The Yomiuri Shimbun recently interviewed Seibu Holdings Inc. President and CEO Takashi Goto to hear his views about the impacts of the novel coronavirus pandemic on the management of his group of companies' operations, including railway and hotel businesses, as well as the government's responses to the virus crisis. The following are excerpts from the interview.
The Yomiuri Shimbun: Due to the coronavirus pandemic, the group's profits declined considerably in its business term that ended in March 2020.
Takashi Goto: We were affected overall in the hotel, leisure facility and railway businesses. It felt as if demand had "evaporated instantly." Foreign visitors, who had accounted for 25% of guests at Prince Hotels, dropped to almost nil in April. Of the 44 Prince Hotels, those except ones in Kioicho [in Chiyoda Ward, Tokyo] and elsewhere have been closed temporarily, while the occupancy rate, which stood at more than 70%, has plunged to as low as 5%.
According to a survey of consumers, "travel" overwhelmingly tops the lists of what they want to do. Since June 1, our hotels have been reopened sequentially. Resort hotels in Karuizawa and elsewhere are finally on a path for recovery.
We would like to resume operation of our hotels in Hawaii in July at the earliest, if the state's restrictions are lifted. The reservation rate is about 20% to 30% for now, but it will recover gradually.
Q: How will the management of your group change in response to the coronavirus crisis?
Goto: To respond to the heightening of guests' awareness toward safety and peace of mind, we have compiled and publicized our own hygiene guidelines for hotels. We would like to provide the highest level of safety and security services. By boosting domestic demand to begin with, we would like to appeal to the world that Japan "is a safe and peaceful country" through an overseas network of our hotels, including in the United States and Europe.
As a new business, I am considering providing a service that will hold weddings and receptions from remote locations by linking hotels in regional areas and Tokyo online.
Q: How do you assess the government's measures to respond to the coronavirus crisis?
Goto: It should be highly regarded that Japan's death toll from the virus is far lower than those of many foreign countries. The government has done a good job in compiling a menu of assistance measures calling for a huge amount of government spending, although it seems to lack in speed for implementation. I hope that assistance in raising funds and capital reinforcement measures will sustain upstream big businesses, and their ripple effects will reach local economies and small and midsize companies that have transactions with major companies.
Q: The Tokyo metropolitan government issued on June 2 what it dubbed a "Tokyo Alert" against a resurgence of coronavirus infections.
Goto: It is necessary to ingeniously strike a balance between prevention of infections and implementation of economic recovery measures. Economic losses should be prevented from expanding. It is necessary to be on alert, but I don't want see the alert level go back to "Step 0" [in the metropolitan government's four-stage road map for easing restrictions], which extensively calls for voluntary restraint on going out and business suspensions. A redeclaration of a state of emergency should be avoided by all means. The economy must stay afloat.
There are many cases of infections occurring in hospitals and entertainment districts. I think that infections can be brought under control if meticulous measures to deal with individual problems are taken by experts.
If economic activities and social life subside drastically, businesses will find it difficult to advance projects from a long- and medium-term perspective. An environment in which the future can be envisioned is necessary for business management.
Q: How can we cope with an era in which we must coexist with viruses?
Goto: There can be no alternative but to minimize the impacts of viral infections while maintaining a social life and aiming to regain normalcy in daily life. Tragically, there has been an increase in the number of people killing themselves due to coronavirus-caused stress they felt from prolonged stay-at-home situations. It is further imperative to avoid situations in which small and midsize companies collapse after earnestly complying with requests for voluntary restraint or closure.
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