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Unlocking Japan's Luxury Hospitality: A visionary coversation with Mitsui Fudosan Resort Management's Wataru Sudo

Interview - January 27, 2024

Dive into an engaging interview with Wataru Sudo, President and CEO of Mitsui Fudosan Resort Management Co., Ltd., as he unveils Japan's allure as a top-tier tourism destination and shares insights into the strategies, cultural richness, and distinctive experiences that set Japan apart. Sudo paints a vivid picture of Mitsui's role in fostering luxury hospitality, from the captivating fusion of culinary arts and nature's beauty to diversifying tourism demographics and promoting lesser-known regions. Discover the company's diverse portfolio of hotels, its commitment to local community upliftment, and Sudo's heartfelt vision for fostering a legacy of happiness within the hotel's ecosystem, marking a unique blend of luxury, cultural appreciation, and community care in Japan's hospitality landscape.

WATARU SUDO, PRESIDENT AND CEO OF MITSUI FUDOSAN RESORT MANAGEMENT CO., LTD.
WATARU SUDO | PRESIDENT AND CEO OF MITSUI FUDOSAN RESORT MANAGEMENT CO., LTD.

Despite a substantial drop in overseas arrivals to 250,000 due to COVID-19 from the record high of 31.8 million in 2019, Japan remained the top-ranked country in the World Economic Forum Travels and Tourism Development Index. The government aims to welcome 60 million visitors annually by 2030, and the first half of this year has already seen 10 million visitors. What, in your opinion, distinguishes Japan as a premier tourism destination?

Japan holds six major charms that captivate international visitors. First, its food culture is steeped in history and tradition. Washoku showcases culinary artistry, evident in dishes like sushi, tempura, and teppanyaki. Additionally, Western, Italian, and French cuisines flourish in Japan. Secondly, the country boasts stunning nature across diverse seasons. Cherry blossoms paint spring, while autumn adorns the landscapes with vibrant foliage. Hokkaido offers powdered snow in the north, while Okinawa in the south enchants divers with its pristine ocean.

Thirdly, Rich cultural elements like sake , kimonos , tea ceremonies, iconic gardens, and serene onsen hot springs further elevate Japan's allure. Fourthly, Omotenashi , or unparalleled hospitality, defines the Japanese experience - a blend of safety, cleanliness, and warm service. Fifth, the favorable exchange rate, currently at JPY 150 to USD 1, is highly attractive to foreign visitors, especially those seeking a luxurious experience.

Finally, the increase in international standard hotels Since 2019, our company alone has managed four prestigious hotels: Halekulani Okinawa, Four Seasons Hotel Tokyo at Otemachi, HOTEL THE MITSUI KYOTO, and Bulgari Hotel Tokyo. In the upcoming years, we plan to redevelop another location above Nihonbashi Station into a Hilton's high-end hotel - Waldorf Astoria.

 

Before COVID-19, tourists from China, South Korea, Taiwan, and Hong Kong comprised 70% of Japan's total visitors. Other industry leaders have emphasized the need to diversify Japan's tourism by attracting visitors from Western nations like the United States and Australia, who tend to spend more time and money in the country. Do you believe diversifying the tourism base is crucial post-COVID-19? If so, what strategies is your company implementing to attract more Western tourists?

Diversifying the guest demographics by attracting visitors from various overseas countries can bring immense benefits. Reflecting on our experience with the Halekulani Hotel in Waikiki, Hawaii over the past 50 years, having guests from a wide array of countries such as the US, Australia, Europe, Japan, and Canada has proven advantageous. This diversity not only supports better bookings but also contributes to more efficient hotel management. Similarly, international tourist destinations typically drew in a broad range of nationalities, and Japan could greatly benefit from such diversity.

While our primary customer base remains Japanese, it is essential to continue cherishing and reinforcing these relationships. Simultaneously, expanding our promotional efforts and outreach globally is crucial. Given our resource limitations, targeting specific regions and demographics through our hotels becomes essential to maximize our impact and presence in different parts of the world.

 

Are there specific regions or areas that your firm is considering targeting, seeing them as having the greatest growth potential?

Four Seasons Hotel Tokyo at Otemachi, Bulgari Hotel Tokyo, and HOTEL THE MITSUI KYOTO have been drawing inbound customers purely based on their brands. The Four Seasons Hotel attracts most of its customers from overseas, while Mitsui Kyoto sees 70% of its visitors coming from abroad, with about half originating from Western nations. However, Halekulani Okinawa only accounts for around 13% of customers, possibly due to its location being off the usual tourist routes. We are presently focusing our efforts on targeting Taiwan, China, Korea, and Hong Kong, which offer direct flights to Okinawa. This strategic approach aims to enhance inbound opportunities for Okinawa.

 

While Tokyo and Kyoto draw massive inbound tourism, Okinawa has not experienced the same influx despite its international appeal. Around half of the tourists visit Tokyo, but less than half of Japan's prefectures receive only 1% of visitors. The government has highlighted tourism as vital for reviving local economies affected by Japan's demographic changes. Could you elaborate on strategies to attract and promote regions where your hotels are situated? What additional measures do you believe can be taken to promote these lesser-known regions across the country?

It is crucial to grasp the allure and uniqueness of each locale, emphasizing the food culture, natural beauty, and tourist attractions through strategic use of social media. Collaborating with DMOs (destination marketing organizations) is pivotal, not just within the prefecture but also in the broader region, to deliver a complete experience to visitors. The presence of international standard hotels holds significance, particularly in attracting a high-end clientele.

These hotels help boost local employment by bringing in staff from diverse backgrounds who appreciate and comprehend the area's culture, rich natural surroundings, and culinary delights. Our team conducts thorough research on locally sourced food and skillfully presents it to our guests. Through our hotel management and initiatives, we actively contribute to the revitalization of the local community.

 

With your hotels and resorts spread across various regions in Japan - Okinawa, Tokyo, Kyoto, and locations like Amanemu in Ise - if someone wanted to stay at one of your properties, which region or area would you personally recommend and why?

For an enriching visit to Japan, I would recommend a carefully curated itinerary. Begin with a two-night stay at our luxurious Bulgari Hotel Tokyo, located opposite Tokyo station. This opulent establishment offers exquisite decor and delightful fragrances, allowing guests to immerse themselves in a novel hotel experience while exploring Tokyo's sights. Next, venture to the Amanemu Hotel in Mie prefecture, situated in Ise-Shima known for its pristine coastline, sumptuous seafood, and rejuvenating hot springs. Spend two nights enjoying the resort's offerings and the surrounding natural beauty.

Afterward, a short drive to Kyoto will lead you to HOTEL THE MITSUI KYOTO. Here, visitors can indulge in a two-night stay and savor exceptional cuisine. Our very own Chef Asano recently clinched victory at the national French cuisine competition, earning the honor of representing Japan in the Bocuse d’Or International Culinary Competition 2027. Guests can relish this award-winning culinary experience. Conveniently located near  Osaka International Airport, Kyoto offers easy access for a flight to Halekulani Okinawa. Explore the resort and soak in the breathtaking scenery before returning to Tokyo for a stay at the Four Seasons Hotel Tokyo at Otemachi.

 

Could you share more details about your hotels and the distinct experiences each one offers to its guests?

We adopt two distinct hotel operation styles: those under our direct management and those managed via contracts with international brands like Four Seasons Hotel at Tokyo Otemachi and Bulgari Hotel Tokyo. Our direct hotels, Halekulani Okinawa and HOTEL THE MITSUI KYOTO embody a philosophy rooted in local adoration. These establishments are designed to seamlessly blend with their surroundings, offering guests a distinct experience that showcases the essence of the local culture, history, and natural beauty.

HOTEL THE MITSUI KYOTO, for instance, epitomizes a unique Kyoto experience. Set within the hotel's courtyard, a stunning Japanese garden captures the essence of all four seasons, from spring's cherry blossoms to autumn's vibrant foliage and winter's serene snowfall. Moreover, an extraordinary feature is our excavation 1000 meters beneath, unveiling a direct hot spring route with a spa and onsen facility. Our culinary offering, represented by Chef Asano as the Japanese presentative in Bocuse d'Or, showcases exquisite French cuisine and proudly represents Japan as a French chef. Additionally, we have partnered with Kimono Curator, a traditional kimono weaving method, collaborating closely with skilled craftsmen to provide guests with an authentic Kyoto-style kimono experience. We offer guests exclusive programs tailored for the spring season. For instance, our river cruises provide a serene journey amid the stunning cherry blossoms. Additionally, at Myoshinji, guests can immerse themselves in a Zen meditation experience, allowing for moments of tranquility. In summer, we celebrate Daimonji-yaki, a unique event where the mountain is set alight in specific letter shapes. To enhance this experience, we provide a designated space for guests to enjoy the spectacle while savoring champagne and other amenities.



Our Okinawa hotel boasts a V-shaped design, ensuring breathtaking ocean views and stunning sunsets from every room. Our all-day dining area offers not only delicious meals but also daily entertainment, featuring Hawaiian music or hula dancing to enhance the dining experience. One of our exceptional restaurants is led by Chef Kawate, acclaimed as the seventh among the top 50 best chefs in Asia. He crafts innovative cuisine, blending Okinawan flavors with creative fusion to delight our guests.

Our hotel offers distinctive activities aligned with environmental initiatives. One such program involves guest participation in coral revitalization, contributing to our commitment to preserving marine ecosystems. As part of Okinawa's renowned Blue Zone - a region associated with longevity - we conduct tours to visit power spots and engage in nature experiences in a UNESCO World Natural Heritage Site. Additionally, we offer a Karate lesson, the martial art born in Okinawa, to implement the practice into everyday life. We predominantly function as developers for the management contract hotels such as Four Seasons and Bvlgari. Our role involves leasing their prestigious brands and overseeing hotel operations within our real estate properties situated at elevations ranging from 180 to 200 meters. Our focus lies in offering these brands a distinctive experience encompassing food services, concierge amenities, and distinctive features like open-air spaces, enhancing the overall charm of these establishments.

 

Surprisingly, a Five Star Alliance report suggests that Japan has just over 50 luxury hotels and resorts, a considerably smaller number compared to Western nations with more than 100. Even relatively smaller countries like Hong Kong and Singapore boast around 25-30 luxury hotels, a larger ratio compared to Japan's overall size. In your view, why is there such a disparity, and what strategies could be employed to address this marketing imbalance?

The landscape of luxury hotels in Japan has historically been shaped by a different accommodation style, notably the ryokan, which holds a distinct ranking and appreciation system. Additionally, language barriers and approval processes have restricted the entry of international brands into Japan, contributing to the limited number of luxury hotels in the country.

Recognizing the substantial demand for luxury accommodations, our company, as developers and managers, aims to bridge this gap by leveraging our expertise and services. Our key strengths lie in our adept management of hotels and our development capabilities, enabling us to secure prime high-rise locations that set us apart from competitors. This unique fusion of development proficiency and accumulated hotel management know-how has positioned us uniquely in the market.

While we engage in managing international brands like Four Seasons under management contracts, we also directly operate hotels, taking calculated risks to further refine our hotel management capabilities. At Mitsui, our people are our pride; we place a strong emphasis on selecting and nurturing our staff members. Renowned for their exceptional hospitality, our team embodies comprehensive omotenashi, setting our hotel apart. This dedication has been rewarded with prestigious recognitions such as four or five Forbes Travel Guide Awards, significantly bolstering our business.

 

Considering Japan's aging population and the challenges in recruiting and training staff for the service industry, there has been a rollout of service robots by SoftBank Robotics and other similar solutions. The president of Okura mentioned that the hospitality industry would always rely on people and could not be entirely transformed by technology. Do you share this perspective? How does your company ensure long-term sustainability in terms of human resources? Are you exploring international recruitment, or do you foresee having sufficient local staff to recruit from?

We hold our staff in high regard, and during the COVID period, we prioritized retaining our team without any layoffs. Instead, we utilized that time to train and implement DX for more streamlined hotel operations. As borders reopened post-COVID, we were among the first hotels to resume normal operations. In the initial month, our guest numbers matched pre-COVID levels, and we are operating at full capacity with ample manpower.

Although the current challenge of securing human resources has affected many, we have been fortunate to remain unaffected by this issue. We have sustained all our restaurant operations and maintained full occupancy without closures or reductions. This success is owed to our dedicated and motivated staff, committed to delivering customer satisfaction and memorable experiences. Prospective staff often refer to our hotel's positive reviews, which play a crucial role in attracting new talent.

 

If we were to interview you at the end of your tenure as president, is there a personal goal you would like to have achieved for the company by then?

I am currently managing eight luxury and resort hotels, overseeing about 1,900 employees. If we count their families, the circle extends to over 5,000 individuals. Our partnerships with various companies are also vital, covering security, pool supervision, housekeeping, and facility maintenance. The local community plays a pivotal role in our hotel's success. To us, everyone connected with the hotel is part of our extended family, and their happiness is a top priority. When our employees and the local community are content, it creates a positive cycle that extends happiness to our guests. Considering these hotels have a legacy of over 100 years, fostering long-term happiness is essential. I aspire to leave behind a legacy of this cycle of joy when I eventually step down as president.


Interview conducted by Karune Walker & Paul Mannion

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