The inn crowd

PUBLISHED : Saturday, 02 June, 2007, 12:00am
UPDATED : Saturday, 02 June, 2007, 12:00am

Handing over your shoes immediately after entering a ryokan to don traditional slippers feels like a symbolic act - as if stepping back into history demands appropriate footwear.

Ryokan - Japanese inns - were introduced in the 17th century as rest houses for feudal lords travelling to pay respects to the shogun. And despite Japan's dramatic transformation during the past 150 years, the traditional ryokan experience has remained frozen in time, epitomising the essence of traditional Japanese architecture, cuisine and culture.

But the number of ryokan has dwindled steadily during the past two decades - the effect of a stagnant economy and increasing competition from reasonably priced hotels offering attractive new facilities such as spas. Industry insiders say that about 150 inns are forced to close every year, and half the estimated 55,500 ryokan still in operation could be lost by 2020 as more Japanese turn to western-style accommodation.

Tokyo housewife Noriko Kimoto's holidaying habits reflect the trend. 'We'll always visit ryokan. It's in our blood,' she says. 'But instead of two or three visits a year, we now go once in spring-time as a special occasion. I prefer to take my children to a hotel with a swimming pool. We also like how relaxed the western hotels are and being able to choose when and where we eat.'

Such lifestyle changes are critical for the traditional inns, which rely primarily on domestic clientele, as foreign tourists tend to stay away because of their high rates, formal etiquette and language difficulties. Some ryokan operators realise that revamps are in order if they're to survive, but they must tread a tricky path. The appeal of ryokan lies in their traditional service and old-world etiquette. Yet these qualities have increasingly to compete with international norms of flexible room service and varied menus, services and facilities.

'This is the key problem,' says Yoshiharu Hoshino, a ryokan turnaround specialist. 'Ryokan haven't changed, but guests have. Still, we need to think very carefully about how to introduce new elements. We don't want to change everything, but we must make them more competitive for Japanese

and foreigners.'

Hoshino's successes include the restructuring of his family's 100-year-old ryokan in Karuizawa,

near Tokyo.

'After initial strong resistance to my new ideas, family shareholders realised the need for change,' says the 46-year-old businessman.

The inn, named Hoshino-ya, still reflects Japanese culture but now includes the modern amenities and services of upscale resort hotels, he says. One-and-a-half years after reopening, the ryokan has boosted its occupancy rate to more than 70 per cent. Most ryokan manage only 20-30 per cent.

Hoshino says overhauls should first focus on improving basic infrastructure to draw more guests and boost revenues, providing resources to hire and train staff.

The issues that arise in restructuring a ryokan are similar to those in large hotels in Japan, he says. 'Staff productivity is very low - about 80 per cent lower than in the US. There's an urgent need for training. Finding skilled personnel is a major problem for all operators. There is also often a lack of systematic operating and accounting methods.'

But there are challenges specific to the ryokan industry. 'Many inns have been owned by the same family for hundreds of years, so sometimes there is resistance to new investment from external sources, especially from foreign backers,' says Hoshino.

'Ryokan traditionally rely on the personal experience and knowledge of individuals such as the okami [ryokan owner] and the nakai-san [room attendant]. There is also little choice of activities and food, so guests tend to stay for one night only,' he says.

Many ryokan have introduced western-style amenities and practices, some more successfully than others. Asaba, a family-run ryokan established in 1675 in Shizuoka, near Tokyo, has made changes that include making an effort to help foreign visitors find their way around, says Airi Carey,

a family member. When the guests check in, staff explain how the

inn works and ask if they have questions. Asaba also provides an English-language brochure, the option of a western-style breakfast, foreign wines and a selection of whiskies, as well as books in a variety of languages. Guests may also ask for chairs - almost never found in traditional ryokan - in their rooms.

'We can even make a futon higher, like a western bed,' says Carey, but adds there are limits to the ryokan's adaptations. 'We try to meet requests but some things must be kept traditional.'

At Hoshino-ya, the changes have included installing modern fittings and laying out futons for use at any time instead of after the evening meal. Although subtle, such changes are revolutionary for Japan.

The ryokan also offers flexible mealtimes, the choice of opting out of meals to dine at nearby restaurants, a 24-hour room service menu featuring western and Japanese items, and a music and book library.

Massage treatments, an ecology centre, a meditation onsen (bath-house) and a nearby specialist brewery entice guests to stay longer than the usual one night.

One of the first foreign investors to see opportunities in the ailing ryokan business has been Goldman Sachs Japan. It entered the ryokan market two years ago, tapping its experience in Japanese hotel and golf course management. Yet the company encountered significant community resistance after buying Shiroganeya Inn, a prominent 383-year-old ryokan in Kaga, Ishikawa.

The company brought in Hoshino and set up a resort management joint venture with the troubleshooter in charge of local negotiations and management, and the investment bank providing legal and financial inputs.

Goldman Sachs has invested in nine ryokan so far and plans to put in about US$250 million over the next five years, says Iwao Hanaoka, a vice-president in company's strategic investment group. 'We expect the demand for ryokan to remain strong,' says Hanaoka. 'It also has strong potential to attract inbound tourists.'

The main hurdle to further expansion is the lack of suitable managers, Hoshino says. 'The number of new projects coming to us in a year exceeds the number of general managers we can dispatch.' Management personnel are key to introducing new systems and changing the culture in ryokan turnaround projects, he says.

Ryokan also face increasing pressure as international hotel operators start to venture into territory that is the traditional preserve of ryokan. But Hoshino is unfazed. 'Ryokan are a unique product and service with a very ethnic flavour,' he says. 'Foreign names don't fit well into the market at this point.'

Other efforts to extend the appeal of traditional Japanese hospitality have also been made via the internet. The Ryokan Collection provides international sales and marketing support to 33 ryokan across Japan. Its English-language website offers useful tips on how to behave at a traditional ryokan, helps with reservations and provides services from phone rental to a 24-hour telephone interpreter service.

'We act as the bridge between international travellers and luxury ryokan,' says Ryokan Collection president Hiroki Fukunaga. 'Our philosophy is to maintain authentic traditions so visitors can experience original Japanese hospitality.'

Hoshino says: 'We shouldn't try to change everything. Otherwise we could lose what brings people to ryokan: the great food, traditional tatami and onsen culture. It's a very big responsibility.'