A Japanese hotel operator known for its high-end hot spring resorts is betting that the traditional concept could work in the U.S.
Hoshino Resorts, a 107-year-old company famed for its luxury retreats in beautiful Japanese locales, aims to open its first location on the U.S. mainland in the next three to five years, said chief executive officer Yoshiharu Hoshino, whose family founded the business. The closely-held company has scouted locations and held discussions with real-estate developers and investors, he said. One ideal spot, in his view, could be Saratoga Springs, about a three-hour drive from New York City and Boston.
To build a new facility with a partner, Hoshino would seek out a location in the U.S. with such potential. The culture of visiting hot springs for relaxation and restorative treatments already exists in the U.S., although many of the most sought-after spots still remain wild, with no resort infrastructure around them. Hoshino designs and operates hot spring resorts, typically owned by real-estate developers and investors.
"My personal goal is to bring traditional Japanese hot spring resorts to North America," Hoshino, the fourth generation in his family to run the firm, said in an interview on Bloomberg TV. "There are so many hot spring resources in the U.S."
A new U.S. location would attract Americans who want to experience some of the culture of Japan but may be hesitant — or unable — to travel internationally. The company, which has a property in Hawaii, plans to resume its search for a suitable spot once Covid-19 curbs ease, Hoshino said.
Hoshino Resorts operates several hotel brands for a range of budgets, but is best-known for its high-end Hoshinoya resorts.
While the coronavirus has fundamentally changed travel, opportunities still exist, according to Hoshino. Back in Japan, the company will be careful about developing hotels in urban areas because of oversupply from a recent tourism boom, leaving many operators in those places under financial strain.
Hoshino Resorts opened its first location in Karuizawa, a mountain resort town and popular getaway for Tokyoites, in 1914. When Hoshino became the head of the company in 1991, he began taking over struggling spa resorts and turning them into luxury Japanese-style stays that Hoshinoya is now known for. Many were originally developed during Japan's real-estate bubble era in prime locations, but an economic recovery and influx of tourists before the pandemic made them viable again for a resorts operator like Hoshino.
The sprawling properties tap into concepts long appreciated in Japan, such as scenic natural environments and locally sourced cuisine. Rooms at the resorts are minimalistic and usually have a confluence of Japanese elements, such as tatami straw mat floors and sliding shoji doors, and modern necessities.
The company was profitable in 2020, boosted by a domestic travel subsidy program and demand from Japanese holidaymakers who would've usually gone overseas, Hoshino said. Japan has had fewer coronavirus cases than most other wealthy countries and the government hasn't enforced strict curbs on movement, unlike many other places.
Hoshino said he only expects Tokyo-area hotels to be impacted by the decision to ban foreign spectators from the Summer Olympics, and that travel and business at Hoshino Resorts should return to pre-Covid levels in 2023.
The company operates 43 properties in Japan and three overseas — in Hawaii, Taiwan and Bali. It will open its first location in China this year — in Zhejiang province just south of Shanghai.
"We've been in business for more than 107 years, and it's now time to think about the next 100 years of developing hot spring hotels globally," Hoshino said. "I want to lay that foundation while I'm the head of this company." - Bloomberg