HotelsMag January-February 2019 | Page 18

TRENDING

JAPAN ’ S RACE TO ACCOMMODATE

won ’ t be hard to

It get a sense of place at Fujita Kanko ’ s new hotels : The Japanese company ’ s Tavinos brand will be covered in manga art , squarely aimed at millennials and the like who appreciate minimalism , including AI concierge , automated checkin and bare-bones
Rendering of a Tavinos lounge area
furnishings . The first Tavinos will open in Tokyo in August 2019 and May 2020 , with growth through management agreements or franchising elsewhere in Japan . Yoshihiro Ise , senior managing executive director expected to take over as president and CEO in March , talked with HOTELS .
HOTELS : Where is the opportunity ?
Yoshihiro Ise : Room rates at Tavinos are set
lower than our other hotel groups , approximately US $ 80 per room with two guests . However , its business model is designed to keep profit margins high by minimizing operational costs . Our strategy behind the new brand is to plant seeds with millennials and grow them into lifelong customers .
H : Any concern with growing mid-market competition ?
YI : The Japanese government forecasts that the number of foreign visitors to Japan will reach 60 million per year by 2030 , and the number of arrivals with
international ( lowcost carriers ) is also expected to continue growing . We are quite confident that demand will remain strong for the next several years , and confident that we ’ ll be able to keep differentiating Tavinos in a crowded market . beyond that as well . Currently , millennials are about 35 % of overall foreign guests at our properties , and we definitely see room for growth .
H : Tell us about the glamping concepts .
YI : We opened the first properties for both our glamping brands , Fujino Kirameki and Nordisk Village ( in
2017 ). Our priority now is to stabilize operations and revenues for those properties while finding good locations for future openings . Fujino Kirameki Fuji Gotemba is located near Mount Fuji , so it attracted many guests over the summer , with both occupancy rate and ADR exceeding our forecast . However , selling glamping experiences during winter is a challenge , since the Japanese market is still developing … Nordisk Village Goto Islands opened in September , and the occupancy rate hasn ’ t yet reached our projections due to the winter season .

Oxford ' s

PLAYBOOK

Across three investment cycles starting in the mid-1990s , John Rutledge estimates his Chicago-based Oxford Capital Group has acquired , developed , repositioned and harvested returns on about 13,000 U . S . hotel rooms . Rutledge ’ s Godfrey brand is set to open its fourth hotel , in Los Angeles , and the group is developing a nearly 500-unit luxury apartment building in Chicago next to its Hotel Essex . With about 20 hotels open and a handful more close to opening , it is looking for opportunity in London and the U . K .
HOTELS : How do you feel about industry dynamics at the moment ?
John Rutledge : I would say we ’ re
cautious . We ’ ve harvested a lot over the last several years … At this point of the cycle , we think it made a lot of sense to harvest . Now , in many cases we may still be an investor in the transaction , but we ’ ve round-tripped most of our money and our investors ’ money . We ’ re still in for maybe the next leg , but we ’ ve taken a meaningful amount of chips off the table . I think the good news is , whatever your politics are , we certainly have a business-friendly ( U . S .) government right now that is promoting business and advocating business . I think there are likely to be extra innings in this expansion by virtue of a very business-friendly economic environment . H : Any management-side issues ? JR : It ’ s a tight labor market . People are approaching our people and are getting poached by competitors . There ’ s wage pressure and there are fewer qualified people out there ... Then also just cost pressures , in general , at this stage of the cycle on the operating side . H : Any predictions for 2019 ? JR : You ’ re going to see Airbnb become more like another OTA . There are already hotels using it as a channel , and I think it ’ s going to be one of many channels that people access .
16 hotelsmag . com January / February 2019