"Somehow hanging in there" is actually the most honest management report

"Somehow hanging in there" is actually the most honest management report.

"How are things going lately?" As a business owner, this is a greeting I am asked many times a day. And I am always unable to answer this question well. If I say, "Thanks to you, things are going well," it would be a lie, and if I say, "Well, it's tough," it would cause worry. In the end, the same words always come out of my mouth: "Somehow, I'm hanging in there."

For a long time, I thought this phrase, "somehow I'm hanging in there," was an uncool response. It's an indecisive report that can't be called good, nor can it be called bad. However, my thinking has changed recently. I've come to believe that this is the most honest report a person standing on the front lines of management can give.

The trigger for this was putting ten years of our hotel's data into a single graph. Today, while looking at that graph, I would like to write honestly about what it actually means to "hang in there."

A single graph showed me that I had been "hanging in there"

I plotted the number of guests and sales trends since the opening of Ogal Inn, which we operate in Shiwa Town, Iwate Prefecture, into a single line. In the public eye, Ogal is often introduced as a success story. However, when I looked at that line, the first thing that welled up in me was not pride, but simply relief, thinking, "Ah, we really survived that valley."

The line is by no means a straight upward slope. It formed a peak a few years after opening, then dropped to the bottom of a valley in one go, and took a long time to crawl back up, stumbling along. It is not a success story of a clean V-shaped recovery at all. What the graph depicted was not a story of growth, but a record of the time we spent hanging in there.

At the bottom of the valley, the number of guests vanished by 30%

The deepest valley was in the 2020 fiscal year. As you know, that was the year that infectious disease brought the world to a halt.

Let me state it in numbers. The number of overnight guests, which reached about 22,000 in our peak year, dropped to just over 13,800 in fiscal 2020. Even compared to the early years of operation (about 19,900), which I use as a benchmark, nearly 30% of our guests literally vanished. Sales also sank by nearly 30% in the same year. For a small hotel in a rural area, losing 30% of your guests is almost the same as not being able to breathe.

During those two years, I was truly terrified to look at the monthly numbers. I have never felt the phrase "the future is dark" so physically. While staring at my cash flow statement, I calculated almost every night whether we could avoid extinguishing this flame next month.

"A 30% decrease" was actually among the best in the country

However, later on, when I compared it with the national figures, I felt a little saved. Do you know how much the lodging industry across Japan sank in that year of 2020?

According to statistics from the Japan Tourism Agency, the total number of overnight stays nationwide in 2020 was down by approximately 43% compared to the previous year. Looking at March alone, sales in the lodging industry vanished by 53%. Hotels that relied on urban areas and inbound tourism were particularly miserable; in Tokyo, room sales in April were down by approximately 90% compared to the previous year, and the occupancy rate of city hotels temporarily sank to the 10% to 20% range. The number of bankruptcies in the lodging industry swelled to 1.5 times that of the previous year in that year alone.

In the midst of that storm, our decline was about 30% in guest numbers and about 30% in sales. Since the national average was a 43% decrease, it means we held our ground by 13 points. While city hotels were losing 90%, we hung in there at 30%. This does not mean our wounds were shallow. In an industry where demand itself had vanished from the world, it was the result of us desperately pulling in other demand ourselves, rather than waiting for someone to give it to us.

The move we made at the bottom of the valley was "attracting training camps"