Declaration of war on the hot spring resort industry…? APA Hotel’s parent company “acquires all shares of Oedo Onsen’s asset management company

APA Investment Advisors Co.

On December 12, the APA Group, which operates APA Hotels nationwide, acquired all the shares of asset management company Oedo Onsen Asset Management, and on December 19 announced that the name of the new company had been changed to APA Investment Advisors. Economic journalist Takashi Matsuzaki explains the background behind the transfer of all shares in Oedo Onsen Asset Management.

Oedo Onsen Group (“Oedo Onsen”) has been suffering from a slump in business performance over the past few years due to the effects of the new coronavirus and other factors. With revenues down, it was difficult for the affiliated asset management company to focus on strengthening its financial base. They are probably anticipating financial support from APA as a new sponsor.”

Change of Top Management to be a Key Point

From APA’s point of view, this is an opportunity for new business. Some media reported that APA might declare war on the hot spring resort industry.

Some media reported that APA would declare war on the onsen resort industry, “APA will be able to use some of Oedo Onsen’s facilities. Although APA’s performance itself has been strong, there are still concerns about the business hotel format, which is primarily for business trips, given the establishment of remote work and the declining birthrate. It would not be surprising if APA were to take a chance on the hot spring resort industry, which is popular with overseas travelers and families.

Mr. Matsuzaki’s view is slightly different. The real goal of APA is something else,” he said.

The hot spring resort business is certainly a business with growth potential. If the hotel is renovated into a hotel with hot spring baths, the number of guests may increase. However, I think the real goal is something else. The key point is the change in top management, with founder Sotoshio Motoya stepping down as chairman in April 2010, and his eldest son Kazushi assuming the position of president and CEO.

The timing of the new organization was the formulation of a new medium-term five-year plan, and the company is trying to expand its business by strengthening its chain operations. Although APA has a strong image as a business hotel company, it is also a real estate company. By acquiring all the shares of the asset management company from Oedo Onsen, I think the aim is to acquire a new network of financing methods, such as ‘REITs,’ which use real estate to collect funds from investors,” he said.

Mr. Matsuzaki also predicts further developments.

APA is expanding its chain in North America and other regions, and may use its asset management company to embark on overseas expansion into Asia, the Middle East, and other regions.

APA has acquired a new network of funding sources. The rapidly growing hotel industry Gulliver is likely to gain even more momentum.