I had heard of this famous inn, but never visited, of course. Every business, in every country, will soon be part of the same mega-corps soon enough. I just hope it isn't in my lifetime.
WSJ.com - How a Japanese Inn, A Favorite of Royalty, Fell to Foreigners
For nearly four centuries, Shunjiro Nagai's family jealously guarded the hot-spring water running through this remote spa resort in central Japan. The prized mineral water flowed into the cedar bathtubs in the village's traditional inns, or ryokan, delighting guests coming for a relaxing soak. As the head of the village's spring-water cooperative, the 61-year-old Mr. Nagai had an important mission: To keep the water exclusively in the hands of his family and 10 other families running the village's oldest inns, barring any outsiders.
Then last year, an indebted neighbor's inn called Shiroganeya, or White Silver Inn, was put on the block, giving a potential outsider access to the sacred water discovered by a high priest in the eighth century. The top bidder was “foreign capital” with a name Mr. Nagai barely recognized: Goldman Sachs Group Inc.
After plotting for months to drive out the foreigner and threatening to sue, Mr. Nagai did something he had never dreamed he would do: For the good of the village, he persuaded his neighbors to accept the outsider's bid for the inn and its mineral water.
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Mr. Nagai then set out to persuade the others to accept Mr. Hoshino. He told the villagers that Goldman was simply a bank that provided financing to Mr. Hoshino, whom everybody already liked. In fact, Goldman was the sole provider of funds, and Mr. Hoshino's role was to manage the property. But “it was much easier to understand if it was explained this way,” Mr. Nagai says.
A few months later, the innkeepers finally came around, on one condition. They still couldn't bear the thought of selling the water rights to outsiders. So they offered to “lend” the rights to Mr. Hoshino's company, allowing Shiroganeya to fill its bathtubs. Goldman and Mr. Hoshino finally signed the deal in March, eight months after they first looked at Shiroganeya. The price was ultimately reduced to $2.2 million because water rights were merely leased. The inn is scheduled to reopen under its new ownership next month.
Goldman bankers say they aren't discouraged by the challenges of acquiring Shiroganeya. “Breaking new ground in a traditional sector of Japan takes time and patience,” says Shigeki Kiritani, managing director in Goldman's strategic investment group in Tokyo. Over the next few years, the bank hopes to acquire some 50 inns throughout Japan, which Mr. Hoshino's company will manage.
In Yamashiro, Mr. Nagai is watching quietly as Shiroganeya's renovation moves forward. Meanwhile, other signs of Western-style capitalism are cropping up. A new discount hotel offers a package of a room and two meals for $90 per person, about half the price of other inns. The largest inn in town, called Hyakumangoku, recently said it was negotiating a management tie-up with Ramada International, a unit of Cendant Hotel Group of Parsippany, N.J. The deal would make it the first global hotel chain in Yamashiro Onsen.
