Overview
Seibu Railway, a railway company, tried to expand its business into leisure industry. Its former parent company Kokudo Keikaku, later Kokudo, was a leisure company. Kokudo and Seibu Railway developed many sightseeing areas such as Hakone or Naeba. As such, their hotels became one of the most famous in the country. Originally, hotels branded as Prince Hotels were not wholly owned by Prince Hotels Company, but were instead operated by different companies, such as Seibu Railway, Kokudo, or Izuhakone Railway.
The management system of Prince Hotels was described as "debt operation" by the media. It borrowed funds from banks, developed land using the funds, and borrowed more funds with the growth of land values. The system worked in 1960s with Japanese economic growth, until 1990s when the bubble economy burst.
Under the recent reorganization of Seibu Group, Prince Hotels Company merged with Kokudo. All the Prince Hotels are now operated by Prince Hotels Company. Because of the unreasonable expansion in the past, the company has many underperforming facilities. Under the current plan of turnaround, it closed, sold, and plans to close or sell roughly 40 facilities.
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