[Exclusive Interview] How Hospitality Helps Advance Sleep Research
An interview with Mr. Hidetaka Yonemoto, Director of International Hotel Development, nine hours, Inc.
nine hours Inc. operates 13 capsule hotels and 7 other hotel brands nationwide in Japan. The company had been planning to expand overseas before the pandemic, and although the project was temporarily suspended, it has now been resumed. Last year, the company also launched a new business line focused on sleep research, adding a new layer of value amidst the drastically changing demand for business and capsule hotels in the city center of Japan. In this edition of TY Top Interview, we interviewed Hidetaka Yonemoto, Director of International Hotel Development to learn more about the company's evolution.
TrustYou: Could you tell us about yourself and your role at nine hours?
Hidetaka: nine hours has been operating for more than 10 years. I joined the company about three years ago. Our company planned to open hotels overseas before COVID-19. The pandemic came just when we were about to get started. We almost decided to open a hotel in Europe and were in talks with a local partner, but the plan was postponed.
We put overseas operations on hold and focused instead on our domestic business. I was in charge of all marketing operations for domestic hotels. Of course, this included managing online reputation, and I was the one who monitored reviews. My responsibilities go beyond marketing, I have also been involved in a variety of other tasks, such as improving the efficiency of hotel operations.
TrustYou: You must have been in the position of a "jack of all trades," making sure everything is done as quickly as possible.
Hidetaka: Yes, that's right. I just took action whenever it was needed. Things don’t move forward if you’re focusing solely on your role and the predefined responsibilities.
TrustYou: Why did you choose Europe for starting an overseas business?
Hidetaka: We chose Europe because we came across a European businessman who later became our partner. He stayed at our hotel from Japan, and he liked it so much that he wanted to meet us. We were pleased to see that he is a very talented and trustworthy businessman.
Hotels in major tourist cities in Europe are very expensive, even inexpensive hotels cost 140 EUR per night compared to Japan, so I thought that selling nine hours rooms for 50 to 60 EUR per night would be a viable solution. Since prices are originally high in major tourist cities in Europe, I think it would be a good match for nine hours.
TrustYou: Do you mean that you will not raise prices to suit the location?
Hidetaka: Of course, if a nearby hotel is selling rooms at 350 EUR per night, we might price ours at 200 EUR. It depends on the market. If the rate per night at a nearby hotel is about 150 EUR, we would be able to easily enter that market. On the other hand, if the hotel rate is less than 75 EUR per night like in Southeast Asia, it would be difficult for us to make a profit. Therefore, we believe it would be easier for us to sell in European cities where the cost of living is higher than in Tokyo. We are currently looking at major European cities for overseas expansion.
TrustYou: Japanese capsule hotels are of great interest to people overseas, and they are wonderful made-in-Japan products, so I think they would be a great fit.
Hidetaka: Little by little, the concept of capsule hotels is expanding overseas, but the actual number of hotels is still small. As for our company, we are thinking of opening a 100-room hotel, and we believe that this will be a viable business venture. This year and next year will be the hardest for us. We have been focusing solely on the domestic market for the past three years. Now we can finally get back on track.
Multitasking, Internal Communication, and Cleanliness During COVID-19
TrustYou: You mentioned that you had been focusing on marketing and overall operations at domestic facilities amid the considerable market changes over the past three years.
Hidetaka: Regarding public health measures at the facilities we operated, we always wondered how far we should go. There are so many measures that can be taken, but there is also the question of whether these measures reflect our brand. It was very difficult to balance the impact of public health measures on our brand culture with the need to save money.
Immediately after the COVID-19 outbreak, we decided to close our hotels. Shortly afterward we realized that our number one priority was to protect our full-time employees, therefore we reduced shift hours for our part-time employees. We also focused on improving communication with employees. For the rest of the time, we reviewed all cleaning and housekeeping procedures in our hotels.
TrustYou: Before this interview, we looked at reviews mentioning COVID-19. We found out that keywords such as "public health measures" and "social distance," had a huge impact on the average review score, with people giving lower reviews if these measures didn’t meet their standards. The keyword "cleanliness" received more attention than ever. Guests are now very concerned about dirt and dust in hotels, so I think that cleanliness and housekeeping remain a priority for guests.
Hidetaka: As for other efforts, I think we were always busy reviewing our website and OTA pages once again as a way to strengthen our presence. We had fewer guests, but we still had a lot of work to do.
Although it makes hiring more difficult, it is now the norm for the front desk and cleaning teams to share responsibilities and act as one team now.
TrustYou: Indeed, a time like this was the perfect opportunity for hotels to rethink what they have to offer. This must have created a lot of additional work. And since the number of business travelers decreased as well, the way you ran your business has also changed, hasn't it?
Hidetaka： Yes, the biggest change was to operate with only full-time employees. We reduced the labor costs, and we thoroughly multitasked, asking front desk staff to help with housekeeping chores. Before, the front desk duties were completely separated from housekeeping duties. Now we have redefined our responsibilities. Although it makes hiring more difficult, it is now the norm for the front desk and cleaning teams to share responsibilities and act as one team now.
We did this by listening to our staff and communicating with them to keep the morale high. Before COVID-19, our average room occupancy rate was above 90%, and we were so focused on what was in front of us that communication with employees was not our priority. The pandemic has brought us one positive thing - the chance to reevaluate the situation.
TrustYou: As employees gain a deeper understanding of other operational tasks, they become more aware of the bigger picture. I think this will give them a different perspective on customer service, especially when the number of guests will increase.
Hietaka: We introduced a business chat tool to communicate with our employees daily. With e-mail, it is sometimes difficult to know who needs to be included in the conversation. The chat tool made things easier. In this way, we were able to focus on multitasking and improving communication with employees.
TrustYou: We often hear the same thing from other hotels: they were always fully booked and busy until 2020. And then, suddenly, there were no more customers, and they had the opportunity to rethink the hotel operations and service itself.
What is The Sleep Research Project?
TrustYou: Please tell us about any new initiatives you had been working on during the pandemic.
Hidetaka: We have slightly moved away from the hotel business and are now focusing more on a new sleep research business. COVID-19 has accelerated our efforts in this area. In the hotel business, it is important to increase the number of outlets (properties) to boost sales, but we have made "sleep data" another pillar for the company and are currently nurturing that part of our business.
Our capsules are tubular beds that surround the body 360 degrees, and all of our hotels have the same capsule specifications. It is important to have the same environment when working with sleep data. The environment in which people sleep is different and has many variables, (e.g. quality of the mattress, the level of noise in the room, the number of persons sleeping in the room, etc.). Our capsules made the researchers curious because the specifications and environment are very well controlled. Our research capsules are equipped with sensors, sound-collecting microphones, and infrared cameras.
In our case, we are looking to collect precise data by increasing the number of sensors, and by collaborating with researchers. We analyze what kind of sleep patterns are beneficial and what kind of patterns are risky for health.
Our Akasaka location became "nine hours Akasaka Sleep Lab". We have already begun pilot operations, and plan to expand this project nationwide. Our company is making an upfront investment in this project.
TrustYou: That is a very interesting challenge. That seems like a project made for capsule hotels.
Hidetaka: That's right. This is a project that could only be done by a capsule hotel, so we see great potential for this project. The hotel business comes and goes, so our ultimate goal is to become a healthcare company. Ideally, we would like to provide healthcare services and have the hotel business as a support operation.
In a few years, I would like to be able to say, "Oh, they have hotels too, don't they?
TrustYou: Certainly, after the pandemic, we have heard in various places that relying on a single business line is risky. Businesses are thinking more than ever at intersectoral projects that would ensure more stability in case of a crisis.
Hidetaka: In the future, we would like to expand the data business not only in Japan but also overseas. Increasing the number of hotels is a priority, but it’s also essential to focus on another pillar. We’ll see if it works or not. I think it is important to take on challenges. If we can increase sales in the hotel business a little more, we will have more budget to invest in sleep research, and I hope that will happen.
Integrating Positive and Negative Feedback on the Hotel's Website
TrustYou: In other words, you are focusing first on the hotel business, which is right in front of you, while taking on new business challenges at the same time. How do you think TrustYou can help?
Hidetaka: The TrustYou feature that we use the most is the alert email function. When we receive negative reviews, we read them carefully, first to make sure that the reviewer and the feedback given are trustworthy. This determines whether we will make improvements based on the issues flagged.
Alert emails are sent to all hotel managers, so you can also see reviews from hotels other than your own. I do not read the positive reviews that appear below the negative ones.
TrustYou: As you say, we naturally pay more attention to negative reviews. On the other hand, a positive review is a sign of great service and quality, and a good motivator for the staff to keep up the good work.
Hidetaka: Using TrustYou’s Meta-Review, we can feature reviews on our website. Many overseas e-commerce websites post Google reviews. As an example, UNIQLO (a Japanese global fast fashion brand) is now displaying both positive and negative reviews on its website. We wanted to do the same thing, and when we learned that TrustYou's functionality could do it, we implemented it.
We use TrustYou because we wanted to boost the number of direct bookings. Not only the headquarters, but also branch hotels that are effectively using the system, and they are replying to reviews via TrustYou.
TrustYou: We are indeed in the age of transparency. Displaying positive reviews is not enough. If a guest does not choose a hotel based on an understanding of both positive and negative reviews, there will be a large gap between his/her expectations and reality. The review score is created based on the customer's expectations and experience.
Hidetaka: That's right. If we don't show both positive and negative reviews, travelers will be more likely to book via OTAs. We use TrustYou because we wanted to boost the number of direct bookings. Not only the headquarters, but also branch hotels that are effectively using the system, and they are replying to reviews via TrustYou.
When looking for options to expand overseas, we took into account the review performance of similar hotels in the area. We looked at properties similar to capsule hotels and confirmed what was well received and what was not. Also, since we are offering contactless check-in (using vending machines or smartphones), we looked into whether it would work overseas as well. We also learned that it would be difficult to introduce contactless check-in without some adaptations. In the future, we will continue to use the system as a benchmark to explore whether complete contactless check-in is feasible in other markets.
In addition, our hotel has lounges (open public spaces) for customers, and there was a problem with noise coming out from these areas. We actively distributed earplugs and checked TrustYou Sentiment Scores related to noise to monitor changes. In our case, we check the scores (numerical values) of each property and compare them to the hypothesis we originally developed.
TrustYou: Comparison is essential when looking to improve services. In our platform, chain hotels can see the same indicators (score) within the hotels of the same brand. That’s crucial for building a consistent brand voice.
Hidetaka: We do make side-by-side comparisons for our hotels. When we were actively opening new hotels, we looked at various reviews, such as lounges, number of chairs, word-of-mouth about lockers, and so on. When meeting with architects, I would also look at the reviews and give feedback related to design, furniture, etc. As for the soft aspects, we try to keep the guest experience consistent so that there are as few differences as possible.
TrustYou: We heard that the employees worked hard on improving housekeeping in the last 2 years. We believe they will be very happy to see that their efforts are also reflected in the Overall Score. Please compare the results with the past scores and word-of-mouth comments, and share them with your employees.
Hidetaka: That's a good idea. I will incorporate that. We also send a thank you email and a post-stay questionnaire to our guests who booked directly with us. The evaluation score from customers who book directly through our website is very good and we aim at improving the score even further.
TrustYou: Is there anything else your company is planning to do in the future?
Hidetaka: I think it is important to work steadily and step by step on what we have not been able to accomplish so far, rather than making big efforts. We are trying to educate people within the company to do one thing at a time, carefully and properly. Of course, it would be good if we could get the occupancy rate back up to 90%. In terms of steady and careful efforts, I would like to focus on how to promote the sleep research project.
TrustYou: In this regard, it might be a good idea to create a questionnaire (survey) for guests who have been involved in sleep research. Publishing these online reviews and letting others know about the project will increase awareness.
Hidetaka: Definitely, we want to increase awareness. We would also like to attract a new segment of customers who stay not for lodging but sleep research. To this end, we will have to show our skills in how to present interesting data to our customers. The data that researchers are looking for and the data that guests are looking for can differ, so we’ll have to work on how we make the data interesting, and we will also consider conducting surveys.
TrustYou: I think the TrustYou Survey and the Google push function are very useful, and I hope you will continue to use them in the future. Thank you very much for speaking to us today.
nine hours official website: https://ninehours.co.jp/
An excerpt of the article was translated into English.
Original Article in Japanese: https://www.trustyoujapan.com/post/ninehours_july2022
About nine hours: https://ninehours.co.jp/company