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NIPPONIA HOTEL OZU — A stay in the castle town—

・\87,700 per room for 2 persons with breakfast and dinner, try-onarmor experience and a guided tour of the castle
*The tour will be held during the normal public opening hours of thecastle
*This plan is only available on Sunday and weekdays, not onSaturday, a day before a holiday, and during special holidays (TheNew Year, Golden Week, Obon holidays etc.)
*Or select any day except special holidays (The New Year, GoldenWeek, Obon holidays etc.) for \96,700.

NIPPONIA HOTEL OZU — A stay in the castle town—

Castle Stay at Ozu Castle

・\1,287,000 per room for 2 persons with breakfast and dinner
*Available from the middle of March to the end of November exceptAugust (limited to 30 stays per year)

NIPPONIA HOTEL OZU — A stay in the castle town—

NIPPONIA HOTEL OZU — A stay in the castle town—

The Japan Times Original Plan

jun 22, 2021

Let’s support Value Management that helps historic buildings andtowns earn to sustain itself

Among the more than 200 cases of utilizing historic facilities that Value Management has engaged in, the most prominent one lets visitors spend a night at a castle: Ozu Castle in Ehime Prefecture.

Not a few European castles have been renovated into hotels, but Japanese castles had been open only for viewing. Some let visitors enter, and even ascend their tenshukaku main tower, but one could only imagine what living in a castle would be like by touring the parts open to the public or watching TV shows.

Ozu Castle is the first castle in Japan where one can stay overnight in a restored wooden main tower. How did Value Management realize this service offering an opportunity to experience history and imagine oneself the lord of the castle? What is the mission of its CEO, Jun Tarikino, who is dedicated to saving cultural inheritance through utilizing historic assets?

Articles published in The Japan Times Online

Value Management CEO Jun Tarikino (left) and Satoyama Consortium secretariat chief Yuto Yoshida at the Satoyama Cafe online session held on Nov. 30 | THE JAPAN TIMES

Living history: You could spend a night in a castle

Feb 12, 2021

Although castles are one of Japan’s most popular tourist destinations, not many people know you can actually spend a night in a 400-year-old castle...
Read more

Handing down to the future

Tarikino was born in Nagasaki on Aug. 9 — the date on which an atomic bomb was dropped on the city decades before he was born — and brought up in Kobe. His grandfather had served in the navy and told him about his tragic wartime experiences, which made him think about the war and things that had been lost because of the war.

In 1995, when he was 21, he experienced the Great Hanshin Earthquake and realized that “what is taken for granted today cannot be taken for granted tomorrow.” However, some things survive that narrowly escaped destruction or that people managed to preserve with desperate resolution even during disasters and wars. There are also historic towns and buildings that were destroyed in an instant but have been rebuilt or repaired.

Tarikino wondered about how these valuable assets could be handed down to future generations, but still just 21 when the Kobe disaster happened, he had neither the time nor the experience to turn his awareness into a business. That is why he entered Recruit Co. after graduating from university. There he became involved in projects including the bridal magazine Zexy and gained experience in the hotel and other service sectors while learning how to grasp the needs of society.

Tarikino applied these experiences in creating Value Management, which monetizes historic buildings and resources. Since its foundation in 2005, a decade after the earthquake, Value Management has been preserving historic buildings and surrounding towns throughout Japan in self-supporting and sustainable ways.

The state of historic buildings

There are said to be about 1.5 million historic buildings in Japan. Most are owned by private citizens, the public sector, or temples and shrines. Each has financial difficulties. Private owners face issues of repair and maintenance costs as well as property taxes, making it uncertain if future generations can maintain the assets. It is becoming increasingly difficult for the public sector to raise money for preservation, due to depopulation. Temples and shrines are similarly suffering from decreasing numbers of parishioners.

Tarikino concluded that the money to cover the costs of maintaining a historic building should be generated by the building itself — that historic assets could be self-sustainable. Some publicly owned historic buildings had already been utilized by the private sector, but in most cases, the owners covered operational costs. However, more sustainable preservation can be achieved if a building operated by the private sector generates a profit, allowing the owner to use the money for repairs and maintenance without needing to ask for help.

If nothing is done, many historic buildings face the risk of becoming vacant, abandoned or demolished in the near future. To avoid that, historic buildings need to be operated in a away that enables monetization — this is where Value Management takes the initiative.

Ideas for preservation

To begin with, Value Management launched projects to give new life to historic buildings as wedding and banquet halls, taking advantage of Tarikino’s experiences in his previous job. For example, a registered tangible cultural property was renovated into a complex of wedding halls, banquet rooms and restaurants named the Funatsuru Kyoto Kamogawa Resort. The building, with historic ambiance and overlooking the Kamo-gawa river, used to be a Japanese-style restaurant and hotel, with about 150 years of history. The company also made the Nishio family residence in Hyogo Prefecture, built in a European style in 1919 and later designated as a cultural asset, into a banquet venue and restaurant that can also be used for weddings.

However, this method has its own limitations. Many historic urban buildings were built for commercial purposes and are spacious, making them easier to operate now with high profitability. On the other hand, those in the countryside are typically smaller, with a lower chance of making enough profit, and suffer from having only a small population in their area.

To overcome this, Tarikino came up with the idea of treating a whole town as a product and monetizing it. “A town consists of a series of buildings. Monetizing one building may not be profitable, but 10 of them together will increase the chances,” Tarikino said. Even a rural town with historic buildings can be revitalized if it can provide not only special places such as wedding halls and restaurants for local residents but also facilities to attract people from the outside. This is how Value Management has worked with various communities, and the castle town of Ozu is one of them.

Let us take a closer look at the case of Ozu, which has attracted international media attention.

Utilizing an entire town

Ozu, located south of Matsuyama in Ehime Prefecture, is a small town with a population of about 42,000 people, but it has a lot of important cultural assets and tangible cultural assets designated by the national and local governments. Value Management drew up a plan to create a cycle of attracting visitors to this place — which originally was not a tourist destination — thus increasing income from tourism and generating financial resources to preserve the historic townscape. The plan aimed to make Ozu into a travel destination by utilizing many of its historic buildings — including Ozu Castle and the Garyu Sanso villa, another national important cultural asset — as hotels and restaurants. By having a number of potential travel destinations dispersed across the community, visitors would naturally roam around the town, resulting in longer stays and higher spending.

To realize such a project, it is essential to have the support of the local government, financial institutions and residents. “The budget of the local government is enough to repair cultural assets, but we need investment funds and loans to operate them for commercial purposes,” Tarikino said. The importance of involving the whole town is evident in procuring funding. It would not be easy to convince financial institutions to provide loans for turning a building into a tourist facility in a place that is not a tourist site. In the case of Ozu, the local government, financial institutions and residents participated in planning how they wanted the town to be, determined the amount and use of the funds as well as the yield, then created an investment fund with the Organization for Promoting Urban Development and the Iyo Bank. This way, the financial institutions' risks could be minimized because they were investing in or providing loans to a clear revenue model.

The monetization of the town involves three organizations. The Kita Co. — named after Kita-gumi, an Ozu trade body that exported wax during the Meiji Era — engages in the repair, rental and management of buildings. Value Management operates each facility. Kita Management — a nonprofit launched solely for this project — plays the role of a DMO (destination management organization) that manages the whole town. “We outsiders should play the role of making and operating tourist attractions and connect residents and visitors. The participation of local people, including those in the local governments and financial sector as well as residents, is a must to turn all the visitors into great fans of the town itself by the time they leave,” Tarikino said.

There is one more trick in the utilization of historic buildings in Ozu. Both Ozu Castle and the Garyu Sanso villa are cultural assets that are open to the public from 9 a.m. to 5 p.m. This does not mean these facilities cannot be used for other purposes at other times. At Ozu Castle, overnight guests check in at a different building and enjoy seeing the town until they can enter at 6 p.m., an hour after the castle is closed to the public, to allow time to prepare for them. At 6 p.m., a parade at the entrance with firearm and banner units starts, and during the evening kagura Shinto music and dance — a prefectural intangible folk cultural asset — and dinner can be enjoyed. Guests leave the castle early in the morning to have breakfast at the Garyu Sanso villa by 9 a.m., when the villa opens to the public.

Monetizing towns: the future

The case of Ozu is full of ideas that can be used to preserve historic buildings and towns in many other parts of Japan. “It is challenging to start something new from scratch, so I think it is better to adjust as necessary a model that has proved successful in one area to apply to another area. To do this, we are committed to creating business models that are reproducible,” Tarikino said.

Value Management has monetized more than 50 buildings and multiple districts, steadily accumulating achievements. Last year, sales dropped to less than 60% of the previous year’s due to the COVID-19 pandemic because its business comes from services, restaurants and tourism. Still, Value Management has survived with a firm determination to not discharge any of its approximately 1,000 employees. Although the national Go To Travel promotional campaign had significant effects, the pandemic's impact on MICE-related opportunities (meetings, incentives, conferences and exhibitions) plus corporate events and inbound tourism has been grave, and it will take more time for things to get back to normal. Looking forward to the time when historic towns and buildings that Value Management and local people have preserved will again be full of people traveling to taste different cultures, The Japan Times will continue to follow the efforts of Value Management with you.