The city of Onomichi in the southeastern part of Hiroshima Prefecture, which looks out to the Seto Inland Sea, has a rich and long tradition as a hub of trade. During the Edo Period (1603-1867), it prospered as a key docking point for domestic ships peddling goods, and from the early 20th century it grew to host shipbuilding industries.

Today, however, while some of the heavy industries are still active, signs of decline in the local economy are abundant. Nearly half of the shops in the local shopping arcade that stretches along the coast for more than 1 km are now closed. Many of the others are open only on weekends — when the number of tourists picks up — and those that do open on weekdays draw their shutters at 5 p.m.

In the midst of this decline, two properties in the city offer a ray of hope. Renovated to emphasize their original historical beauty and reopened as inn-like places to stay, they not only welcome visitors to the area, but also visibly celebrate the history of the city’s once-affluent merchant class. Formerly owned by the Shimazui family, the expansive estate, now renamed Setouchi Minato no Yado, comprises Shimazui Manor and Izumo House and sits midway on a hill overlooking the Onomichi harbor. Their renovation is the work of Discovery Link Setouchi (DLS), a venture set up last year by local business executives with an aim of revitalizing the region’s struggling economy.

Shimazui Manor, which is made of two units and opened for business last December, was originally built in 1931. A two-story structure, its quasi-Western wooden architecture has several unique features. Left intact are the building’s exterior walls, which are covered with “scratch tiles” — tiles marked with vertical lines, a popular embellishment used by modern architects in Tokyo at that time. The Spanish tiles on the roof and an ornamental round window with zigzag-patterned panes reflect the tastes of Shimazui Manor’s former owner Tetsu Shimazui, who, according to his grandson Masaru, served as a Diet member in Tokyo in the early 1900s.

“My grandfather used to live in the Bunka Apartments in the Ochanomizu area of Tokyo (known as the first Western-style apartment housing in Japan) before he came back to Onomichi to inherit the family business. I guess he led a fashionable life in Tokyo,” said Shimazui, who sold the family estate to DLS last year. “The (original) scratch tiles were the same type as the ones used in the former Prime Minister’s Office (built in 1929 and now used as the residence of acting prime ministers). I heard that he commissioned the same tile company that handled the ex-Prime Minister’s Office to work on his estate.”

The building, which Shimazui said cost nine times the price of an average house to build back then, must have been the envy of locals. It was even equipped with flush toilets, which were very rare in Onomichi at that time. After Shimazui’s relatives moved out six or seven years ago, however, the estate remained unoccupied until DLS took over.

DLS worked extensively on the interiors to make the place comfortable for today’s visitors. It knocked out the walls to the small rooms and divided the house into two units. The Bou House, comprising 100 sq. meters on the first floor and 50 sq. meters on the second, features a dining/living room and a twin room that is lit by soft sunlight entering through the round window. Masahiro Kiritani, a Hiroshima-born architect tasked with the renovation design worked with DLS staff to perfect a chic, neo-Japanese-style decor, and their attention to detail is reflected even in the choice of chopstick-rests in the dining-room drawer. And in keeping with a traditional sense of simplicity and modern Japanese minimalism, the water-heater controller and all the electric appliances, such as the washer/dryer, fridge and microwave, are hidden from view, tucked away in specially designed cabinets. Even some of the electric outlets are disguised.

The second unit of Shimazui Manor is a bit smaller (65 sq. meters for the first floor and 55 sq. meters for the second floor) as it used to function as the family storage area. Now named Sou House, it likewise has a twin bedroom and is just as attentively decorated as the rest of the building. One highlight of staying at Shimazui Manor are the brand-new traditional style bathtubs made of fragrant cypress tree wood — and instead of those once top-of-the-line flush toilets there are now high-tech ones that not only flush, but also open and clean themselves.

Beautiful as Shimazui Manor is, it is perhaps Izumo House, Setouchi Minato no Yado’s second building (opened for guests in April) that is of particular historical interest and value. Locals have already long admired Izumo House for its centuries-old Japanese-style wooden architecture and traditional tea room. It was originally used as a district office for the Izumo feudal domain, its workers overseeing the area’s salt and cotton trade during the Edo Period. While nobody knows exactly when it was built, Shimazui said one of the spacious tatami halls and a tea room on the first floor are likely 200 years old.

After the Meiji Restoration of 1868, when the region-by-region rule by feudal lords was abolished, the building was sold to Onomichi’s merchants association before it was bought by the Shimazui family, who, around 100 years ago, repaired the interiors, built a second-floor extension, and then used the building to entertain important clients of their successful wholesale pharmaceutical business.

To ensure the original style of Izumo House was kept intact, the DSL hired renowned architect and tea-house researcher Masao Nakamura to remodel it and divide it into two parts. Guests can stay on the 130 sq.-meter first floor or the 140 sq.-meter second floor, or they can rent the entire building. There’s a relaxing, settled atmosphere at Izumo House that only well-aged homes can offer. Takanobu Yoshida, manager of Setouchi Minato no Yado, says even as the company works on repairing the creaky wooden passageways in Izumo House, it is keeping the old surface planks because their worn texture is easier on the feet than new wood.

Interestingly, the DSL’s commitment to aesthetics in line with the original beauty of the Setouchi Minato no Yado property has also affected the way the buildings function as “inns.” Technically, they are “rental properties” and a stay does not include meals (though a set sushi meal can be catered for breakfast). This is because of a number of varied legal restrictions for premises to be considered as inns or hotels.

“The rules for inn accreditation don’t go well with our concept. We would like our guests to stay as if they lived there,” said Yoshida, who explained that restrictions included having to put up unsightly emergency exit signs and reducing each unit to below 100 sq. meters in size.

Offering a different kind of accommodation is also hoped to encourage more visitors.

“Onomichi has long been a tourist destination, but 95 percent of visitors don’t stay there,” says Masanao Idehara, who runs his own textile business and works pro bono as president for DSL. “Setouchi Minato no Yado is the first project and symbol of our drive to revitalize the local economy through businesses.”

The DSL, now staffed by 30 people, has already embarked on several other projects designed to help revitalize local businesses. The Onomichi Denim Project, which started in January, is aimed at raising the profile of local denim manufacturers, by creating and marketing “genuinely used” and naturally faded jeans. The company asked 260 Onomichi residents to wear two pairs of jeans as often as they like for a year, with the goal of exhibiting and then selling all 520 pairs. The jeans are collected every week to be washed by an expert cleaner, and to document the fading process photographs are taken of color changes.

The Hiroshima Prefectural Government has also commissioned DSL to rebuild the land of a prefectural warehouse into a 30-room hotel for cyclists, a restaurant and a shop next spring. The Taiwanese bike manufacturer Giant has already pledged to be one of the tenants. All of these projects, says Idehara, are intended to bring jobs and businesses to the city, and to set the example for other entrepreneurs to follow suit.

Setouchi Minato no Yado (Shimazui Manor and the Izumo House) is accessed by stone stairs going up a hill that leads to Senkoji Temple in the city of Onomichi. It’s a 15-minute walk from JR Onomichi Station, which is 20 minutes by local train from JR Fukuyama Station, the nearest Shinkansen stop, which is 3 hours and 40 min away from JR Tokyo Station. A night’s stay at either of the Shimazui Manor units is ¥42,000 for up to four people, plus ¥5,250 per additional guest; at the Izumo House, a night’s stay at either unit costs ¥52,500 for up to five people and ¥5,250 per additional guest. Rates vary with season. For more information, contact the Setouchi Minato no Yado office at (0848)- 38-1007 or visit www.minatonoyado.jp.

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