"TOWARD A SUSTAINABLE JAPAN - CORPORATIONS AT WORK" ARTICLE SERIES Article No. 26
"Ecological Resort that Provides Ultimate Relaxation" (Hoshino Resort Inc.)
http://www.hoshinoresort.com/ (Japanese)

About 150 km north-west of Tokyo, in the eastern part of Nagano Prefecture,

About 150 km north-west of Tokyo, in the eastern part of Nagano Prefecture, there is a popular Japanese summer retreat known as, Karuizawa. It has a history of more than 100 years as a beautiful highland resort in the Asama Mountains.

Hoshino Resort Inc. was founded in Karuizawa in 1904. In its area of 92 hectares, the resort has hotspring spa named Hoshino Onsen Ryokan, the Karuizawa Church and the "Forests of Birds, " all designed to provide visitors with luxurious sense of relaxation in nature. In July 20, 2005, a new resort hotel Hoshinoya was opened here, featuring a hotspring and traditional Japanese style.

The philosophy of the company is to provide customers with the ultimate in relaxation. Hoshino Resort has been running its business with a special consideration for nature since it was established. By extending warm hospitality in a rich natural setting, the company has been providing visitors with deep relaxation and peace that cannot be obtained from material goods. Since the late 1980s, when the resort business started to flourish in Japan, Hoshino Resort has been working on environmentally friendly management based on its vision of being a "Master of the Resort Business." The company aims at gaining the best customer satisfaction and profits by showing the resort's charms to visitors while reducing the burden on nature as much as possible.

Using its expertise cultivated in Karuizawa, Hoshino Resort has revitalized three resort facilities, Risonare Obuchizawa (Yamanashi Prefecture), ALTS Bandai Resort (Fukushima Prefecture) and Alpha Resort Tomamu (Hokkaido Prefecture), which are now under its management. The company's consolidated net sales in 2004 were 13.3 billion yen (U.S.$120 million) and the number of its employees is 800.

Its environmentally friendly management has three elements: EIMY (Energy In My Yard), "Zero Emissions," and Ecotourism, which offers participants enjoyable activities in nature.

Aiming at a 75% Energy Self-Sufficiency Using Renewable Energy

"Energy In My Yard" is a concept that, as much as possible, one should generate the necessary energy from natural resources in one's own yard. In fact, Hoshino Onsen Ryokan has had to generate its own electricity since it was established. It has been producing almost all the necessary electricity from hydropower, using the power of the river flow in the property. However, regarding thermal energy for heaters and hot water supply, it had depended on fossil fuels. As a result, the resort's overall energy self-sufficiency rate as a whole had stayed at 20 percent for years.

In the latest effort to achieve EIMY, the new accommodations built at Hoshinoya have used a heating system that takes heat from effluent water leaving the hot spring spa, as well as geothermal energy. Although heat pump systems using geothermal energy are already popular in Western countries, this method has just started to be introduced in Japan. To date, only a few large hotels use this method worldwide.

Hoshino Resort, with the help of hired specialists, has made improvements in this heating technology to make the optimal use of the geological features in Karuizawa. Based on thorough research of year-round heat demand, the company has designed a geothermal heating system that is efficient even if the demand varies significantly by season. Thanks to this system, energy self-sufficiency at Hoshinoya is expected to rise to 75 percent.

Aiming at 100 Percent Recycling

The company-wide Zero Emission project started in December 1999, with the aim of reducing to zero waste to be incinerated or dumped in landfills.

The first thing they did was to examine the waste they were disposing so that they could determine its total weight and contents. The resort had no data to begin with, but the project members trained all employees, including part-timers, to sort and weigh waste properly. An effort was made to raise awareness about waste and the proper means of recycling. After three months of training, all the waste was being properly sorted and weighed.

The examination revealed that out of all the waste discharged from Hoshino Resort's two hotels in Karuizawa, only 17 percent was recycled in the year starting December 1999. To improve the recycling rate, the team members started with efforts that were easiest to implement, such as recycling used copy paper and donating used bedding to foster homes. They then expanded these activities, making use of suggestions from employees.

In Karuizawa, food waste makes up more than 40 percent of discharged waste. However, it is difficult to compost it using a regular garbage disposer because the waste contains a large amount of oil from food leftovers. After examining various methods, the company was finally able to compost all food waste with the cooperation of a non-profit organization in the area by mixing the waste with compost produced at a nearby ranch. Not only that, Hoshino Resort developed a working relationship with the farmers who use the compost. The resort purchases the vegetables they grow. Thus, a resource recycling loop has been established.

The team members put into practice many ideas and suggestions from employees, including the idea of digital processing of bridal photos (many weddings are held at the church on the resort) and reducing the amount of food leftovers by introducing a banquet menu system in which each guest can select his or her own menu and an amount of food. After five years of effort, the recycling rate improved to 76 percent in 2004. In addition, as a side benefit, employees developed the sense to identify wasteful practices on their jobs, which led to further reductions in costs through the Zero Emission project.

For its vigorous efforts, Hoshino Resort won Japan's Environmental Minister's Award in the hotel and inn category in the sixth Green Purchasing Awards, organized by the Green Purchasing Network (GPN). http://www.japanfs.org/db/
database.cgi?cmd=dp&num=500&dp=data_e.html

Ecotourism Preserves Local Ecosystem

Ecotourism is the third element of Hoshino Resort's environmental management. The aim is to show the participants the charm and value of local nature and the ecosystem by using various research studies as well as to offer them opportunities to enjoy nature. In addition, preserving local nature and ensuring harmonious coexistence with wild animals and plants are also important activities. Picchio, a subsidiary ecotourism company of Hoshino Resort, won the grand award of the first Ecotourism Award from the Ministry of the Environment, in June 2005, for its contribution to the local community through high-quality programs as well as activities to protect Asiatic black. http://www.picchio.co.jp/index.html (Japanese) http://www.env.go.jp/press/press.php3?serial=5987 (Japanese)

Approach to Environmentally Friendly Management

The EIMY and zero-emission efforts of Hoshino Resort are done behind the scenes. When selecting resort hotels, customers usually place importance on the richness and beauty of the surrounding environment, reasonably priced and delicious meals, relaxing hot springs and pleasant customer service. But few customers give top priority to the environmental efforts of hotels.

So why is Hoshino Resort focusing on environmentally friendly business? One answer is risk management. As fossil fuel prices and waste disposal costs are increasing every year, the reduction in those costs has become a critical issue for companies to become more competitive. The company also predicts the public will increasingly hold the view that resort developments leads to environmental destruction-and that this is also a risk factor. While understanding that environmental efforts alone are not enough to draw guests, Hoshino Resort predicts that in the future customers will not want to stay at a resort hotel that is not active on environmental issues.

Meanwhile, when resort managers try to expand their business, environmentally friendly management will be a strong tool to prove management quality to investors and owners. This could be true particularly when a local government participates in resort development, including when joint ventures of both the public and private sector are involved. If resort business managers can prove they will surely protect the natural environment, which is considered to be a local asset, they can have better relations with the local government.

The company also sees benefits in employee recruitment. An increasing number of young people opt to work for an environment-conscious company, and thus, Hoshino Resort can now employ persons with high potential.

About 80 percent of Japan's hotel businesses are said to be running in the red, and few hotel companies are actively involved in environmental management. The GPN of Japan has published a Database on Eco-Hotels and Eco-Inns so that people can easily find and use environmentally friendly accommodations. Out of about 65,000 hotels and inns in Japan, only 285, or less than 1 percent, had been registered as qualifying accommodations as of July 2005. http://www.ecochallenge.jp/index.html (Japanese)

Because environmental activities of hotels do not directly lead to an increase in guests, the cost related to environmental activities would be the first thing to be slashed to cut costs. This means that hotels cannot spend extra money for environmental activities. Hoshino Resort has spent little on all its environmental measures, and invested in these measures only when they could expect quick cost recovery and profitability. For example, the geothermal heat generator mentioned above is expected to pay back its investment within two years and to reduce costs after the third year. Shipping cost of food waste to be composted is also reduced by carrying purchased fresh vegetables with a truck used to ship raw garbage.

Future Efforts

The company's next challenge is to transform its resort hotels in Yamanashi, Fukushima and Hokkaido Prefectures into ecological hotels, like the one in Karuizawa. As a 'Master of the Resort Business,' Hoshino Resort will continue to take the initiative in helping guests restore their own energy in a rich natural setting.

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