Hoshino Resorts opens its first Yamagata ryokan, KAI Zao, the 26th in its KAI brand
Hoshino Resorts opened KAI Zao in Yamagata's Zao Onsen on October 15, the 26th property in its onsen-ryokan brand and the third built through the company's dedicated tourism investment fund -- a sign the fund-backed model is becoming Hoshino's standard route into a new prefecture, not a one-off arrangement.
Hoshino Resorts opened KAI Zao on October 15, its first property in Yamagata Prefecture and the 26th in the company's nationwide KAI brand of onsen ryokan, according to the operator's own announcement. The 49-room property sits in Zao Onsen, about 40 minutes by car from JR Yamagata Station, with rates starting from ¥31,000 per person for two sharing a room, inclusive of tax, service charge, dinner and breakfast.
The building is a 14-sided tower designed by architect Shuhei Kamiya, arranged so guests move through shifting views as they pass between floors of guest rooms, a bathhouse and a rooftop wellness area; Kamiya said the design was built around Zao's own culture, climate and local character, and the rooftop hot tub is shaped to echo the Okama crater lake on the mountain above the town.
The onsen itself, a strongly acidic sulfur spring, is served in three concentrations -- a preparation bath, a 50% acclimation bath and a full-strength, continuously flowing 100% bath -- a staged format meant to ease guests into the spring's stronger mineral content. Dinner centres on "Benibana Sansai Kaiseki," a shojin-inspired (Buddhist vegetarian) tasting menu drawing on Yamagata's safflower-merchant hospitality tradition, built around a hot pot of Japanese parsley, five types of wild mushroom and duck, its broth enriched with mitten crab.
KAI Zao is the third property financed through the Hoshino Resorts Tourism Activation Fund, the investment vehicle Hoshino set up with Risa Partners in October 2020, following KAI Okuhida in Gifu and KAI Akiu in Miyagi. The arrangement lets Hoshino keep adding to its directly run KAI portfolio -- positioned between its budget OMO brand and its luxury Hoshinoya line -- without carrying every new ryokan on its own balance sheet.
That the fund's third project doubles as the brand's first Yamagata property suggests fund financing has become Hoshino's default route into a new prefecture, rather than a one-off arrangement reserved for its first two builds.