Hotels find profit in catering to families

Child-friendly features bring in the guests

by Sayuri Daimon

One autumn afternoon in Kobuchizawa, Yamanashi Prefecture, a group of children and their parents were driving to a field to pick fresh vegetables for pizzas they planned to make there.

Inside the van, the driver asked them, “Do you know how soil is made?” A 6-year-old girl confidently said, “I know. It’s a worm’s poo-poo!” The group burst into laughter.

The group was taking part in a family program organized by Resonare Kobuchizawa, a resort hotel run by Hoshino Resort Co. The hotel offers various outdoor activities to its guest families and children, which has helped it turn the corner after tipping into bankruptcy.

Families with small children often tend to stay at home because many places, not only hotels but restaurants and other businesses, are not set up to accommodate children. But some hotel operators are beginning to wake up to the opportunities that catering to families can provide.

Yoshie Komuro, the mother of a 4-year-old boy and president of Tokyo-based Work Life Balance Co., which offers seminars and consulting services on work-life balance, recalls a bad experience with a family-unfriendly hotel.

“Soon after my son was born, I wanted to have a relaxing time at my favorite hotel, which we used to go to before I got pregnant. So I called the hotel to make a reservation. But they rejected us, saying they don’t accept babies because they make a big mess,” she said. “My son couldn’t even roll over at that time. It was the moment that my favorite hotel became the hotel that I disliked the most.”

But when Komuro visited Resonare, their child care services, children’s programs and quiet cafe stocked with many picture books made her family’s stay a comfortable one, she said. That experience led her to organize a tour for children and parents in concert with Resonare Kobuchizawa.

The tour included a grape-picking expedition at a nearby farm and a lecture by Komuro on work-life balance. While parents listened to her lecture, children explored the outdoors around Kobuchizawa with Resonare staff. At night, costumed children went Halloween trick-or-treating along the shopping street in the hotel compound. The trip to the vegetable patch was also included in the tour.

Resonare opened in 1992, initially starting out as a resort hotel targeting couples.

The inn filed for bankruptcy protection in 2001. It was then that Hoshino Resort took over the hotel’s operations.

Takeshi Koyama, Resonare’s sales manager, said the company studied the market carefully to resuscitate the hotel.

One disadvantage was its lack of a hot spring — a must in Japan for attracting guests. But when the company did further research, it found that people with children under 12 usually plan trips with the idea of creating good family memories.

“So we decided to target families with children under age 12, especially with those younger than elementary school kids because such families don’t have to worry about their children missing school and can come even on weekdays, as long as the fathers can manage to get time off work,” said Koyama.

The strategy succeeded in attracting families, and the hotel, which posted a pretax loss of ¥410 million in the 2002 business year, turned a profit only three years after Hoshino Resort took over in 2001. In the business year that ended in November 2009, it posted a pretax profit of ¥180 million, according to Hoshino Resort.

Another inn to make a comeback after teetering on the brink of bankruptcy in 2009 is Kagaya Hoshotei, a traditional “ryokan” founded in 1912 in the Yamashiro Hot Spring area in Ishikawa Prefecture.

In April 2009, Hosenkaku, a Japanese-style hotel in the same prefecture, took over the hotel, which was running in the red, and instead of depending solely on travel agencies, it began direct marketing, providing various baby-friendly and other unique services to customers.

“Guests who stayed at our hotel through travel agencies rarely come back because where they stay is just one element in a package tour. They don’t have a strong feeling of attachment to us,” said Takashi Boshiyama, managing director at Kagaya Hoshotei. “So we decided to focus advertising on services that appeal to guests, especially targeting specific segments of the market.”

The hotel came up with a baby-friendly package for young parents. Mothers with newborns are usually reluctant to travel as they are worried about babies crying loudly in public or getting sick during the trip. They also have to bring large bags stuffed with baby things, such as diapers, clothes and toys, Boshiyama said.

Boshiyama’s wife, a mother of three, including a 2-month-old, came up with the idea of a baby-friendly package that provides diapers, milk and homemade baby food for free.

Thanks to other unique plans, such as offering groups of female guests collagen drinks and sweets, its occupancy rate jumped to 81.3 percent in November 2009 from 36.5 percent the year before, with the number of guests more than doubling to 2,439 from 1,096.

“In recent years, the need for such baby-friendly hotels has been increasing,” said Tomoko Minoura of Mikihouse Child & Family Research and Marketing Institute Inc. Based on a checklist of more than 100 items, it gives a “Welcome Baby Accommodations” certificate to hotels that are baby-friendly. The institute has so far awarded the certificate to 16 hotels in Japan, Minoura said.

“There are many mothers who want to travel with their small children, while hotels want to attract guests amid the economic slowdown,” said Minoura. “Hotels that received our certificate have reported good results. One hotel even said the number of guests tripled from the previous year.”

Work Life Balance’s Komuro, who is also a member of various government panels on work-life balance and gender equality, says hotels have started to notice the benefits of targeting families, especially those with working parents who have spending power.

In addition to the need to increase the occupancy rate on weekdays, Komuro pointed to changes in the demographics of both service providers and customers as a factor prompting hotels to provide child-friendly services.

She said people in their 30s and 40s, who used to be single or DINKS (double income no kids) and spent money at high-end hotels even after the bubble years, began to have children.

“Hotels are beginning to realize that such people who used to go to hotels may be less inclined to do so once they have children,” she said.

She added that until recently hotels, because of night shifts, often lost female employees when they had children.

“But with improvements in the working environment, many mothers are now staying in the workforce. Consequently, there are many working at the hotels now who understand the needs of families with small children,” she said.