NEW YORK CITY—APA Hotel & Resorts, which claims to operate the largest hotel chain in Japan, has opened the first of a planned 100 hotels in the U.S. in Woodbridge, New Jersey. The 200-room property, a conversion from a Hilton Hotels & Resorts-branded property, is part of a three-year joint venture with developer Friendwell Group of Companies, a major owner of hotels in New Jersey.
At a 12 November news conference in New York City, Toshio Motoya, founder of APA Group, said, “We will start slowly as far as developing but will then move faster toward our goal. We are considering New York City, which is a suitable market for us. Our new urban hotel concept would work well there.”
Initial development, according to Jason Cheng, CEO of Friendwell, would be “in cities serviced by Japan Airlines like New York; Boston; Washington, D.C.; San Francisco; Los Angeles; Houston; and Chicago.” The Woodbridge hotel will undergo extensive renovation with public areas to be completed by summer 2016 and all guestrooms by spring of 2017.
In Japan, APA mostly had been in an ownership position but has moved more to franchising in recent years. The three-year joint venture with Friendwell provides the option for renewal—or allows APA to seek other partners after that time.
The joint venture, called APA Hotel Franchise, is based in Delaware.
A new urban concept
His “new urban hotel” concept, Motoya said, will “revolutionize” the industry in the U.S. through its introduction of a prototype that offers “compact” rooms but focuses on energy and water savings that result in carbon emissions a third of those of the typical city hotel and with profit margins of 30%, partially through cost savings on energy.
Those targets are viable for new builds but would be lower for conversions, APA’s founder said.
Noting the trend toward saving energy, he added, “Prius is more popular than Cadillac, and the 787 plane and regional jets are replacing 747s.”
APA hotels typically include water-saving oval tubs with thermal and volume regulation rain stoppers to save energy and water. Rooms are equipped with keycard activated energy savings switches and LED lighting, reinforced with environmentally friendly standard operating procedures.
Another focus, Motoya said, is functionality. “For example, all power switches are accessible from the bed.”
Less important are spacious guestrooms. “We have had complaints that our rooms are small,” Motoya said, “but they are small by intention. We make things big that are important—like large beds and 50-inch televisions. Our research shows that most of our guests check in, drop their bags and return only to go to sleep, so the size of the room is not crucial.”
In larger hotels there will be a traditional Japanese bathhouse, he added.
Meet the players
APA has 347 hotels and 56,700 rooms in Japan, including partner hotels operated for other brands. There are 47 hotels with 11,365 rooms under the APA brand in Tokyo alone. In the past year, 59 hotels and 6,200 rooms were added to the APA Hotel network; of those 13 were under the APA flag. They included large hotels like the APA Hotel Shinjuku Kabukicho Tower with 620 rooms and APA Hotel Shinagawa Sengakuji with 563 rooms.
APA also plans to build Japan’s largest hotel: the 2,400-room APA Hotel & Resort Yokohama Bay Town by 2020 when Japan will be hosting the Olympics.
Motoya’s goal is to have 100,000 rooms in the APA Hotel network worldwide by 2020.
According to Motoya, the company will have $750 million in sales this year with a profit of $230 million. The network has an APA Card loyalty program that claims almost 10 million members.
APA has a unique approach to staffing. “I have traveled to 81 countries and found that hotel staff treat guests as their masters,” he said. “I wanted to create a new philosophy where our staff and guests are equals and treat each other with pride.” A team of “personal assistants” are available around the clock to assist guests with their requests.
Motoya said that APA Group “has never operated at a loss or dismissed an employee over the 44 years since its founding.”
Friendwell is a family-owned company that started in Taiwan. Among other real estate assets, it owns 13 hotels and 3,300 rooms in New Jersey, mostly in central New Jersey. It owns hotels branded by Holiday Inn, Crowne Plaza and Hilton, among others.