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Monday, 5 November, 2001, 15:16 GMT
Recession blues hit Japan's hoteliers
Japanese commuters
Tsuraya Hotel used to attract Toyko businessmen
By the BBC's Charles Scanlon in Atami, Japan

The comedian was doing his best in difficult circumstances and he did manage to get some laughs. But the occasion was more a funeral than a celebration, a farewell party for staff at a hotel gone bankrupt.

The Tsuraya Hotel in the spa town of Atami, south of Tokyo, used to welcome senior politicians and host corporate junkets.


This part of town used to be packed with holidaymakers

Mitsua Ono, hotel manager
But it was forced to close last week, adding 85 people to the ranks of Japan's growing unemployed.

New figures show unemployment is at a post-war high of 5.3% and getting worse every month.

Until recently many Japanese people had not felt the impact of the recession: prices have been falling while incomes had stayed even. But things are beginning to change.

"We did our best, we didn't do anything wrong," says the hotel's general manager, Mitsua Ono. "Why do we have to close?"

Changing times

These are the latest victims of an economy that seems in perpetual decline. The hotel employees must now look for new jobs. Mr Ono says he hasn't even started to look.

Map
"I have no words to say how I feel," he says. "This part of town used to be packed with holidaymakers.

"When I started here 35 years ago you could hear the clatter of clogs on the streets below. Now it's dead out there."

The Tsuraya Hotel pioneered tourism in Atami, once a fashionable hot spring resort. Now it has become the 16th hotel in the town to close down in the space of a few years.

The economic slump has meant a sharp decline in the number of high-paying corporate customers. The Tsuraya was also saddled with enormous debts dating from the collapse of the property market in 1990.

It is a deadly combination of debt and falling demand that is putting 1,500 Japanese companies out of business every week.

Aging visitors The tourists have not stopped coming to Atami altogether. A party of 70-year-olds files off a bus into a traditional Japanese inn nearby. They are here for a school reunion. They graduated in 1945.

Japanese office worker takes a break
Unemployment is at a post-war high in Japan
The hotel manager, Kanakio Morita, says customers are getting older and older.

"Competition is getting harder all the time," he says. "There are fewer customers and they spend less than they used to.

"We must provide superb service and reduce costs at the same time but I'm trying not to lay off any workers."

Later in the evening, the Class of '45 has unwound a little after a long soak in the communal bath. They are hitting the beer and sake with some enthusiasm.

Party evenings like this sustained many a salary man during the long years of the Japanese boom. But young people now prefer to go elsewhere for their entertainment and it is often cheaper to go overseas for a week than to spend a few days in a Japanese hotel.

The party is certainly coming to an end at the Tsuraya Hotel down the hill. The building will soon be demolished. It was once valued at $240m but the site has been sold for just 12m to a foreign investor.

It is the end of an era for Atami, just as it is for a national economy that once looked unstoppable.

See also:

21 Sep 01 | Asia-Pacific
Asia suffers tourism downturn
18 Sep 01 | Business
What now for tourism?
31 Aug 01 | Business
Sun sets on jobs for life
11 Jul 01 | Business
Osaka's universal ambitions
03 Sep 01 | Business
Japan will fight back
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