The prestigious Suginoi Hotel at the hot spring resort of Beppu, Oita Prefecture, said Thursday it would seek court protection from creditors to keep its doors open in the face of imminent bankruptcy.
The move deals a psychological blow to the Beppu tourism community, which has been watching business steadily decline amid the protracted economic slump.
The Oita fixture, saddled with some 14 billion yen in debt, had been attempting to restructure itself and has contacted several firms interested in supporting its rehabilitation.
The decline in patronage has been exacerbated by the currently harsh operating conditions for the hotel industry, and the company's cumulative losses now total around 4 billion yen. Some of the losses have been attributed to major capital investments for its large indoor swimming pool and other expensive projects.