I
n a little over a week, Hoshino Resorts will officially open the doors and shake out the tatami mats at Hoshinoya Tokyo, their first resort in the Japanese capital, a stone’s throw from the lush green of Chiyoda and the Imperial Palace. It’s the latest move by Yoshiharu Hoshino, the ambitious fourth-generation CEO of the company — two years ago he took the 116-year-old company public — to expand the business and, in the process, carry the traditions of Japan into the 21st century.

The hotel will be ryokan-style — traditional Japanese inns that developed in the 17th century, with onsen, multi-course kaiseki dining and sitting on the floor — a rarity in metropolitan cities, where the comforts and conveniences of the West have been embraced. But Hoshino has had great success over the past two and a half decades merging traditional and modern Japan, and he’s just getting started.

Hoshino is no stranger to making ripples. He entered the family-run resort business in 1989 and, after confronting shareholders about what he saw as mishandling of the company, he was asked to leave. Two years later, as Hoshino watched the market contract but their competitors expand, the company brought him back to revolutionize the business. He was just 31 at the time.

The first fix was getting better workers. “In recruitment, we were [and still are] competing against the manufacturing sector, which is a very high-productivity industry. Japan is famous for that — automobile making, Sony, Canon, etc.,” said Hoshino. He had to convince the younger generation to pick service over manufacturing, and to work and live where his resorts are located. “The young generally want to live in cities, but we had to convince them they should come to the mountains or beaches.” Hoshino also started reorganizing the management of his business in a way that was unseen in Japan.

In Japanese culture, there’s a popular tradition (perhaps less so in the younger generation) in which recent graduates join a company and remain there for the rest of their career. It’s called, both lovingly and un-lovingly, the “salaryman.” Hoshino, sensing a rejection of this concept of hierarchy and waiting-your-turn by the younger generation, shook up the hierarchy by allowing everyone at the company, no matter their seniority, to question methods and put forth ideas. He also made employees more valuable by having them experience everything in the resort, from cooking and cleaning to checking in guests and turning down rooms.

Yoshiharu Hoshino, the ambitious fourth generation CEO of the company -- two years ago he took the 116-year-old company public -- to expand the business and, in the process, carry the traditions of Japan into the 21st century.

Yoshiharu Hoshino, the ambitious fourth-generation CEO of the company — two years ago he took the 116-year-old company public — to expand the business and, in the process, carry the traditions of Japan into the 21st century. (Photo: Henry Phillips)

This is a style he picked up by necessity from managing rural hotels. “Unlike a city environment, you don’t have a lot of companies to subsidize your work, like housekeeping,” said Hoshino. Everything must be done in house. He also incentivizes young workers with the option to take one- or two-year breaks in which they can travel or take classes, all while remaining under the insurance plan of Hoshino, as long as they promise to come back. Hoshino himself understands not wanting to commit to one thing for a lifetime. He allocates 60 days a year to skiing — we caught up with him on his way to Vancouver to ski — and requires that his assistant be proficient on the slopes.

Hoshino first brought western conveniences to ryokans in rural areas. His portfolio includes luxury ryokans in Okinawa, Fuji, Karuizawa and Kyoto, with Bali (Indonesia) coming soon. Now Tokyo provides the true test for locales where ryokan living seems at odds with the business focus of financial centers around the world. In rural Japan, his properties (he manages 35 in total) are patronized by about 80 percent Japanese people. In Tokyo, the financial heart of the country, foreign travelers will likely make up the majority of his bookings. He’s betting that businessmen will pay a premium to end the day on their work trip with a soak in an onsen on the top floor of the hotel, with views of Tokyo, and that they’ll eat long, multi-course meals, with other diners, in the tradition of centuries-old ryokans. While a large city poses his biggest challenge yet, if it succeeds — and the company’s stock price doubling since its IPO suggests it will — Hoshino’s sights are set next on the capital cities of Europe and beyond. So, remember the name.

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