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Whether it was 150 years ago or today, one thing that has remained constant is Japan’s ability to captivate travelers through its rich culture, deep history, and renowned hospitality. This is reflected in several key indicators. Japan consistently ranks among the top destinations on the World Economic Forum’s Travel and Tourism Development Index. It is also, along with Sri Lanka and Thailand, one of the fastest-growing tourism markets in Asia. And in 2024, Japan welcomed a record-breaking 36.8 million visitors. As a hospitality company, what do you believe makes Japan such a prime destination for travelers from around the world?

I believe the Japanese have a unique way of perceiving the world, and that perspective is deeply reflected in our culture—through manga, anime, and even our long history. These cultural elements have existed for a long time, but it’s only in recent years that people in places like the U.S., Europe, and China have truly started to appreciate them.

Another factor is that more Japanese people are playing active roles overseas and influencing global culture. A great example is Shohei Ohtani, who has become a major figure in the MLB and was named MVP. When I lived in New York years ago, I remember many Americans couldn’t tell the difference between Japanese and Chinese people, but that’s changed—there’s now a growing awareness and appreciation for Japan specifically.

Of course, when we look at Japan’s past, we can’t ignore the difficult chapters, including the events of World War II, which understandably left some negative perceptions. But over time, I think Japan’s contributions to culture and global society have helped reshape that image.

Japan is currently making it easier for digital nomads and remote workers to live and work while traveling, and we're seeing that trend grow rapidly. For example, the number of hotels in the Workation Alliance jumped from 65 in 2020 to over 208 in 2023. What steps is AB Hotel taking to adapt to this trend and become more accessible and appealing for travel-oriented business stays?

We’ve expanded the number of platforms where our hotels can be booked, making it easier for travelers to find and reserve a stay with us. In addition, we maintain an active Instagram presence to share updates and connect with a broader audience.

We’ve also considered hiring multilingual staff to better accommodate international guests. While we haven’t implemented that plan just yet, we see part of the travel experience as the joy of navigating a new environment—including using tools like smartphones to engage with the local language. It adds a layer of adventure to the journey.

AB Hotel Seki

Have you noticed an increase in business travelers to your hotels post-COVID?

Yes we have, and in fact, I believe the rate has increased from 3% to 10%.which is a threefold increase compared to pre-COVID levels.

The hospitality industry, like many others in Japan, is facing significant labor shortages due to the country’s demographic shift. When we’ve spoken with other companies, many have cited digital transformation (DX) and strategic partnerships as key solutions. How central is DX to AB Hotel’s strategy in addressing this labor shortage? And what specific technologies are you currently using or planning to implement to help manage this challenge?

One step we’ve taken is automating our communication around room availability, as well as streamlining our pricing processes through automation. We’ve also introduced an automated check-in system for guests—allowing them to check into their rooms with just a signature. These measures help us operate more efficiently with a leaner workforce while still maintaining a smooth and convenient guest experience.

How far do you believe automation and robotics can realistically transform the hospitality industry? Do you see them as tools to enhance human service, or as potential replacements for certain roles within hotels?

Our automated check-in system is certainly convenient and has helped improve efficiency, but we still believe that human staff are essential—especially in hospitality, where personal service plays such a key role.

In terms of labor optimization, we feel we’ve already achieved a strong balance between efficiency and service. Our personnel costs are currently around 8%, which reflects significant progress in labor-saving measures. Realistically, we might be able to reduce that by another 2%, but beyond that, we believe further automation would start to negatively affect the guest experience.

While the Golden Route—Tokyo, Kyoto, and Osaka—will always remain a staple for visitors to Japan, we’re seeing a growing focus on regional revitalization projects that aim to draw tourists to more rural parts of the country. In your view, how can the appeal of the Golden Route be expanded to include these lesser-known destinations? What role can the hospitality industry play in encouraging travelers to explore beyond the major cities?

There are many hidden gems across Japan that international travelers may not be familiar with yet. For example, in Nakatsugawa, there’s the historic Samurai Road, part of the old Nakasendō—the inland mountain route that once connected Edo to Kyoto during the Edo Period. It is a great example of how cultural heritage can draw interest beyond the typical tourist circuit.

Another example is Omihachiman City in Shiga Prefecture, home to La Collina, a beautifully designed spot that feels like it was pulled straight from a Studio Ghibli film. It’s already quite popular among Japanese visitors and offers a charming, immersive experience where people can sample and purchase regional Japanese confectioneries.

These kinds of places show that there’s strong potential to expand interest beyond the traditional Golden Route. With the right promotion and hospitality support, they can become standout destinations in their own right.

If we look specifically at AB Hotel, we know you recently opened AB Hotel Seki in Gifu Prefecture and AB Hotel Anjo in Aichi Prefecture. For travelers planning a visit to Japan, what are some of the unique amenities or experiences your hotels offer that help set them apart from others?

We see our public baths as a key value-added feature for guests, especially those visiting from overseas who want to experience a uniquely Japanese aspect of hospitality. Because of that, we’re actively looking to enhance and expand these facilities, and we’re currently working with design firms to make them even more appealing and relaxing for our guests.

As part of your mid-term plan, you're aiming to expand to over 100 locations and have identified foreign tourists as a key growth driver. To support this, we understand you're looking to strengthen partnerships with international online travel agencies (OTAs). Could you share what types of OTAs you're targeting for collaboration, and which countries or regions you're focusing on in terms of attracting inbound travelers?

In the short term, we see China as a key market simply because of its size and immediate potential. However, from a long-term business perspective, we believe attracting travelers from Europe and the United States will add more lasting value to our company. Those markets offer more stable, sustained growth, and we see a great deal of untapped potential there.

By focusing on these regions, we hope to diversify our inbound customer base and build a more resilient, future-facing business.

Another one of your key targets is increasing customer retention and loyalty, with a goal of reaching 80%. What strategies are you implementing to encourage repeat stays and build long-term relationships with your guests?

Currently, our main customer base consists of business travelers, particularly those working in the manufacturing industry. These guests often stay for extended periods, which naturally leads to a high repeat rate as they frequently return for business.

This also brings operational efficiency—longer stays mean we don’t need to clean rooms daily or allocate additional staff for frequent check-ins and check-outs. It's a model that supports both customer retention and lean operations.

Your company prioritizes direct ownership and long-term leasing over franchising, which sets you apart from many others in the hospitality industry. This model allows AB Hotel to maintain full operational control. In what specific ways does this approach give you a competitive advantage compared to the more common franchise-based models used by other hotel groups?

In most cases, we operate on a lease model—leasing the land while the investor builds and operates the facility. Over a 15-year period, this model allows us to retain significantly more in cash reserves—about double compared to other approaches.

We did consider expanding rapidly by borrowing through a Japan Real Estate Investment Trust (JREIT), but ultimately decided against it. While that model could accelerate growth, it makes it much more difficult to achieve sustained profitability. Our current approach gives us more control over operations and financial stability in the long run.

If we were to return for another interview on the final day of your presidency, what specific goals or ambitions would you hope to have accomplished by that time—both for AB Hotel and for your own legacy as its leader?

One goal I’ve already achieved is the implementation of our dynamic pricing system. It analyzes the inventory and pricing of surrounding hotels, and based on that data, it automatically sets our room rates in real time. Essentially, pricing is now determined by demand. For example, in November 2024—our peak month last year—the system recognized the increased demand and set higher prices accordingly.

I believe that dynamic pricing will probably be applied to areas beyond hotels going forward.
Currently, we are pilot-testing dynamic pricing for parking based on factors such as hotel booking status, traffic congestion information, and weather forecasts.

Much of that November spike came from inbound foreign tourists, who tend to be more willing to pay premium rates—especially during the autumn foliage season, which makes the region more attractive. As Japan continues to grow as a global travel destination, we want to strengthen our position with international guests. Currently, they make up about 10% of our customer base, and one of my ambitions is to double that to 20%.

For more information, please visit their website at: https://www.ab-hotel.jp/company/en/