Hoshino Resorts in Japan is using its power to get privately-owned and rural accommodation providers through the Covid-19 storm.
Hoshino Resorts has launched a fund and joint venture to help hotels and ryokan in Japan facing financial difficulty due to the novel coronavirus.
A 50-50 partnership by the fourth generation hotel management company and Tokyo investment bank RISA Partners Inc., the Hoshino Resorts Tourism Revitalization Fund will offer an initial 10 billion yen (US$93.4 million), with a maximum of up to 20 billion yen provisionally. It started operations on October 30, 2020, through joint venture H&R Asset Solutions.
According to Hoshino Resorts, the fund will ensure the long-term survival of hotels and ryokans that may be otherwise unable to weather Covid-19-induced financial troubles, particularly if the inbound tourism they rely on is slow to recover.
Japanâ€™s tourism sector has been badly hit by measures to curb the pandemic in the country, which include entry bans on arrivals from more than 150 countries and regions. In January 2021, a four-week stay-home request was placed for residents of Tokyo and its three neighbouring prefectures due to a spike in cases. The detection of a new, more contagious variant of the coronavirus in four travellers who arrived in Japan has added to the concern.
While larger companies have proved better able to withstand cancellations and lost trade, privately-owned and rural accommodation providers are increasingly facing insolvency or long-term financial uncertainty.
As of end-2020, Tokyo Shoko Research reported that there have been 800 bankruptcies in Japan as a result of Covid-19. As of September 30, 2020, the most recent period for detailed data, about eight per cent of bankruptices (600 recorded at the time) were in the lodgings sector.
Hoshino Resorts believes it can prevent further cases and fulfil the needs of accommodation providers.
The idea for the fund came when the company began receiving enquiries from hotel and ryokan owners whose business continuity was at risk. They wanted Hoshino Resorts to step in and run their operations. When Yoshiharu Hoshino, CEO of Hoshino Resorts, considered the facilities, he believed they could be managed as a sub brand of Hoshino Resorts and began discussion with RISA Partners.
Under the fund, Hoshino Resorts will operate the property or aid in its management, dependent on the hotel or ryokanâ€™s circumstances.
â€śIn the short-term, Hoshino Resorts will support the facilities to keep their business,â€ť said Hoshino, adding that in the longer-term, the businesses will be operated as Hoshino Resorts.
â€śThrough the acquisition of property, this fund aims to provide a succession of business, assistance in the transfer of business, and ways of fundraising for hotel and ryokan operators that are facing a serious loss of demand,â€ť he noted.
He added that the fund will also â€ścontribute to the early recovery of the tourism and lodging industry after Covid-19 is brought under controlâ€ť.
Although Hoshino Resorts has not determined how many properties the fund might be able to help, Hoshino shared â€śquite a number of facilities that are struggling at the momentâ€ť will be able to receive support.
Hoshino Resorts also aims to â€ścherish the local culture and communityâ€ť of the propertiesâ€™ respective areas, to promote the sustainability of tourism in regions across Japan.