People, Travel

Japan Hotel Chain Mulls Fivefold Expansion

Japan Hotel Chain Mulls Fivefold ExpansionJapan Hotel Chain Mulls Fivefold Expansion

Hoshino Resort Co. mulls expansion of its new chain of hotels in Japanese cities to as many as 20 after the luxury-resort operator first bought four such properties last month to meet rising demand for urban tourism.

“We’ve identified about 30 to 40 cities around Japan as possible locations,” president Yoshiharu Hoshino said in an interview in Tokyo.

The 109-year-old company would like to expand into places like Hakodate in Japan’s northernmost Hokkaido prefecture; Sendai, north of Tokyo; and the western city of Kobe, he said on Wednesday

Hoshino Resort is widening its offerings beyond luxury and hot-spring retreats outside metropolitan areas as overseas visitors to Japan soared 47 percent in the January-to-July period based on Japan National Tourism Organization figures. Hoshino has expanded the company to 32 hotels across the nation after inheriting the business from his father with just one hot-spring resort more than two decades ago.

“I first had the idea to start a city tourism hotel 10 years ago, but it wasn’t until recently that the opportunity to purchase these hotels came up,” Hoshino said. “They fit our list of cities to invest in just right. It may take 10 to 15 years to build up the brand.”

Hoshino Resort bought hotels in the cities of Kanazawa, Toyama, Hiroshima and Fukuoka for about 40 billion yen ($334 million) in August. The executive declined to say how much he would spend on expansion.

The company, based in Karuizawa, west of Tokyo, is set to open four more resorts domestically and one in Bali within a year. These include its first hotel in Tokyo—a hot-spring resort in the Otemachi business district that is slated to start operating in July.

Room rates will begin at about 60,000 yen a night, Hoshino said.

Spending by visitors to Japan doubled to 1.95 trillion yen in the 12 months ended March, from 953 billion yen two years earlier, according to figures from the Japanese Cabinet Office.

Hoshino Resort held an initial public offering of a fund that invests in its hotel brands two years ago to allow the company to focus on managing the properties. It has more than doubled from the IPO price since it began trading in Tokyo in July 2013.