The APA Group celebrated our 45th anniversary on May 10 this year. Let’s take a look again at the overall picture for business in the APA Group. Including those under construction and design, the APA Hotel Network has 61,491 rooms in 371 hotels across Japan. This includes 15,467 rooms in 66 hotels in Tokyo alone. Almost all of these opened hotels run at a monthly occupancy ratio of 100%. Ordinary income rose from 18.1 billion yen the year before last to 28.2 billion yen last year. In addition, the forecast for the period until November this year is for an ordinary income of 33 billion yen against sales of 106.9 billion yen with a profit ratio of over 30%. There are no other hotels in the world – let alone Japan – with such a high profit ratio. Inquiries have been pouring in from around the world seeking APA’s novel business model of new urban hotels that produce this high profit ratio. APA Hotel is bringing in plenty of revenue in Japan, but we are now planning to expand around the world under the franchise system to start with after taking into consideration the convenience to our more than 11 million APA card members. It was possible to become the number one hotel by taking the top share of the market in Tokyo in Japan. Well then, where to start with APA Hotel’s global expansion. The answer, of course, is New York in the United States. APA Hotel Woodbridge will hold its grand opening on June 20 as the first step in our global expansion? This is in a place located 20 minutes by car from Newark Airport and 30 minutes by train from Manhattan.
I have publically declared that companies which seek to maximize sales and profits will eventually go bankrupt while APA will aim to be a good company. However, my belief is not that things will be fine if just my company does well; rather that Japan must become a great country. I have also been pouring my efforts into speech activities to seek the revitalization of Japan as a country we can all be proud of at the same time as working on my business efforts. I started this Apple Town in July 1990. This is now the 305th issue in 25 years and five months. We issue 78,000 copies of Apple Town a month. This is like producing a bestseller every month. The BIG TALK dialogue article celebrates its 301st anniversary this issue while the Seiji Fuji Essay has been published 287 times. I started the “True Interpretations of Modern History” essay contest in 2008. Toshio Tamogami, the current Chief of Staff of the Air Self Defense Force, won the first contest. We are now seeking entries for the ninth contest. Shoheijuku celebrated its fifth anniversary this year after I started it in June 2011. We have held Shoheijuku 61 times in Tokyo, 49 times in Kanazawa and 42 times in the Kansai area with a total of more than 10,000 participants. Many people have listened to talks by me and other lecturers. This has widened feelings of sympathy for our views. The APA Japan Revival Foundation – the organization that runs the “True Interpretations of Modern History” essay contest and Shoheijuku – became a public utility foundation in June last year. This means that our activities have also been recognized by the government.
Speech activities and business are two sides of the same coin. My ideas wouldn’t be accepted by society no matter how correct they are if my business results were not strong. I have developed my business with this belief. In the new urban hotel standard I have created, the value of a hotel lies in the satisfaction that can be obtained from the accommodation rather than the size of the room. I think this is what people are prepared to pay for. It is possible to satisfy all the needs of a guest while he or she is lying in bed. This can be achieved by providing an original, large and comfortable bed of 1,420mm even in a single room with a large 50-inch television while centralizing all light and air conditioner switches at the bedside. There is no relationship between our guests and staff in our facilities like that of traditional Western hotels in which servants wait on their masters. Instead, we believe that our guests and staff are equal. Our staff members take pride in offering hospitality to guests who are proud to stay in our accommodation. The concept of our hotels is one with a completely new business model. Therefore, we have no rivals and there is no way to compare our rates with others. In addition, although we have set an upper limit on our rates (1.8 times our tariff rate), we employ a system in which they change on a daily basis according to market principles while seeking a balance between supply and demand. Guests who understand this support this new urban hotel concept and choose to stay in our facilities. I believe this leads to our strong profits. I am also grateful to our guests.
We are currently constructing APA Hotel Hiroshima Ekimae Ohashi with the aim of opening in October this year. This hotel will have 727 rooms. This will make it one of the largest hotels in the Chugoku region. I gave a press conference to mark the start of work on this hotel last year. At that press conference, I was asked, “Why are you building such a big hotel in Hiroshima?” I replied that it was because President Obama would be coming to Hiroshima. Sniggers spread throughout the venue when I said that. However, he actually did visit Hiroshima this year in May. My prediction was on the mark. President Obama won the Nobel Peace Prize for a speech he gave on nuclear abolition shortly after taking up office. I could see that such a man would come to Hiroshima to build his legacy and to avoid it being said that in the end the only thing he did was to hold a nuclear security summit. Mr. Donald Trump has been chosen as the candidate for the Republican Party to be the next leader of the United States after President Obama. Mr. Trump sticks to his America first principles. He has even called for the withdrawal of U.S. troops and for Japan and South Korea to be permitted nuclear weapons in some cases. It is now 26 years since the end of the Cold War. Now, it is not just the United States, but the world that stands at the turning point of the tides of change. It seems that the principle of putting one’s own country first and nationalism are becoming popular in every country.
In China, Xi Jinping, the head of state, is aiming to concentrate power with techniques that are reminiscent of the anti-corruption struggle and the Mao Tse-tung era. He has already seized control of the military. It now seems like he may try and make China into his own personal empire without relinquishing power at the end of his ten-year term in office. President Vladimir Putin of Russia is backing nationalism in all areas of life. He is calling for a revival of a strong Russia. He is backed by the massive support of the people. He is now deploying self-assured diplomacy against a background of military force in Syria and Ukraine. He is also building his own personal empire. In Germany, the anti-immigration and nationalist Alternative for Germany (AfD) political party has quickly won the backing of 15% of the population despite just having been formed in 2013. There was a presidential election in May in Austria. The candidate for the Freedom Party that advocates German ethnic supremacy won a 49.7% share of the vote. He was just narrowly defeated by the candidate from the Green Party who won 50.3% of the vote. In Finland, the conservative Finns Party that fiercely criticizes the EU and immigration joined the ruling coalition party in the election of 2015. In France, the right-of-center Republicans are looking to win back power from the ruling left-wing Socialist Party. Furthermore, the far-right Marine Le Pen-led National Front is winning wide levels of support. I think everyone will already know the result by the time this issue comes out, but a national referendum over EU membership is scheduled to take place in the United Kingdom on June 23. Opinion polls reveal that those seeking to leave the EU have higher levels of support than those who wish to remain. There is an increasing possibility that the United Kingdom will leave the EU. Wary of this, stock markets in Europe and the United States have fallen. The yen is also being bought while the euro is being sold on the foreign exchange market. The confrontation between democracy and communism has been resolved in the 26 years since the end of the Cold War. However, Europe was later covered in democratic socialism. Now, conservative forces that seek to put their own countries first are winning support in opposition to this. If this continues unchecked, the EU will break up in Europe and the return of the imperial era would surely be no fantasy. With such massive changes happening, Japan must realize the strangeness of education and media based on a masochistic view of history. Japan must open its eyes to the truth as soon as possible. I recently published Theory of Modern Contemporary History II.If you read this following on from Theory of Modern Contemporary History that came out last year, I think you will be able to gain a correct view of history. In addition, you can view a video of the message I gave at the event to commemorate the launch of Theory of Modern Contemporary History II that was held on June 2 on the website of the APA Group. Please be sure to check it out. (https://www.apa.co.jp/newsrelease/5636)
Society is changing greatly in a direction that was not previously thought possible. Japan is now in the unexpected situation of negative interest rates. The financial industry lends funds with interest covering procurement costs, operating expenses, the risk of bad debt and profit. Nevertheless, it becomes difficult to cover the risk of bad debt if interest rates fall. Therefore, financial institutions will not give financing to anyone other than those who are sure to be able to make their repayments. This is the theory which says that low interest rates leads to monetary tightening. The poor deposit their money in the banks and the creditworthy rich then receive financing with which to further increase their wealth. It is clear that this disparity is spreading even without needing this to be pointed out to us by Thomas Piketty.
Technological innovation is always a cause of change in society. The British Empire once ran its textile industry by using many workers in India. However, the industrial revolution made it possible to mass produce textiles in factories using steam engines. These cut the wrists of workers and destroyed the textile industry in India. India then became a market for British-made textiles. The greatest technological innovation in the world today is the progress of IT. This has led to the emergence of a “one strong, many weak” world. It is possible to easily compare the prices of any product over the Internet. Customers are now concentrated in the places that offer the lowest prices. Traditionally, there were strong companies in each region. Now, the world has become one marketplace. Furthermore, the criterion by which customers choose products is not only price. Added value is also an important element. There are people who are critical of a 30,000 yen per night rate in APA Hotels. However, this is the price that has been determined by the market with a balance between supply and demand. This is the same as the fact that there are no people who complain that the price of perishable food fluctuates between the morning and the evening.
The method for determining hotel rates has entered an era of innovation. It is said that hotels used to compete in the past to be fully occupied. It was seen as good to be fully occupied as early as possible. However, in fact, it is fine just to be fully occupied on the day. The greater problem is whether you have achieved the best sales within the upper amount of your pre-determined fees even with the same full occupancy. Even if you achieve full occupancy right away by charging little, your sales will be low. Hotels like this will eventually be weeded out. The ideal is to achieve full occupancy on the day while gradually increasing your rates. An increasing number of hotels have been introducing such revenue management in recent years. APA Hotel is now no longer able to charge 30,000 yen per night. It is necessary to work on business so that you can win strategically by constantly looking at the era in which we are in.
There are concerns that there will be a shortage of hotels in the Tokyo metropolitan area ahead of the Tokyo Olympic Games. I recently made a petition for a relaxation on regulations in hotel construction. Common areas (e.g. hallways and lobbies) are not included in the floor space index for apartment buildings, but are for hotels. In the case of housing, there is also a floor space index premium in places like Chuo City in Tokyo. The height and shade regulations need to be reviewed in order to promote construction. Moreover, hotels should be subject to the same floor space index standards and premium as with housing. In addition, there are also areas where offices and hotels are obliged to come with housing in the city center. There is a surplus of housing in the city center, so these regulations should have been repealed already. There is also a rule that says you cannot construct hotels in school zones. However, cross-cultural communication is also now an educational theme. This rule should also be repealed.
It is now certain that Mrs. Hillary Clinton will be the candidate for the Democratic Party in the presidential election in the United States. It is almost certain now that this election will be a contest between Trump and Clinton. The approval rating of Mr. Trump overtook that of Mrs. Clinton at one point. However, a gap opened up in their approval ratings according to an opinion poll in early June. Mrs. Clinton is now more than ten points clear of Mr. Trump. One of the reasons for this is that President Obama has been clearly banging the drum of support for Mrs. Clinton with the Democratic Party coming together as one. On the other hand, Mr. Trump made a discriminatory comment that it was “unfair” for the judge in the case involving doubts over Trump University to be Mexican-American. In addition, it is possible to see signs of discord between the leaders of the Republican Party and Mr. Trump. Nevertheless, the election campaign has only just started. Mr. Trump repeatedly made remarks to appeal to the general public and distanced himself from the leaders of the Republican Party in order to win the primaries. However, the election campaign will now become a battle between organizations. With the endorsement of President Obama, the Democratic Party is heading in a monolithic direction. President Obama will also no doubt persuade Mr. Sanders to endorse Mrs. Clinton. On the other hand, the Republican Party is looking to achieve unity by selecting a mainstream candidate to be Mr. Trump’s running mate. The choice of Mr. Trump’s running mate will affect this election campaign. Furthermore, Mr. Trump will now surely start making statements following a pragmatic line according to the traditional policies of the Republican Party. The president who has received the highest acclaim in recent years is President Ronald Regan – the man who ended the Cold War. He was originally an actor and was a radical at first. However, he changed his ideas while aiming for the presidency. I think the same thing will happen with Mr. Trump.
Even if Mr. Trump were to become president, there is absolutely no way he would withdraw the U.S. forces in Japan. This is because to do so would mean letting go of America’s hegemony of the Pacific Ocean that has been their dearest wish since the expedition by Commodore Perry. The Stars and Stripes that was hoisted on Commodore Perry’s flagship USS Susquehanna now adorns the place where the ceremony for surrender was held on the USS Missouri after the end of the previous war. The meaning of this is to signify that their dearest wish since the time of Commodore Perry has been achieved. The United States, which is this committed to hegemony of the Pacific Ocean, has even spurned a proposal from China to divide the Pacific Ocean in two. On the other hand, China, a country that has fought wars will all the countries it is connected to by land, has determined their next foray into the ocean. China is now advancing into the East China Sea, including the Senkaku Islands, and is landfilling reefs in the Spratly Islands in the South China Sea. There is no way that the United States could now withdraw from Japan under such circumstances.
If Mr. Trump becomes president, the leaders of the Republican Party will accompany him and he will learn a lot of confidential information. If he understands the United States’ commitment to the world so far, he will no doubt realize that policies significantly different to the traditional Republican Party line are futile. The birth of a President Trump who insists on making the Japan-US Security Treaty a bilateral one is an opportunity for Japan to become a truly independent state. The Liberal Democratic Party should easily win the House of Councilors election this summer. Two-thirds of the parliamentary seats will then be in the hands of those seeking constitutional amendments. These forces should then make a motion for constitutional change together with two thirds of the House of Representatives and take on the challenge of securing a majority of the vote in a national referendum. Japan will be able to contribute to the stability of East Asia by amending the constitution, changing the Japan-US Security Treaty to a bilateral one in line with the demands of Mr. Trump and working together with the United States to keep in check the expansion of China in the Pacific Ocean.
Properly speaking, there was an opportunity to hold a simultaneous election of both houses of the Diet this summer with a Cabinet approval rating of 55%, but this will not happen. The Liberal Democratic Party will once again be shackled by New Komeito in the House of Councilors election this summer. On the other hand, the Democratic Party will have no choice but to rely on the Communist Party and both parties are extremely pathetic. Each party will squarely take on the challenge of the election campaign by making their inherent claims. As a result, the forces for constitutional amendment should win two thirds of the seats. These forces should then look to bring up a proposal to make amendments to the constitution. It will be extremely difficult to win a majority in the subsequent referendum. However, it is necessary to change the national consciousness somehow. If we leave it too late to turn Japan into a legitimate country, we may find ourselves as a province of China (Japan Province) in the not too distant future. There is not much time left.
Proofreading completed at 12:00 on June 16 (Thu), 2016