Fukushima's Iconic Spa Resort Hawaiians Acquired by US Private Equity Firm Amidst ¥28 Billion Debt

Acquisition Marks New Chapter for Fukushima Landmark

Spa Resort Hawaiians, a beloved tropical-themed resort located in Iwaki, Fukushima Prefecture, has been acquired by the US private equity firm Fortress Investment Group. The acquisition comes as the resort, operated by Joban Kosan, grappled with a substantial debt burden of approximately 28 billion yen, accumulated from the devastating impacts of the 2011 Great East Japan Earthquake and the subsequent COVID-19 pandemic.

Fortress Investment Group initiated the takeover process in November, gradually increasing its stake in Joban Kosan to surpass 85 percent, thereby solidifying control over the iconic facility. The acquisition of Joban Kosan was valued at approximately $98 million, equivalent to about 14 billion yen.

A Legacy Under Strain: From Coal Mine to 'Japan's Hawaii'

Opened in 1966 as the Joban Hawaiian Center, Spa Resort Hawaiians emerged from the declining coal mining industry in Iwaki, transforming the region's hot springs into a unique leisure destination. It quickly earned the moniker 'Japan's Hawaii' and became famous for its indoor water park, featuring Japan's tallest water slide, and its celebrated Hula Girls dance troupe, which performs three times daily. The resort typically attracts around one million visitors annually, serving as a significant tourist draw for the Fukushima region.

Disasters and Pandemic Fuel Financial Crisis

The resort's financial difficulties were exacerbated by two major crises. The March 2011 Great East Japan Earthquake caused extensive damage, forcing Spa Resort Hawaiians to close for more than six months. Although it reopened in February 2012, the subsequent years brought new challenges. The COVID-19 pandemic led to another three-month closure and a significant downturn in tourist demand, resulting in Joban Kosan reporting a net loss for four consecutive years through March 2022. These combined events left the company with its considerable 28 billion yen in liabilities, alongside the need for new investments to address aging facilities.

Fortress's Vision for Revitalization

Fortress Investment Group, a US private equity firm managing over 7 trillion yen in assets, has a clear strategy for the resort's future. Shunsuke Yamamoto, a Fortress executive, stated that the aim is 'genuine revitalization' and a 'bold transformation' to ensure the resort's longevity. The firm plans to make large-scale investments in facility upgrades, revise pricing strategies—including eliminating discount plans and adopting seasonal variable pricing—and focus on attracting more international visitors. Fortress will also leverage its subsidiary, Accordia Golf, to manage Joban Kosan's golf courses, aiming to reduce operational costs through centralized purchasing. This acquisition follows Fortress's recent investments in other Japanese leisure properties, including the Phoenix Seagaia Resort in Miyazaki in May 2024 and the department store operator Sogo & Seibu Co. in 2023.

Outlook for a Reimagined Destination

The acquisition by Fortress Investment Group signals a pivotal moment for Spa Resort Hawaiians. With new capital and strategic direction, the resort aims to overcome its financial challenges and enhance its appeal to a broader audience, both domestic and international. The move is expected to bring much-needed revitalization to the long-standing Fukushima landmark, ensuring its continued role as a significant tourist destination.