Students drive turnaround in city inn profits

FUKUI — Packing in students has led to big profits for an inexpensive inn run by the Fukui Municipal Government that was teetering on bankruptcy.

The price is right: Members of the Gifu Shotoku Gakuen University tennis club have a meal outside a Fukui inn where their stay was subsidized by the municipal government. KYODO PHOTO

"Students are not influenced by economic trends, and as five or six of them stay in one room, the profit rate is higher than individual tourists," said Eiji Nakanishi, sales director at Nihon Travel Center Co. in Osaka.

With subsidies given to students from local governments to stay at inns and hotels for their club camps, others are hoping for success stories like the one in Fukui — which went back to the black in just 12 months after years of deficits.

"Students can possibly become a 'white knight' for the travel industry," a local government official said.

Fukui's 22-room Takasusou inn had chalked up an annual deficit of tens of millions of yen for several years until October 2005, when the municipal government asked a local private enterprise to run it. The company went after students looking for places for their camps.

About 1,400 students stayed at the inn in the first year, and it raked in a profit of ¥1 million. The number now is around 2,000, with tens of millions of yen in profit annually.

"Every inn is busy until the Bon festival (in mid-August)," said Koichi Kitano, president of the F&E Group, which runs the inn. "The problem is the off-season after Bon and September. University students' club camps with their long summer holidays are well-suited to that period. There's also money to be made from such student plans throughout the year."

Other local governments have also been looking to students. At least 14 prefectural and municipal governments are extending subsidies for accommodation fees for student groups from other prefectures.

The Toyama Prefectural Government attracted about 1,300 students in the three months starting last April.

"As there was a rush of applications, we doubled the budget, but didn't have any leeway. There were also a lot of applications from the University of Tsukuba and universities in the Kansai region," Yoichi Okada, a regional promotion official, said.

The Karatsu Municipal Government in Saga Prefecture, the Satsumasendai government in Kagoshima Prefecture and the Yaizu government in Shizuoka Prefecture, among others, started extending subsidies in fiscal 2009 and are already seeing the effects.

The municipal government of Sado in Niigata Prefecture, with its more than 30 noh stages and love of performing arts, wants to bring in students for the profits and also to enliven the region.