executive impact

The man behind Japan's finest ryokan-style hotels

By Alexandra Hongo

Dressed in jeans and a casual jacket, Yoshiharu Hoshino enters his office, a room filled with tension in anticipation of the interview. The man is the head of Hoshino Resorts, one of Japan’s largest and fastest growing luxurious hotel corporations, and like most typical company leaders in the spotlight, it is expected of him to be firm, crisp and down to the point. Instead, he modestly smiles and welcomes our team, thanking us for taking the time to meet. He then occasionally checks his phone, mentioning his plans to return home in between meetings, making sure his son is studying for his exams. “My routine really depends on what my son does,” he jokes.

Hoshino now operates three hotel brands in Japan - Hoshinoya, Kai and Risonare - which altogether have 35 fantastic locations in the country, including the newest Hoshinoya Tokyo, a posh natural hot spring ryokan set to open July 20 in the heart of the capital at Otemachi. Featuring 84 rooms, a natural hot spring spa and unique Japanese diners, the tatami-floored and cyprus-scented hotel offers an authentic Kyoto-style experience in the center of Japan’s busiest district.

Hoshino is a soft, intelligent and plainspoken man who is no stranger to challenges and diligence. When he took over the now 102-year-old family business from his father in 1991, he knew it was a long and tough road ahead. He succeeded a “very old ryokan business,” and took the decision to rebrand it by blending traditional Japanese culture and motifs with modern technology, a corporate hint he says he earned during his years as a graduate school student abroad. Twenty-five years later, the company has grown from 150 to 2,200 employees, who Hoshino refers to as the company’s “greatest asset.”

But whether juggling between meetings, business trips or simply catching up with his family, the Cornell University-educated and passionate ski appreciator stands firmly by his motto “have fun” - the base of his corporate and managerial style.

Japan Today visited Hoshino at his office ahead of the grand opening of Hoshinoya Tokyo to learn more about who the man behind the business is and how he managed to rebuild the company into what it is today.

How did living abroad influence your business strategy and personal life?

Before I went to the U.S., I had travelled to many destinations as a tourist and I always thought that my father's traditional Japanese ryokan wasn’t cool — everything I saw outside Japan felt very sophisticated and I wanted to bring that home. But after staying in the U.S., my way of thinking changed completely. I came to learn that foreigners expect us Japanese to be Japanese and our resorts should reflect on our culture. That's the only way we can meet the needs of travelers coming to Japan. That was the biggest lesson I gained from my life abroad. If that wouldn't have happened, I would most probably be bringing Western-style hotels in Karuizawa now.

Did you have any doubts whether you want to succeed the family business?

I made the decision to study hospitality in the U.S. after I made up my mind to succeed my father's business, so at the time I had no doubts. But when I was growing up I had doubts, because as a kid I was only thinking about ice skating and hockey.

We hear that you still enjoy winter sports?

Very much. My goal per year is to spend 60 days skiing. Me and my team travel both within Japan and abroad for skiing. This year, I'll be leaving for New Zealand right after we open Hoshinoya Tokyo hotel. I always schedule my ski schedule before my work schedule (laughs).

This explains your motto "have fun" quite well. But let's get back to history for a moment. What was the company like when you took over in 1991? How has it changed since then?

I succeeded a very old onsen ryokan in Karuizawa. The facility itself was very old, but the most serious problem for me was recruiting. Hiring the right people for the travel industry in the 1990s was extremely difficult. Large companies were massively hiring and providing much better benefits than we could afford to. It was very difficult for a small company like ours at the time. I had to change the company's policy in order to perform better in recruiting. One of the things I did was change the name of the company from “Hoshino Onsen” to “Hoshino Resort,” because I thought that was a much better name for recruiting. It took me ten years to change the company and make it ready to grow. Those were very difficult years, but also very important. Our philosophy and base was built within this time.

How is your current company philosophy different from what it used to be before 1991?

There was a major change in Japan's company management style in the late '90s. In my father's age in the '70s, the market was growing; there were many travelers and it was important to keep developing the facilities. There was no problem recruiting people, so the management was naturally tough on employees. But after the end of the bubble era, the work market totally changed. While financing was the most important asset at the time of my father, now it is to find and keep quality-level employees.

We need to structure our organization in a way that makes our staff motivated. We need to always pay attention to their ambitions and aspirations for the future. Now we have grown our business to have 2,200 employees throughout Japan. Especially because we are working in the hospitality business, our staff’s mental and physical condition is our top priority.

What image do you think people have of you as a company CEO? How close to reality is it?

Many people think that I’m a bottom up CEO and that I always listen to my employees’, but in reality I think I’m more of a top-down head of a company. I mean, top-down in a positive way. I always make sure my staff is happy and I try to implement my team’s ideas, but I don’t make decisions in a democratic way. I need to just do it. I believe that implementation has to be top down. We discuss a lot in our team and we argue a lot. But we value a work environment where everyone can freely express their opinions and in the end respect the decision that is being made.

What do you do if a meeting goes bad? Do you take your team for drinks to cool off?

No, no. We don’t do that. We fight, we argue, we get really mad at each other during meetings, but it doesn’t affect our work and relationship as colleagues. I believe that in order to keep each other motivated, it is very important to listen to everyone’s opinion and we often disagree with each other, but in the end I need to give them my decision.

What is your policy as a CEO in regard to mentoring future leaders?

I think education is very important, but it’s also very difficult to force someone to learn if they don’t want to. So, our basic philosophy in developing employment skills is to provide various opportunities for our staff to grow and develop their skills. It’s important to experience different things instead of focusing on one, so we provide opportunities to do various projects within the company. That is very important for people who want to take on a higher position within the company in the future.

Do you have any foreigners on your executive team?

Not on our executive team yet, but we hope to hire more foreigners to take on management roles in the future. Our current goal is to increase the number of female managers. Over half of our employees are women, but so far we have only two in leading managerial positions, so we want to work on that.

For your 100th anniversary in 2014, you invited 100 people from various countries to travel to Japan and write about their experiences. What was that promotion like for the company?

The idea at the time was to do something that doesn’t have anything to do with company profit or promotion. We just wanted to do something special for this anniversary, because, well it happens only once in a century. So we decided to invite 100 people in their 20s from all over the world and see how their image of Japan changes after traveling here (editor's note: the company invited 120 people from 15 nationalities). I wanted to show the change to Japanese people, so we translated their comments in Japanese to make people here see how the inbound business can affect cultural and social changes. If the Japanese people are able to understand the importance of social impact of tourism, I believe they will be more welcoming to foreigners. It is very important to continue welcoming tourists even if our countries are not politically friendly, for example.

How many new hotels are you planning to open by 2020?

One of our philosophies is not to have any plans. If we can manage the hotels more efficiently and if we can provide better work for our employees and provide higher customer services from our competitors, I think our facilities will continue to grow in the future. We would like to focus on sustainability and improvement of our core management skills, instead of growing too rapidly.

Hoshinoya Tokyo opens on July 20. What can customers expect?

Hoshinoya Tokyo is a traditional Japanese ryokan located in the middle of Tokyo, that provides an opportunity for customers to experience the difference between Japanese ryokan and Western-style hotels. We want to make sure that it is relaxing and comfortable for foreign guest.

What's a typical day for you?

It depends if you’re asking about work or skiing. My son is now 15, so for the past 15 years, my typical day really depends on what he’s doing. My wife also works and it’s more difficult for her to have a flexible work schedule than me, so I’m usually the one to go to school when my son’s teachers have a few words about him, and that happens too often. Today, my meeting started at 8:30 a.m. I came to the office after my son left, but since it’s his exam week, I’ll go back home once at around 3 p.m. to make sure he studies and I plan to come back to the office after that again.

Do you also take care of the housework?

Yes, either of us has be home for dinner. That’s why my assistant and my wife’s secretary exchange information almost every day, planning ahead two, three months, making sure that one of us is home every day. We both have many business trips, so they have to make sure that they don’t overlap.

What do you like to do in your free time?

All my free time is dedicated to skiing - especially in winter.

What is the secret of your success?

It’s not really a secret, but as I said, I had the most difficult time in the first years after I took over the business and in those years I learned that the most important thing is to have the right people at work and to keep them motivated; provide an environment where they will feel comfortable to stay with us long enough. I think that managing this well is one of the main reasons why we’ve come this far.

© Japan Today

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Hoshinoya Tokyo opens on July 20. What can customers expect?

Hoshinoya Tokyo is a traditional Japanese ryokan located in the middle of Tokyo, that provides an opportunity for customers to experience the difference between Japanese ryokan and Western-style hotels. We want to make sure that it is relaxing and comfortable for foreign guest

nice philosophy. Is there really a natural hot spring under Otemachi?

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Is there really a natural hot spring under Otemachi?

Yup, discovered in a dig in 2014, apparently. No trucking in the waters here, it seems.

But you'll pay at least 50,000 yen a night--per person--for the privilege of staying there!

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Hurrah for Otemachi. worked there for years and never knew. Back then only a couple of really rubbish and overpriced business hotels.

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I knew his father in Karuizawa. I loved Hoshino Onsen! Still go there for just the bath when I can. Canno' quite afford room there.

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Re: Otemachi, in many places in Japan, if you go deep enough, you'll hit an onsen. It may be well over a kilometer of drilling though, and you may only get a trickle that has to be reheated and then filtered and recirculated in your bath. But even that will be enough to officially call yourself an onsen, and after that its a question of whether you have the skills, perseverance and luck to make a commercial go of it.

If you want to bathe in "fresh" hot spring water as a customer, look for ones that are "kakenagashi".

As for Hoshino, he's a very sharp guy, and is running a high end and very highly branded operation. Whether they are the "finest" ryokan is anyone's guess, I personally would doubt it, but Hoshino resorts gets called that because its branding is so good. Japanese people love brands, and as Japanese society becomes more and more unequal with the middle hollowed out (kudouka), I guess brands serving the very high end will only become more prominent. Lets go camping with Snow Peak! (tent price 150,000 yen) etc.

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