motto is "ski first."

"It can be good for my work, though my staff think I am joking," he laughed. "It is good because, to make time for skiing, I have started delegating things that I used to do myself. I'm no longer the perfectionist I used to be. I'm now satisfied with 70% or 80%."

Changing with the times

Perfectionist or not, he is still serious about customer satisfaction. In 2013, Hoshino Resorts sold Hoshinoya Karuizawa and other hotels to real estate investment trust Hoshino Resorts REIT so that the company could be asset-light and focus on hotel management.

His approach is not far from that of the original Hoshinoya business, which grew through such innovations as wedding packages that included horse-drawn carriage rides.

"When I try to open or develop a new ryokan, I sometimes find myself wondering, 'What would my father think about this?' or 'What would my grandfather say?'"

At the same time, Hoshino says people's expectations are constantly changing.

"In my father's time, Japanese tourism was still in its infancy, and the thinking was 'learn from what they're doing overseas.' But now, the travel market has matured. You have to offer something special that is specific to the local area of each inn," Hoshino said, adding that he wants guests to experience something unforgettable, like he did on his trip to Kenya.

And what about the next generation of leadership at Hoshinoya Resorts?

"In a family business, it's important to make the company as sustainable as possible before you pass it on," he said.

Hoshino has already passed on his passion for the slopes, teaching his son to ski and watching proudly -- along with his own father -- as the boy won a tournament for elementary school students in Karuizawa.

His son now attends a high school in the U.S. Both Hoshino and his father did postgraduate studies at Cornell University.

In any case, Hoshino appears to be in no hurry to slow down. Despite a busy schedule that includes frequent business trips across Japan and overseas, he is extremely careful about his health. Because his family has a history of heart attack, he has long kept a close eye on his cholesterol and blood pressure. In his 40, those levels started showing dangerous rises, so he stopped eating breakfast and brought them back down to normal levels. His cholesterol again started to rise when he was in his 50s, so he started to eat lunch later and later, eventually ending up eating only dinner each day.

"Right now, both my weight and cholesterol are well under control. I'm very fit," he said.

A few years ago, he got into freestyle skiing, which involves doing jumps and skiing over obstacles.

"It's a bit scary," he said. But Hoshino is not one to let a little fear stop him from trying new things.

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