Japanese hot springs resort operator eyes U.S. expansion

Company has been scouting sites to open traditional concept.

A Japanese hotel operator known for its high-end hot spring resorts is betting the traditional concept could work in the U.S.

Hoshino Resorts, a 107-yearold 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, N.Y., 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 operates 43 properties in Japan and three overseas. It will open its first location in China this year — in Zhejiang province just south of Shanghai.