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Japan's Hoshino aims to revive virus-hobbled hotels through new investment fund

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Japan's Hoshino Resorts, operator of Hoshinoya luxury hotels, is seeking opportunities to revive hotels hit by the coronavirus outbreak and a delay in the Tokyo 2020 Olympic Games, its chief executive said on Tuesday.

[TOKYO] Japan's Hoshino Resorts, operator of Hoshinoya luxury hotels, is seeking opportunities to revive hotels hit by the coronavirus outbreak and a delay in the Tokyo 2020 Olympic Games, its chief executive said on Tuesday.

The hotelier has partnered investor Risa Partners Inc which will establish a fund of as much as 20 billion yen (S$261 million) to be invested in hotels seeking new ownership, the pair said last week.

Hoshino Resorts aims to repeat its feat of the early 2000s when it started reviving hotels and traditional inns that had failed in the decade since the collapse of Japan's economic bubble. At the time, Hoshino managed the accommodation in partnership with US owner Goldman Sachs Group Inc.

The hotel industry has been decimated by the virus as demand for travel vanished. Growth has also stalled in Japan where there has been a surge in the number of hotels ahead of the Tokyo 2020 Olympic Games, which have been postponed for a year.

"Even before the coronavirus outbreak, there was concern about the market outlook due to oversupply," Hoshino Resorts Chief Executive Yoshiharu Hoshino told Reuters.

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"The market would have to have undergone a correction at some point, but it is happening much earlier than many expected due to the virus and the Olympics' delay," he said in an interview.

In cities, business hotels - which offer limited service compared with leisure hotels - would be a good target with the new fund as the number of such hotels has increased rapidly in the past decade, said Mr Hoshino.

There is potential in this category even if the number of business travellers fall, as people still want to spend time in big cities when they travel for leisure, he said.

Shares of Hoshino Resorts REIT Inc have fallen almost 20 per cent this year, in line with the Tokyo Stock Exchange REIT index.

REUTERS

 

 

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