10 business lessons from Japan’s top 10 hot springs

Japan is home to 110 active volcanoes. At times it feels a bit like Japan’s seat on the ring of fire is that one spot on a boiling pot that sets the lid dancing the most. So, perhaps it is fitting that the geothermal festival that is Japan also offers the perfect antidote to the stresses that are inherent to life in this island nation. That antidote is onsen (translated: hot springs). Residents and tourists flock to Japan’s famed hot springs for their abilities to not only alleviate stress, but even help sufferers of various chronic conditions, such as arthritis and rheumatism, among many others.

The Japanese archipelago is dotted with literally thousands of onsen, but only a small percentage have emerged as destinations worthy of a bucket-list. The reasons why this small number of resorts have risen to the top vary, but they have all found different ways to maximise business opportunity to build and sustain their status as a top onsen locale. We looked at Rakuten Travel’s recently released list of the top 10 onsen resorts in Japan for 2015 to examine what key insights we can glean from these resorts and how they can apply to your business. Here is what we found.

1. Product Quality – at the end of the day, if you do not have a quality product you are going to be in trouble. You may be able to achieve short-term success, but lapses in quality will always catch up. Perhaps not coincidentally, all of the onsen resorts in the top 10 are known for the quality of their hot springs.

2. Uniqueness – “I was in a snow country, when I had passed through a tunnel.” This is the opening line to one of Japan’s most famous novels, Yasunari Kawabata’s aptly titled “Yukiguni” (Snow Country). It describes the surreal experience of entering Niigata by train in winter, where one sheds the brown coat of late autumn leaves and then is suddenly engulfed in the deepest blanket of snow imaginable upon emerging from the tunnel at Yuzawa, where the white stuff often piles up to well over 4 meters. To experience an onsen in this environment is truly an unforgettable experience. What makes your product unique and memorable enough for people to write books about?

3. Tradition – Many onsen have histories dating back centuries and were at one time or another the setting for dramatic moments in Japanese history, literature or folklore. Visitors are often swept up in the moment as they consider the famous names that once walked the same cobblestone streets and enjoyed the same waters. What is the story of your company or product?

4. Access – Bottom line, if no one can get your product no one can use your product. All of the onsen in Rakuten’s list benefit from good access. How efficient are your networks?

5. Variety – Sometimes consumers just want choice. Beppu Onsen (#2) has eight distinctly different types of hot springs, from cobalt blue to blood red to grey mud, you are sure to find a favourite.

6. Marketing – Perception is everything. If you can’t increase the actual or perceived value of your product then you will never be able to increase the price. Get your message out.

7. Credibility – Around Japan there are a few hot springs associated with the imperial family, such as Akiu Onsen (#8) near Sendai. This is the equivalent of the golden ticket of credibility. If your product is good enough for royalty then it is among the highest standard of quality. Look for ambassadors that people respect to lend credibility to your brand.

8. Enhanced offering – Some of Japan’s best onsen are not differentiated by the product itself, but benefits that are connected to the product. In the case of onsen, scenery, for example, can be an even bigger draw. For your business, maybe it is service. Think about what you can do to enhance the package.

9. Reputation – sometimes you can be famous just for being famous. But if you do happen to have a well-known and positive reputation, for whatever reason, you might as well capitalise on it. And don’t forget about the power of word-of-mouth in spreading your reputation. High ratings and reviews can have a major impact on conversion.

10. Relevance – by definition, being relevant is a present condition, so this is more of a short-term strategy that businesses need to regularly revisit. So, despite many of the best resorts being home to centuries-old businesses, even they understand the importance of being relevant and have leveraged unique promotions to demonstrate it. Case in point, Atami Onsen, which ranked top in Rakuten Travel’s list, has gained popularity for its beach fireworks festival and promotions aimed at women.