Aussies running network of love hotels in Japan

MELBOURNE - A former head of Tourism Australia in Asia has revealed that he has been running a network of love hotels in Japan.

According to the Australian, Greig McAllan, has spent many years in Japan during his 20-year stint with Tourism Australia and the Australian Tourism Commission.

For him, getting a foothold among the country’s 25,000 love hotels was too good an opportunity to pass up, and he acknowledges that he is one of a handful of foreigners working in a uniquely Japanese industry

He and his business partner, fellow Australian Miro Mijatovic, have managed to carve out strong returns in a country that’s being increasingly forsaken as an investment destination because of its stagnant economy.

Love hotels, which provide rooms for rent for amorous couples who lack privacy at home, are something quintessentially Japanese, which visitors to the country tend to titter about.

But it’s serious business for McAllan and Mijatovic’s company, Alchemy Japan, and for ordinary Japanese citizens.

Alchemy Japan has grown from one hotel in 2006 to the fifth-largest operator in the country. Reaching that milestone with just 15 hotels shows how fragmented the industry is.

McAllan, 53, says most are owned and operated by individual Japanese, and standards and practices can vary widely.

Some of the hotels offer Batman and Robin, Disneyland and Winnie the Pooh themes, as well as mirrored ceilings, outlandish beds and spas, and darker sadomasochistic themes, which attract the most interest.

But he says most, including Alchemy’s, are more far more utilitarian versions designed to fulfil the needs of average Japanese couples.

McAllan says the hotels are highly profitable, generating net operating income margins of up to 50 percent (excluding cost of finance, fees, maintenance and tax), making them an attractive investment.

The rooms rent for between Y2000 and Y5000 for the minimum time of 90 minutes, and are typically turned over 2.5 times a day during the week and 4.5 times a day on weekends.

“Room for room, we get more for our rooms than a five-star would get for their rooms, without any of the overheads,” the Herald Sun quoted him as saying.

He says he loves the job, enjoys working with a dedicated and motivated Japanese staff and is confident about the company’s success in an industry where demand is certainly not about to dry up. (ANI)