Foreign Fund Moves to Revive Japanese Resort

Located in Iwaki, Fukushima Prefecture, Spa Resort Hawaiians is a sprawling leisure complex known for its tropical atmosphere, large-scale pools, and water slides, including one with a 40-meter drop, the largest in Japan. The resort attracts around one million visitors annually as a family-friendly destination where guests can experience a taste of Hawaii without leaving the country. One of its main attractions is the hula dance show performed three times daily by a troupe of 43 dancers, a tradition that has become synonymous with the resort’s identity.

The facility is operated by Joban Kosan, a local company that will mark the resort’s 60th anniversary next year. Its current president, Sekine, who is from the local area, said the resort has deep personal meaning for many residents, recalling how it served as a place of family memories for those who could not afford overseas travel. However, behind its cheerful image, the business has faced mounting financial pressure.

The turning point came in March 2011, when the Great East Japan Earthquake inflicted severe damage on the facility, forcing it to shut down for an extended period. That blow was followed years later by the COVID-19 pandemic, which led to roughly three months of closure and prolonged losses. As a result, the company accumulated approximately 28 billion yen in debt. Aging facilities further complicated matters, making it difficult to invest in renovations while maintaining operations.

Against this backdrop, Fortress moved in. In November last year, the firm began acquiring shares in Joban Kosan and soon secured more than 85 percent ownership. Fortress, which manages assets totaling more than 7 trillion yen, has been actively expanding its presence in Japan. It drew widespread attention in 2023 with its acquisition of Sogo & Seibu, and has since positioned itself as a major player in revitalizing underperforming Japanese assets.

Yamamoto Shunsuke, who is leading the Hawaiians project for Fortress, said the resort’s long-term survival would be difficult under its previous financial structure. He noted that Japanese travelers have become increasingly familiar with overseas resorts, making it necessary to rethink the facility’s concept if it is to remain competitive over the next 50 to 60 years.

Fortress is no stranger to resort redevelopment. The firm previously acquired Phoenix Seagaia Resort in Miyazaki, once a symbol of Japan’s bubble-era excess, and shifted its strategy toward a family-oriented destination. The company has also rebuilt numerous struggling hotels nationwide, including the Kamenoi Hotel chain, improving occupancy rates and restoring profitability through large-scale investment and operational reforms.

At Hawaiians, Fortress has already begun detailed inspections of the site, examining everything from the entrance layout to dining facilities. Yamamoto, who once traveled the world as a backpacker and later worked at a foreign securities firm before joining Fortress, says his goal is to create resorts that fully utilize their unique characteristics rather than relying on superficial renovations. His vision includes bold capital investment and a reimagining of how guests experience leisure in Japan.

Still, the changes bring unease. Employees and local residents have expressed concern over whether the resort’s long history and cultural identity can be preserved amid sweeping reforms. Many fear that the spirit built over decades could be lost in the push for profitability.

Fortress, however, insists that its aim is long-term sustainability. The firm has already acquired more than 180 hotel and resort properties nationwide, making it one of the largest players in the industry. Its strategy centers on reviving neglected facilities through targeted investment, improved operations, and a clearer market focus.

Source: テレ東BIZ