Special Dialogue with CEO of Hoshino Resorts—It’s Strategy in Japan and Plans for Global Expansion
Thank you very much. So Hoshino San, seems like you have some fans here in the audience. Thank you very much. Thank you, thank you. Normally they don't get clapped. People don't get clapped. Um, it's very small, small audience. But yes. Now I realize that we have to be
very careful because this will be on YouTube. Global audience. Yes. Well, we were talking a few minutes ago, and I am originally from New Zealand. And you told me that you have been spending, uh, let's see the opposite season. Skiing. Yes. In New Zealand for 14 years? Yes. This is the 14th year of, uh, spending a summer or spending their winter in New Zealand. Yes.
And I was not able to visit them during the Covid period for two years. But before Covid and after Covid, I enjoyed my, uh, southern hemisphere winter in August and September. I'm very happy to hear that. Yes, yes. Uh, what would you say is the difference in ski quality between, uh, New Zealand, Southern Alps and Japan? Right.
Um, the snow accumulation and also snow quality is much better in Japan, of course, but, uh, it's very, uh. It's actually quality of life is better in New Zealand, like restaurants nearby, the ski resorts. And, uh, there's a lot of regulations in Japan regarding this, uh, Airbnb, for example. But it's a plenty of house available for you to rent. Those houses are built for their summer retreat. Second homes for the wealthy
people living in Sydney and Auckland and so on. So they're not really using those houses during their winter and that's for us to rent. Very inexpensive price. So it's great, um, accommodation and great food and great view. View from ski resort is probably much better than many of the ski resorts in Japan. We do have two too much trees upon the mountains, but they don't have any of that. And the view is is great. So and it's great to be able to
ski during our summer. You know, most of you probably spent a summer in Tokyo and and you know how it is, so. Um, so just keeping on that track for a moment.
Niseko, do you think Niseko is a Japanese town? Niseko It looks like a Hong Kong now for for me and yes, a lot of the signs in kanji and a big, big kanji characters on the buildings and and so on. So those are very, uh, views of uh, Taiwan and Hong Kong and so on. It's very different now. Um, I understand that the Australians have all moved south. They're in Hakuba and Miyako and. Right. And I have to say they are moving to Tomamu because I'm managing Tomo. And actually Asahi Lake is a very new and popular getting popular.
Now, when you go to Saturday and Sunday in Asakita Ku ropeway station in February and January, it will take probably one hour to get on the ropeway, a very long line to the parking lot and sometimes longer than that. And so, uh, definitely. They are moving to a different locations, and Hakkoda is another very popular destination among the foreign inbound skiers and Hakkoda Ropeway. Another, the first one is always full. 80% of the passengers are international skiers and snowboarders, so it's getting very popular. They know that where they can find a good snow and Niseko and those, uh, Hakuba even, uh, getting to to busy for them to crowded for them so that they are moving to a different locations. There are so many, you know, supply of the snow mountains in Japan and a lot of good mountains in Tohoku and Nagano, and still the Gifu and those areas, Niigata.
So I think they are always moving to and trying to find a new locations for them. And we have a plenty of the new supply. What about during the summer? When. When there is no snow? Do you see any ability to be able to repurpose those resorts in? You mean ski? Ski resorts? Yes. Ski resorts are experiencing a very difficult time finding or having a good occupancies, like even an icicle is. Their rate is so low during the
summertime and and gets very high during the winter time. Uh, looking at the tomamu that we been managing since 2004. Um, 80% of the customer tomamu is very stable, uh, occupancies, but 80% of the customers is during the winter time is a foreigners international market, but 80% of the summer guests are Japanese people coming from Tokyo and Osaka and so on. So, um, being able to find your customers for the summer.
It's a very important element to make the ski resorts profitable. So on one hand, we have foreigners developing tourism in Japan, which may be competition for you, right? On the other hand, you're getting ready to take Japanese tourism overseas. Brand wise, I guess. Can you tell us about what's happening in upstate New York? Uh, upstate New York project is not really targeting a Japanese tourists, but Japanese culture. Japanese culture? Yes. Um, but we've been, uh, trying to, you know, bring the onsen, onsen experience to the outside of Japan. We we opened one in Taiwan.
And Taiwan has a lot of resources, and it's very popular among the Taiwanese now. And but I always wanted to go to a United States. North America. Because Hyatt, Marriott, Hilton, they all come from the United States. And we have to we have to get into their market and to really beat them. So we've been looking for a good
location for us to open a first true onsen, local authentic onsen in the United States. And we found a location like two years ago, and we will be opening that hotel in 2028. We'll be announcing that on Thursday, on Thursday. So I can't, can't, can't say much about it. Yeah.
What made you choose that location? What's special about it? It's it's really 3.5 hours driving distance from Manhattan, and 3.5 hours driving distance from Boston. And, uh, it's it's unknown. It's a hot spring location that was very popular among US travellers during the late, uh, like. The peak was 1870, 18. That's a while ago. So so it's been it's been, uh,
you know, the law for a long, long time, more than 100 years. So that that is a very interesting locations. Uh, main reason why we chose that location is, uh, you know, the, the distance from the big cities and the plenty of the onsen, uh, resource onsen water. Right. That that is very important. And we also the onsen yoga is not only a onsen experience, as you know, we we are providing a Japanese cuisine and also the Japanese Omotenashi hospitality. And Japanese hospitality is based on the, uh, 24 different, uh, seasons per year.
We don't divide it to four, we divide it into 24. So we need a seasons. So we have to have a warm summer and beautiful autumn and snow. Winter and and spring. So that that that's the kind of locations we really wanted for the first project in the United States. So you're targeting Americans, right? We are targeting Americans.
Uh, so is it awkward for Americans to get into onsen, get naked together when they don't know the other people? Yes. This is I've had some experience here in Japan, right? You know, generally speaking, it's quite awkward for people. Yes, I know, because I'm accepting so many foreigners in, in Japan and so but, um, when I was attending a graduate school in the United States in 1984 to 1986, during those period, Um, they they were not eating sashimi at that point. They call it a raw fish.
So they they asked me many questions about why we are eating raw fish. And no other classmates had this raw fish culture. But now when I visit my friends or classmates in United States, Los Angeles and New York, they all keep eating sushi, right? And so I think the bringing the organic experience to the United States is, is very similar to the raw fish experience in 1980s and 1990s. And, and I'm sure, um, it is real. It does have a value. It does have have a great effect on the relaxation and well-being and so on. So I will eventually, uh, I think they will eventually understand that. And so it's not really a matter
of getting a return on, on, you know, in right time and so on. This is something we need to we Hoshino Resorts have to bring that on Sandokan experience to the United States. Uh, and then have them have them experience this awkward experience.
And we want to force them to overcome that barrier of the culture. Yes. Yeah, that's actually a very interesting idea to do that. Will you have a concierge that gets in the onsen with them or show them how to? I don't know yet, but, uh, we are taking, uh, multitask working system from Japan. The multitask working system is our one of the great competitiveness we have compared to a US hotel companies.
Uh, our employee comes in 6:00 the first morning shift, and they prepare breakfast in the kitchen and serve the breakfast, and they go to checkout and housekeeping so that they can leave the hotel at three in the afternoon. That's a nine hour person does all of those same terms for skills, for skills, so that you never see that in a you never see that. Yes. And that's why our guns in Japan are much more high productivity, higher productivity than US hotel companies.
And that's why we are very good at managing these smaller hotels. Yeah, US hotel companies need probably 100 rooms or 150 rooms or 200 rooms to get a scale merit of the having four different divisions in hotels. But when you are managing a 30 room or 50 room hotels, these four divisions system is is a problem for them? Yes. And the reason why we are making high profit from these smaller hotels is the multi-task system is creating a productivity. So I'm just coming back to Japan for a moment. The Hoshino hotels and and
various resorts, they seem to be in very remote locations. Yes. What is the thinking process behind how you site a location, and what's the reason that you picked that? Yeah, we it's not really a strategy of the Hoshino Resorts. We I succeeded one once came from my father in 1991, in Karuizawa, Nagano. And that's how I started my career in this, uh, tourism business. And when I succeeded that hotel,
the July, August, September demand was okay, but the rest of that year was off. Seasons like from September to June. Yes. And nobody really comes to Karuizawa. It's. Karuizawa is a location. You can escape the heat of Tokyo. Yes. So the winter is too cold. And it's not a good place to visit during the spring and fall and so on. So I needed to create a demand to to
visit our locations in off seasons. And that's how we started our business. And that's how we became very good at later. And when we took over this, uh, turnaround business, it is only yatsugatake.
It was a they they went bankrupt and we needed to come in and take over and turn turnaround operations and so on. Again their demand. Demand was so low year round. We needed to create a demand to come. And when we started managing the mountain in Fukushima Prefecture and Tomamu, a huge resort ski resort in Hokkaido, the same reason the demand was a problem for them and we needed to create the demand to visit us. So that's why we are now still very good at going to those remote locations and create the demand for the customers to visit us. And that's that's the difference between us and also the US hotel companies. They are going to a famous, you know, the popular locations to to accept these inbound guests for them. But we definitely to differentiate
ourselves from them, we definitely need to go into those unknown unpopular locations and create the demand for the customers to visit that locations. Yes. I mean, as a travel company ourselves, I get a lot of requests where people say, we want to stay at a Hoshino resort. Find us something to do in the area. What kind of, uh, connection do the resorts have with the local communities, and how do you interact with them? Yeah. Um, so, uh, in last, I think ten years or so, um, we we needed to go to real remote locations. Real remote locations, and, and we
now believe that just just having a good hotel in those unpopular remote locations is not really good enough, even for us to create enough demand. So we we started working with the, the people and also the business owners around us like a good example is a Nagatomo Thompson in Yamaguchi Prefecture. This is a has a very long history and a great unseen resource, and a very historic town. But but their demand has been diminishing for more than 20 years, and all of the business owners were in trouble. So we were able to have a, you know, momentum to create a master plan for the total areas and working also being supported by the city of Nagato. And now we all are moving to that direction and trying to achieve that master plan. We we we planned.
So not only the hotel we create in Nagato Yumoto, but also the other hotel owners. And also there are so many, um, Ikea. Ikea is empty houses. Yes. The people who left and will come back. and we are trying to bring the
new businesses like a cafes and bars and souvenir shops. And those two, those are key and it's been working very, very well. It's becoming very, very busy and we are now creating enough demand for all of these hotels. And there are still a few hotels that are too old and not very popular, and the owners are in trouble and so on.
And one of them is a we found a company who come in and take over that hotel and renovated and reopened in three years. One of your competitors? Yes, one of them. We are inviting we are inviting a competitor. So we are targeting a different segment.
Of course, Kai is targeting probably upscale. Yes, but this company is stable. A stable is the name of the company. They are targeting more inexpensive segment. That's very important. Also, it's very nice. The first floor is a pizza shop,
and they do have a working, working coworking space on the second floor. And the rest of it is a hotel rooms that are not really expensive. It's very reasonable price. Mm. And that's something we are working on. We are trying to revitalize the
entire area of onsen. They do have an onsen resource. They do have a great nature around it. And we just need to, uh, concept, uh, different concept, a new concept. And that is meeting the needs of the individual modern customers. Learning from Japan. From from overseas. So, uh, speaking of, uh, inbound tourists, you know, I think this year we're going to hit 35 million people. Yes.
We need to get them out of Kyoto. Yes, yes, yes. And send them somewhere else. Yes. Um. What? What do you think is the secret to getting people to stop doing, you know. Um. Tokyo. Kyoto. Osaka, right? Yeah.
The, uh, increase the pace of the increase of the inbound business is. I think it's too high for Japan. Uh, thinking about, uh, industry for the last 20 years, the inbound went very like, like this, and but we we have not really changed for the last 20 years as a industries, we did not really have improved our, uh, productivity or business or any, any part of our business. What happened is, um, uh, other countries, a little bit of problem of attracting customers around Japan. At the same time. Yen. Yen is is much more favorable for the international customers to visit Japan. And also Japanese government decided
to focus on the inbound business so that they started issuing the visa travelling visa to those many countries that have not been issuing. So these trees are the real reasons for this sharp increase. Not really the productivity increase of by than by industry. So we need to definitely work on the improving ourselves as an industry and so on. So when you look at our current situation, Japan is very good at culture, travel, right? Culture, travel. So they come to experience the Japanese culture. That's why they are visiting Tokyo,
Kyoto, Osaka, right. And and culture of Japan has been famous for a long, long time. And they started yen is weaker and Japanese government is issuing a visa and that's why they all come to Tokyo, Kyoto, Osaka and nothing else. Nothing else is so, so famous in Japan, but in the world. There's another big segment of the tourism industry, which is a nature travel.
So we are very good at cultural travel, but not very good at nature travel. So so I think we need to improve our contents and hardware of the nature travel in the future so that we can take more people out of Kyoto and send it to other locations. So and we do have a 35 national parks and a few World heritage, uh, nature site in Japan. And we definitely have a resource to to make this nature travel much stronger in this country. I imagine that's actually one of the key activities around some of your resorts, right? Is hiking. Hiking? Yes. Cycling. And so on. Cycling? Yes. So do you think that the momentum for
inbound travel is going to continue? Are we going to hit 60 million or will it top out? Yes. Again, the pace of this increase is too high right now. So it might it might slow down a little bit. We might have some a few years of uh having a stable number, but I think we do have much more potential in the future. Again, how we can send people to other locations is key, and how we can make our nature travel content stronger compared to Canada or Switzerland. And those locations that are very they are very good at nature travel and New Zealand. New Zealand is very strong country.
Um, so that would be the key. So I don't think we can maintain this pace of the increasing inbound business. But uh, on a long term basis, I think we do have a great potential to achieve that government goal. So, um, the, the natural target, I guess, for people who are not going to Kyoto and Tokyo and Osaka are repeat travelers. And I imagine most of your repeat travelers are coming from Hong Kong, Singapore, or maybe Australia, maybe the states. Taiwan. Um, it would seem to me the next level is going to be share, uh, like timeshares or, uh, vessel, you know, buying your own house or something like that.
Have you thought about the progression of these repeat travelers and how you might get involved in that sector? Uh, see, we, uh, in the hotel management business. We haven't really thought about the this besso timeshare or real estate related business. We what we are really good at is having 5000 employees in a company managing the hotels as. But I think the thinking about how we can have a repeat segment internationally is I think content is more important than type of accommodations. If we have a great content so that they start repeating repeat visiting Japan and then this vessel will be probably popular, but hotel would be popular as well, and so on. I'm seeing some very strong repeat patterns in ski business, right? Yeah, skiing from Australia. New Zealand skiers and
snowboarders now are visiting us. I was skiing in in Australia this or New Zealand is this summer like August, September. They they didn't have a good season. They have a shortage of snow, especially in July and so on. So they were so disappointed about their experience in Australia. Now they are saying because of this
disappointing season, Australia, they now have to go to Japan starting our winter in December. So the I think the repeat is happening in in skiing and snowboarding business. But I think the content is the one is the key.
Creating this repeat business overseas. So the when they come from Europe and visit Tokyo and Kyoto and those some temples and I don't know how we can make them repeat visiting us, but uh, maybe a nature trouble might have some, uh, more, more stronger. uh, element in creating a so that implies, you know, that you need to connect with local government. Yes. That you have to have some kind of vision for an area maybe five years or ten years later. Yes. So have do you have like a strategic team inside the organization that is now working on developing destinations? Yeah, we do have a team working who worked on an Emoto case and they are still following that city. And we are now, uh, in a process of,
uh, uh, getting masterplan done in, in Teshikaga town in Hokkaido. It's a north northeast, very remote from any airports. But, uh, they do have a very strong, uh, nature content. It's one of the very famous national parks and Department of Environment.
Government is also involved in making this master plan with us, so we are a team working on it. And I think, um, those, you know, revitalizing those remote areas by making having all these, uh, you know, the town business owners and city and town involved and these, these cases will probably increase in the future. And the DMO will be, uh, taking a very important role in, in progressing this plan in the future. I'm not really Hoshino is not involved in DMO. Uh, but we definitely need to have DMO who plans and execute the strategy written in the master plan.
Yes. The case, the, um. There's one person from the government of Japan. He. He quit the Ministry of Economics and then he moved to Nagatomo. And now he's heading this DMO organizations. And so human resources again a very important we have to have a good, um, capable human resource who, who, who can lead the area. And Japanese government created so many dmos that most of the most of them are not really functioning yet.
Yes, we need to make those DMs function. It's very, very important element in the future. Yeah, very focused on marketing and not much else. Right. But you mentioned that you have 5000 employees. Yes.
Uh, how many of them are non-Japanese? I would say less than 10%. And do you have a plan to start using non-Japanese resources and if so, how? What's the plan for getting them into the right culture mindset? Right. We are recruiting from universities in Japan and we are sending our information overseas like Taiwan, Hong Kong and those countries around us and ski instructors from New Zealand and Australia. Yes. So they can work there winter and they can work with us on our winter and so on. I think getting the enough people to finding enough people, it's not so difficult.
The difficulty is, again, the Japanese regulation. Yes. Regulation. As I said, this area multitasking is so important in our organization. But the Japanese government is now limiting the, you know, the work, uh, work pattern. Yes. For foreigners like they can do front desk, and they can do concierge and they can do ski instructor. But they. We are not allowed to have them do the housekeeping. Why is that? Because they don't need to have the housekeepers don't need to have a foreign culture or foreign language skills. I see.
Yes, they are limiting to the work requiring foreign culture and foreign language. Um, so that that is the one barrier that we have to overcome in the future. And I've been talking to Government of Japan, and my task is, is a very important method for us to achieve the high productivity compared to foreign hotel companies. And, and I don't think they should
really limit our capability of hiring foreigners in Japan. So in the future, do you see that 10% growing to 30 or 40%? Yeah, I definitely saw, but it really depends on the again, the visa regulations in Japan, if we can hire anybody we want and have them do everything, just like we are asking a Japanese, uh, workers to do. And, and then we would definitely like to hire more. Now for your place in, uh, upstate New York. Are those Japanese employees or.
No, the, uh, the the US passport is is very important for us. So we are hiring the people who are having a US passport. Uh, is this very difficult to do that? So it's 2028. We are opening at 2028. And now we started already recruiting. So what we are doing is we are recruiting people now so that we can send them to our institutions in Japan, and asking them to have some experience in 2 or 2 years and then send him back to a hotel. That sounds like the Ikea model,
where they make the future store managers work on the floor and learn how to deal with customers, and so on. So you're using that in a Japanese sense, right? Yes. So we're recruiting from universities here who are, uh, who do have American passport. Or we are also talking to, uh, the US
colleges and universities which have the Japanese culture department. Yes. And so we are looking for somebody who are interested in our culture in Japan and willing to come here and spend two years learning, uh, hotel business and willing to go back and and getting ready for the, uh, this new hotel on Xeno-canto. Right. So the pattern that I'm seeing is onsen overseas New Zealand? Yes, we have onsen there.
Yes, I visited Rotorua. Yes. Mayor of Rotorua invited me. And she was interested in how they can utilise this onsen resource more for for the tourism promotion and so on. Right. It was a huge amount of huge, huge quantity of onsen just flowing like a river. Yes, yes. So we never we don't have that in in Japan. But so amazing amount. We have thermal power generation
because. Yes. Too much. Yes. Too much volcanic activity. Yes. Iceland. Iceland? Yes. I visited Iceland this June June for skiing though. So? So I visited them for skiing and I enjoyed so much. But I found out that they do have a very strong thermal energy. Yes. Yeah.
Two days after we arrived, the big eruption happened near airport. Yes. And they are so used to it. Used to. Used to those eruptions. And also there are so many onsen bathing facilities all around the island. And they do they are very similar to our culture. They like Onsens and they do have a
thermal energy and they are fishing a lot. Fishing businesses is big. They are 80% of the Shishamo we eat in Japan are import from Iceland. So the are there any other locations? Turkey? Uh, Pamukkale.
Turkey doesn't have any snow there, so I don't so I don't have any. But they do have hot water. I don't have any interest of visiting. I see, so it needs to be snow. Yes. It's snowing. It's no nonsense. Yes. Um, are there any other countries
that you have been looking at? No. I think we us, Canada and North America is very important in looking at the hotel business or, you know, global hotel business. Most of the hotel companies are from United States, so we have to be there and do have to have some, you know, our exposure in that market. And we need to appeal to investors. They are always looking for new hotel concepts, resort concepts. And if this one works, I think we will have a probably opportunity to expand our facilities more in the United States.
And that would be our plan for the next ten, ten, 15 years. So instead of Florida, they're all going to go to Minnesota. That's right. Minnesota or wherever? Yes.
1200 unseen locations in the United States. Wow. Yes. Many of them are in California and some are in Colorado. And Colorado is great because it is a big snow and onsen in the same location. So great for me. Lake Tahoe. Lake Tahoe in California. The border of Nevada and California. They do have a onsen and snow.
Yes they do. So? So you're testing. Are you the official tester of each new location? Skiing and onsen. If it passes, then yes, you will think about it. Yes, yes, yes, I'm coming back to Japan. Of course, Japan is a country of disasters. Natural disasters? Yes, we've had Tohoku recently. My own personal experience since I had property in Norrtalje. Mhm.
Uh, terrible earthquake and then floods in the Ishikawa area. What do you think the role of the hospitality industry is to help these areas to recover? Mm. It's a very difficult because we need to, uh, if we are managing a hotel in Kanazawa and In another location in Yamashiro Onsen. Onsen you can. We are and demand for these
facilities are down because of that earthquake. So we we are just working hard and busy enough to help ourselves in these facilities. But on the long term basis, I think we can do a lot. The good example is the Nekoma mountain. The mountain is in Fukushima
Prefecture. We've been managing that since 2003. And the biggest, uh, the natural disaster we had is Tohoku big Tohoku earthquake and the nuclear power accident. We are located in Fukushima. So when we started, you know,
the promotion again overseas, uh, when I tell them we are located, this ski resort is located in Fukushima. Fukushima name is a kind of a name of this nuclear power accident. And they didn't even know that. That's the name of the prefecture, right? So they think that it's the name of the power plant, right. So we had a very difficult time, um, recovering the demand for that. But we are gradually recovering from it. We we are getting a lot of support from Fukushima Prefecture and surrounding cities and towns, and they all are experiencing very difficult time. So it was very natural for us to
really get together and, uh, create a new concept or new promotional activities and so on. So it's getting better and better every year since 2013 to 20 13 or 14. Yes. Three hours. Three years after nuclear power accident. Right. And getting better now. And we were able to connect these
two ski resorts on Nekoma area, and the Department of Environment was very cooperative with us. I think the area was really needed that to get over with this very difficult period of, uh, so the we need to think on a long term basis. So, so was your target like Japanese first to go to that resort. Right. Yeah. International market for Fukushima has been very, very difficult, very difficult, very difficult. So I didn't really focus on that.
And I wanted to have more customers from surrounding prefectures and also the Tokyo areas. And we, we, we going back to the basic but inbound is now increasing. Yes. Especially after corona pandemic period. We are not seeing many from uh like Singapore or Hong Kong.
We are seeing some from Thai and also Vietnam. Yeah. And Korea. There are so many skiers and snowboarders, young skiers and snowboarders who want to maximize their ski experience at the minimum reasonable cost. Yes. And that is really the target for nekoma, right? Okay. So it's not just the up market stuff. We don't we are not looking at the up market at all for nekoma. And may I ask, is that resort now profitable? Yes. It's becoming profitable. We connected and revenue is
increasing. And we are investing $6 million more to have a new fast quad at the base of the north side. Yes, to increase the capacity from the base.
It was too crowded last year and we definitely needed to have more capacity from the base. What do you think about the Japanese domestic market. Is it? I mean, obviously the number of people are aging out. So the population that actually wants to travel or can travel is getting smaller.
Population is decreasing little by little. And, uh, chi chi, this big, big city is getting older. And 2025, I think all of the city generations is over 75 years old, which is the the timing, statistically timing that they they stop traveling their traveling patterns. That's decreasing, I see. So we are losing a big, uh, travel segment now.
But at the same time we do have a huge demand unsatisfied now, existing demand unsatisfied now because of this. Um, the problem of Japanese vacation is like golden week, Right, right. And, uh, some big three day holidays, and they all huge, huge demand constantly on, you know, the few days so that there's always over tourism. Price is high. Very crowded.
And customer satisfaction degrees and so on. So I think if we can implement this new vacation system like France. Yeah. They divide area into three
different locations and, uh, two weeks each for, uh, the different timing. Yes. And that's the kind of things we Japanese government should introduce in Japan so that we can increase. We can still there's a room for Japanese market to to increase in the future. Uh, there's again,
a huge unsatisfied demand right now, uh, existing in Japan. And we need to open up that by having a different vacation patterns or system in Japan? Yes, I've been telling this to the government since 2004. Yes yes yes yes. Aichi. Aichi prefecture. Yes. Yes yes. Aichi Prefecture introduced the Aichi Week in November, and that's a good example of doing something about it from the local government. Yeah. Each week is an elementary school,
and junior high schools can take off during that week. And that was very, very effective. And because they all travel, family travel around surrounding prefectures and very reasonable priced and comfortable. And Shizuoka prefectures and surrounding prefectures actually benefited from the Aichi week. And other prefectures now are trying to follow that.
And if all those 47 prefectures have the same system that our vacation pattern will change then. And that's the way to, I think, create a maintain the huge Japanese demand. So, you know, the fact is that the hospitality sector is a huge generator of GDP in Japan. So do you think that the government really understands that, you know, the way that they've allocated resources? It seems like they haven't really figured out how to use hospitality properly. You mean the the inbound versus domestic? Actually both both. You made the point that hospitality kind of is helping to shape society.
And then secondly, of course, I think the government understands that. Yes. And that's why they created this Concord show. It's a tourism department, right. And they're working very hard.
And they give you access. Yes. So you find that they're willing to listen to you? Yes. And yes, I have the opportunity to tell them how I think. And, uh, it's it's government
strategy and government policies is very difficult to change. And they need time to but they understand the importance of that. And also local governments important, uh, understand the importance of the tourism for them, the manufacturing, having a manufacturing factories in their locations where only kind of have been only, uh, uh, policy for them, but now they are trying to promote the tourism so that the tourism can also contribute to their economy and sustaining their populations. Yeah. People forget it's an export. Mhm. Right, right. Yeah. I think we're going to move to Q&A. Thank you very much for doing that. Yeah. Thank you. So what we'll do is we'll take two questions at a time. Sure.
So this gentleman and this lady. Well, my name is Atsushi Nishiguchi, management consultant, and are teaching here Globis University in terms of yield management. And the pricing is a key. And I think I, you know, is very good at it actually.
Sometimes I feel a little bit expensive, but still. Yes, still. And uh, currently the Japanese hotel price is getting higher and higher. And I'm curious how you observe this current situation. Yes. Thank you. Thank you. Yes. Um, my name is Makiko Shinoda. Um, I provide, um, organizational development services to our large Japanese companies. My question is around, um, talent development for Japan to realize its full potential in the tourism industry. I think Hoshino San hinted there's
talent shortage in various places. Where are the key talent shortages and do you have any? If you have any idea of how to train people towards this, please elaborate. Thank you very much. And, uh, when I take two questions at the same time, I don't usually remember the first one, but. Pressing. Yes yes yes. No no no. The diamond dynamic dynamic pricing, the, uh, the from the business wise, if demand is high, the price goes up. This is dynamic. Pricing is is good for us and good for the productivity and good for the investors. But the I Hoshino Resort has a very unique system to monitor our customer satisfaction on a daily basis.
We have a 20% reply rate and very reliable data every day coming back, and all the employees can have access to that data, and that is helping them to make daily decisions. What they do or what they can change and so on. And what I found over time is that if you keep keep going up the price and if you reach a certain point and goes beyond that price, then customer satisfaction starts going down.
Very strong correlations between pricing and customer satisfaction to a certain point. It's okay. Once you go beyond that price line, the people start feeling that it's not a value for the money. So we identified the data line for each property, and we are making sure that even though the demand is too high, we do have a cap of the pricing at the top so that we can maintain the customer satisfaction in a certain level. And that's important, very important point and talent development. Uh, the training is very difficult
and training costs a lot. Uh, before we start thinking about training, we need to start thinking about how we can utilize the current, uh, capacity or capabilities of human resource in a, in a tourism business. We because of our, you know, old style, uh, organizations and and this, this business method and customs, we are very limited in their activities. We don't give we still don't give them a total freedom of doing what they want to do. So in Hoshino Resorts, we have a flat organizations and trying to motivate people and do whatever they want to do and see if it is successful or not by looking at the customer satisfaction score and so on.
So that's one thing to really, uh, instead of trying to increase their talent, but utilizing the current they currently have. That's one point. Another is so if you can think about that, it's very important for us to to hire good people, hire, uh, people who are doing who can do a lot for us. But the salary level is important. If you are giving them a lower
salary than other industries, they don't come to tourism industries. So if tourism industry in Japan wants to become the, you know, the good leading industry in Japan to help the Japanese economy, we have to give our people the good salary. So in order for us to give them a good salary, we have to have a higher productivity, at least the same level of productivity as the manufacturing industry in Japan. The manufacturing industry is the strongest big industry in Japan, and we have to have the same equal productivity at least.
And that is my my thought about this talent development. Thank you. Yes. One, two. Hi, I'm Brian Posehn. I'm a founder of a fintech company here in Tokyo. Fukuoka. Um, this actually is just a personal interest of mine, but, um, I like to weight lift every day. And so lately, I've been choosing resorts and hotels based on their gyms. And I've actually been to Bali last week and Phuket earlier this year. Um, and I chose the hotel based on
their gym and, uh, kind of this wellness resort concept is really growing quickly in Southeast Asia. But in Japan, there's very few hotels with a decent like gym and weightlifting. So just you talked about content. I was just wondering if you ever thought about adding on, like, a, like a top, top quality gym to your resorts for for guests? Yeah. We have been ignoring your segment. It was to to us, it's been so limited in Japan.
I can see you do that gym. Uh, but but uh uh, when you when you think about the utilization of the space you can develop in, in a resort versus the, uh, usage of the gym is it's very limited. That's why we cannot really convince our investors to allocate the, uh, enough money to create a good gym. Mhm. So international hotel companies, they do have, uh, requirements to have a gym in their hotels. That's why they have it. But every time they open up a new hotel, I visit them and watch their gym space. But usually nobody is doing anything
in the gym, so I still are not really convinced that that is an important element for us to do. If I could suggest because you're in remote areas, why don't you get him to chop the firewood? That's right, that's right, that's right. We are doing that in Hokkaido. Fuji Yoshinaga is a grumping concept, and some guests are doing the chop the woods and trees and you might get some skiing.
Skiing is also a very good exercise. Yes. Exercise? Yes yes yes, yes. Thank you. I've been to Tomamu summer and winter both, and it was a very memorable trip.
Thank you. And I do skiing as well. And I'd like to ask you about sustainability plan if you have, because I sense snow is getting less due to the global warming. So if you have any sustainability plan, I think we, uh, doing some um. Things about this SDGs and elements. But we are limiting to the those who are we we we like. Yes. And because in my mind, no one company can do much about this global warming effect. So, um, so if it is appropriate, uh, encourage our we are using a thermal energy to heat up or it's feasible.
It's feasible and it is helping the profitability of the company. And that's why we are doing we are limiting we eliminated all these Pet bottles from the island in Okinawa. It's a remote island of Okinawa. It's very costly to, to to get rid of this. Uh, and that's the only case we are doing this in terms of the ski experience. We have to have a higher
altitude areas. If you go higher there, there's still plenty of snow. So the in Japanese regulations, again we definitely need the to to open up the high mountain areas. All these are national parks and controlled by the government. And it's very difficult to develop in the future. But my feeling is that Japanese ski resorts developed in between the altitude of 500m to a 1000, 1500m and so on.
But we definitely we have mountains of 2500m and 3000m. And if we can open up these mountains, I think the we will probably maintain the demand for these ski resorts. It's if you. Since I'm skiing a lot, I'm feeling that we are losing snow globally. Yes. It's very sad. Okay. One, two. Sorry. Thank you. Hi, I'm Paul Dupuy, originally from Canada, so please go to Whistler. Yes, I visited Whistler and Shadow Creek and Revelstoke, and I visited Nelson. Oh, Nelson. Okay. Up and coming. Good.
Although I'm an ice hockey player, not a skier. So if you can figure out ice hockey, that would be great. Um, I'm a former CEO of Randstad, the world's largest staffing firm. We talk about people. That is clearly an issue. And I appreciate your comments about bringing in more diverse talent into Japan. I think it's absolutely necessary moving forward. But my question is actually
different. It's about you as a leader. Along with Trond behind me. We teach the OB course here at Globis and your case study, the Hoshino Resort case study is a featured case study. It was the most popular case study in the course that we just finished. And the question we get from the
students is, how was Hodgkinson feeling when he decided to stop the wedding business in Karuizawa and go on a completely new direction? So I guess the question is, what were you thinking? And, you know, maybe the bigger question is what does it mean to be a leader to you in your mind, a game changing leader? Yeah. I need one more hour to talk about it. But but, uh, yeah, the, uh, we still maintain a wedding business in Karuizawa, and. And the first ten years of my, uh, time in Karuizawa, like 1991 to 2001. Uh, I spent I think I spent 50% of my time in wedding business. Yes. So I know the wedding business
very well. It's very difficult to maintain and hard. That's why I don't like to continue waiting in other locations. So I stopped waiting. Business in Asahikawa. Hotel turnaround case. And I usually against the creating a new wedding business in different locations and so on. The main trying to maintain only
Karuizawa is is enough for me. Yes, it is very difficult. Uh, business. Uh, as a leader, I think the I try to follow the business theories. Theories created by this famous professors like, uh, Michael Porter and Ken Blanchard, and and I like their simple mind and simple framework, and we try to follow that. Um, and our team now is pretty strong following that theories and understanding branding and so on.
So when I'm listening to them. I think my team is now ready to control the strategy and leading this, this whole organization to the next, next generations. But recently, what I'm feeling is that my my leadership is necessary when I need to stop doing something in a companies. Yeah, we are doing so many things
in our organizations and they keep adding to the very new new ideas or new promotional ideas, new productivity increase, uh, uh, ideas and and so on. But we need to stop doing the things we have been doing in, in the past. That's very difficult decisions because all these things are usually doing having some effects, some some good effects in the organization, like making some profits. Not not big, but small profits or um, and if we stop them there will be some side effects. Yeah. Negative. but I think for organizations,
I need to find a way so that our team can make a decision of stop doing the things we have been doing. And that's the areas I'm still leading by myself. I keep keep attending those meetings and tell trying to convince them to stop doing this. And I take responsibility of the any negative effects coming from the stopping that. Yes. Yeah. The buck stops with you right? Yes.
So so I try to stop working and and skiing more. Okay. I'm afraid we're out of time. Yes, but I'm sure that, you know, you can exchange cards and that sort of thing immediately after the session. So. Hoshino San,
thank you very much for your time. Thank you very much. Thank you. Thank you very much. Please visit us.
2024-12-19 03:41
