Hoshino Resorts has attracted attention for its development of 21 facilities (as of February 72) both in Japan and overseas, including Hoshinoya, 2025 Kai locations, and five other brands such as RISONARE, OMO, and BEB, each with its own distinct brand color. It was in 2 that CEO Yoshiharu Hoshino closed Hoshino Onsen, which had been in operation for over 100 years in Karuizawa, and created Hoshinoya Karuizawa.

Even before that, Hoshino-san had been attracting attention for successfully rebuilding resorts in Yamanashi and Hokkaido, but the birth of Hoshinoya Karuizawa was a major turning point for the current Hoshino Resorts. When asked about the circumstances surrounding its creation, he gave a surprising answer.

Hoshinoya Karuizawa: Starting from a break from Karuizawa

"The first thing we thought about was to eliminate as many of the elements of Karuizawa as possible, or to escape Karuizawa."

The "Karuizawa-ness" that Hoshino was trying to eliminate was the image that many people have of Karuizawa, such as a summer resort, villas, and churches.

"If we're stuck with the conventional image, we can only attract customers in the summer. Since we have hot springs as our weapon, we want to create a facility that is attractive all year round, so instead of being limited to the Western atmosphere of summer resorts and churches, we want to recreate a Japanese village that is being lost here, and let people enjoy the beauty of all four seasons at a hot spring inn. That was the idea behind starting this business."

Escaping Karuizawa. This may sound surprising, but Hoshinoya and Kai hotels, which are dotted around the country, respect the culture and customs of the area and proactively incorporate these into their guest experience programs and workshops.

At Hoshinoya Kyoto, a "uta-yomi" experience is held twice a year, where guests can compose waka poetry under the guidance of the head and wife of the Reizei family, known as the "House of Waka Poets." All Kai hotels also have events and programs called "Local Music." For example, at Kai Tsugaru, live Tsugaru shamisen performances are held every night and Oma tuna is served for dinner.

Far from "escaping Karuizawa," guests can experience the local culture first-hand by staying there. This has now become one of the major features of "Hoshinoya" and "Kai."

How to attract visitors to remote hot spring inns

"When we launched the hot spring inn brand 'Kai,' we based it on the typical hot spring inn that exists in large numbers, with tatami-floored Japanese-style rooms and a female hostess dressed in a kimono. In the Kanto region, hot spring inns near Tokyo, such as Atami, Hakone, and Kusatsu, would have an advantage.

When we were thinking of ways to compete with these hot spring inns and attract people to KAI, a hot spring inn in a remote location, we came up with the idea of ​​a ‘local’ experience.”

Even traditional hot spring inns in rural areas are sure to have their own unique culture and customs. However, we will actively shed light on the "local" aspects that are so commonplace that they are often overlooked, and dig deeper to make suggestions to guests.

This method, which Hoshino Resorts adopted when developing its Kai resort chain, is currently becoming standard in the resort industry.

"Imitation is natural in the business world, so we are grateful that others are watching what we do. However, we expect that it will become more difficult to rely on this method alone in the future, so we think it may be time to consider our next steps."

The solution to overtourism is decentralization to rural areas

Approximately 3,690 million people. This is the number of foreign tourists visiting Japan in 2024 that was recently announced. This is a record high, surpassing the figure in 2019 before COVID-XNUMX, which is a cause for celebration, but at the same time it also causes the problem of overtourism.

In Kyoto City, the outflow of population, mainly among young people, continues unabated. The cause is said to be the soaring land prices caused by the hotel construction boom to accommodate the increase in inbound tourists. Are there any effective measures to deal with the serious overtourism problem?

"80% of inbound overnight stays are actually concentrated in five cities: Tokyo, Kyoto, Osaka, Hokkaido, and Fukuoka. This means the remaining 42 prefectures are undertourism. The solution is to disperse the 5% of inbound tourists concentrated in these five places across the 80 prefectures."

Hoshino's solution is clear.

Enhanced content for 32 national parks

"The concentration of inbound tourists is particularly strong in Tokyo, Kyoto and Osaka, and the reason for this is the appeal of the culture that these cities possess. There are two types of tourism: cultural tourism and natural tourism. Japan is strong in cultural tourism, but weak in natural tourism, and so up until now it has been difficult to promote natural tourism.

The solution is to strengthen nature tourism and attract inbound tourists there. Canada and Switzerland have strong nature tourism, and tourism aimed at that purpose is well established. Japan is also a country with abundant nature. It has plenty of potential for nature tourism."

Hoshino believes that the key word in this case is national parks.

"There are 35 national parks across Japan. Each has its own characteristics and is a place full of charm. If we can promote the charms of the national parks and attract inbound tourists to them, the concentration of these in the three cities should be alleviated. Regional cities will be the bases for people to visit the national parks, so this will also lead to the revitalization of regional cities."

Nature tourism produces many repeat visitors

Hoshino gave San Francisco as an example. In the 1980s, San Francisco was a very popular tourist destination for Japanese people. However, the number of tourists visiting San Francisco has now dropped dramatically.

However, many people visit Napa Valley, which is a short distance from San Francisco, and as a gateway city, San Francisco also attracts tourists.

"Nature tourism is also characterized by the fact that many people visit repeatedly. The government has set a target of attracting 6 million inbound tourists in the future, and I think the most effective way to achieve this is to strengthen the content of nature tourism, particularly in national parks, and increase the number of repeat visitors. This will also help to disperse tourism to regional areas and alleviate overtourism."

Compared to inbound tourists, the number of Japanese tourists is actually stagnating

As the number of foreign tourists visiting Japan increases, the amount of inbound tourism spending has also increased. Meanwhile, domestic tourism spending by Japanese people has also increased, but the growth rate is lower than that of inbound tourism. In other words, it has hit a plateau.

"The most effective way to increase tourism spending by Japanese people is to spread out their holidays. With the current situation where roads are congested, accommodation prices are rising, and the only holidays are Golden Week, summer vacation, and the New Year's holidays, we cannot expect any further growth.

Aichi Prefecture has established a week-long "Aichi Week" in November, during which public elementary, junior high, and high schools in the prefecture can choose one day as a school holiday at the discretion of the school principal. This has encouraged parents to take paid leave to visit nearby areas, which has also had an effect on tourism spending. I believe that such local initiatives, rather than a national initiative, will help to disperse tourism demand and increase spending accordingly."

Spreading out holidays is the key to halting the decline in tourism numbers

"We tend to focus on the increase in inbound tourism and the growth in tourism spending, but of the estimated 28 trillion yen in total tourism spending in 2023, Japanese spending will be around 22 trillion yen. In fact, Japanese tourists account for more than two-thirds of the spending. Japanese tourists are important, and the sluggish growth in tourism is a serious problem.

On the other hand, I predict that there is a strong possibility that tourism spending by Japanese people will decline from now on after 2025. This is because the majority of the baby boomer generation that has supported tourism will be elderly, and many people will no longer travel to tourist spots as they have in the past. For this reason, I think it is urgent to equalize holidays. I have been saying this for quite some time now..."

Plans to open a hot spring inn in North America in 2028

Last October, Hoshino Resorts officially announced plans to open a hot spring inn in the United States in 10. The location is in Sharon Springs, New York State, about three and a half hours by car from Manhattan, a resort town that flourished in the mid-2028s. This area is known for its mineral springs, and indigenous people would visit the area in search of therapeutic properties, making it a sort of hot spring resort.

However, in the 1900s, as air travel became the norm, people stopped visiting the area, and the area began to decline as a tourist destination. Working hand in hand with the local people of Sharon Springs, the area is being revitalized as a former hot spring resort, with hot spring inns at its core. This has much in common with the businesses that Hoshino Resorts has undertaken in Japan up until now.

"In the past, major Japanese hoteliers expanded into North America, but all failed. They used the collapse of the bubble as an excuse for their failure, but in fact that's not the case. It was because Japanese hoteliers started Western-style hotels in North America. It's like a Japanese sushi chef starting up French cuisine in America. Westerners are left wondering why."

"In the same way, people ask why a Japanese hotel company would come to America and open a Western-style hotel; the market doesn't agree. To be accepted in America, we have to clearly present our own cultural background and offer that, and for that to happen, it's essential that we run a hot spring inn. This is something I felt keenly when I lived in America in the '80s."

Four important elements that make up a hot spring inn

"Japanese design and architecture," "Japanese food," "hot spring experience," and "thorough hospitality set against the backdrop of the beauty of the four seasons." Hoshino believes that the elements that make up a hot spring inn can be summed up in these four elements.

"Sharon Springs has mineral springs and four seasons like Japan. In this location, we will provide authentic Japanese architecture and design, as well as Japanese food. We have already begun securing staff for our opening in three years' time, and we will be inviting local staff to Japan and providing them with service training for a hot springs inn. There won't be many guest rooms, around 3 at most. We will also create a Japanese garden and have an open-air bath from which you can view the snow, so we hope to create a Japanese hot springs inn in North America."

I spoke with Hoshino in a room at Hoshinoya Tokyo. As always, Hoshino was dressed very casually. He rarely wore a jacket, let alone a tie. However, he was a true businessperson, constantly bringing a broad perspective and innovative ideas to Japan's tourism industry as a whole, not just the business strategies and organizational management of Hoshino Resorts, and disseminating these along with accurate figures and data.

This attitude changed completely when the conversation turned to skiing, of which he publicly states he aims to have more than 60 days a year to ski.

"We're aiming for 80 days this season."

His mischievous, slightly smug smile was the very image of a boy who loved skiing.

Yoshiharu Hoshino 

Representative of Hoshino Resorts. Born in Karuizawa, Nagano Prefecture in 1960. After graduating from Keio University Faculty of Economics, he completed a Master's in Hotel Administration at Cornell University in the United States. After returning to Japan, he became the representative of Hoshino Onsen Ryokan (now Hoshino Resorts) in 91. Since then, he has operated 5 facilities in Japan and overseas, mainly under the five brands "Hoshinoya," "Kai," "Risonare," "OMO," and "BEB." In 72, he was selected as a tourism charisma by the Ministry of Land, Infrastructure, Transport and Tourism, and has made many recommendations on national tourism policy from a broad perspective. His hobby is skiing. His goal is to ski 2003 days a year in the 2024-2025 season.

Mio Shimamura

Representative, publisher and editor-in-chief of Premium Japan. After working at a foreign advertising agency, he held positions in charge of marketing and PR at top brands such as Walt Disney, Harry Winston, and Tiffany & Co. In 2013, he founded Russo Co., Ltd. He handles PR for various top brands. Because his parents' home was an environment that taught Japanese culture such as tea ceremony and kimono dressing, he acquired the business rights to Premium Japan in 2017 and established Premium Japan Co., Ltd. in 2018.