Billionaire Behind Japan's Tiny-Room Hotel Empire Bets on US

APA Group, the Tokyo-based hotel conglomerate founded five decades ago by the late Toshio Motoya and his wife Fumiko, is pursuing overseas growth as Japan’s tourism boom, fueled by a cheap yen, masks deeper demographic headwinds. Chief Executive Officer Isshi Motoya, the couple’s 55-year-old son and heir to the business, said the company plans to boost international revenue and push further into upscale hospitality, marking a new phase for a brand long associated with snug spaces and hyper-efficient design.

The plan now, Isshi said, is to directly operate hotels in major US gateway cities, franchises in regional markets and, eventually, a broader Pacific Rim network stretching from Japan to Hawaii and Australia. The company forecasts revenue increasing more than 30% by fiscal year 2030, and aims to double its overseas hotel room count to 10,000 the following year. Growth is expected to come partly through acquisitions overseas.

The company’s overseas push began a decade ago with the acquisition of Vancouver-based Coast Hotels. APA plans to use Coast to build a premium reputation overseas before eventually “reverse importing” that image back home, Isshi said from APA’s Tokyo headquarters. Japanese consumers tend to admire established Western brands, he said, arguing that building Coast into a respected international name could ultimately elevate APA’s image in Japan itself. “Just as Toyota did with Lexus.”

APA built its name in Japan on a standardized formula: a long list of amenities packed into tight rooms engineered for efficiency, in dense urban locations. Guests at some properties can soak in communal baths modeled on traditional Japanese onsen, even if the rooms themselves are often too small to fully open a large suitcase.

Privately held and still tightly controlled by the founding family, APA Group — short for “Always Pleasant Amenities” — began in 1971 as a real estate company founded by Toshio Motoya. The business later expanded into hospitality, opening its first hotel in the historic city of Kanazawa on Japan’s western coast in 1984.

From those roots, APA has grown into one of Japan’s most recognizable hotel operators, with more than 1,100 hotels and nearly 150,000 rooms across its global network.

Since acquiring Coast Hotels, APA has been using the chain as its bridgehead into North America. Coast operates 44 franchised properties across the region, and in 2024 APA took a bigger step by buying and rebranding a former Hilton hotel in Seattle — its first directly operated property in the US.

Rooms at APA-run hotels overseas come equipped with TOTO-branded washlets, a cult favorite among foreign visitors to Japan, along with handheld showers and origami cranes placed neatly on the beds. Still, APA is adapting its formula for American tastes. The smallest room at its Seattle property measures 226 square feet, roughly twice the size of a standard room at one of its hotels in Tokyo’s upscale Roppongi district. Isshi was also surprised to find many North American hotel rooms still relied on fixed showerheads, forcing cleaners to use buckets of water during housekeeping, a slower process than the handheld shower systems common in Japan. But analysts say the group will face significant challenges as it pushes into North America’s crowded budget and midscale hotel market, where major chains are rapidly expanding and dominant players such as Marriott International Inc. and Hilton Worldwide Holdings Inc. already control vast loyalty networks and booking platforms. “An unaffiliated foreign brand without a comparable loyalty ecosystem begins at a real distribution disadvantage,” said Krishna Sharma at market research firm ReportPrime. Economy hotels in the US — the segment APA is targeting — saw revenue per available room grow 0.6% in 2025, while midscale chains grew 1.9%, less than half the pace of luxury hotels at 4.2%, according to ReportPrime.

The strategy builds on an audience APA already knows well. American travelers now make up the largest share of the chain’s international guests in Japan, ahead of visitors from Taiwan, South Korea and Thailand.

The domestic hotel market still has room to run as inbound tourism rebounds. In 2025, a record 42.7 million tourists arrived in Japan from abroad. But the industry faces a more difficult demographic backdrop over the longer term.

“While Japan’s travel and accommodation market is expected to continue growing in the near term due to an increase in inbound tourists, it could face long-term contraction as a result of an aging population,” said Taro Yamato, a senior analyst at Euromonitor International. “As such, diversifying revenue sources through overseas expansion is a logical strategic direction.”

Isshi Motoya became APA Group’s chief executive in 2022, ushering in a generational transition while his father, Toshio, remained chairman and his mother, Fumiko, continued as president of the hotel business. But inside Japan, it was often Fumiko — not her husband — who became the public face of the company.

Known for her flamboyant hats, brightly colored outfits and theatrical self-branding, Fumiko Motoya turned herself into an omnipresent symbol of APA. Her image appears across Japan on billboards, hotel advertisements and even the company’s in-room water bottles. With the catchphrase “I am the president,” she cultivated a celebrity-like profile through television appearances, magazine features and relentless promotion of the chain.

“She was an excellent salesperson with incredibly strong sales instincts,” Isshi said. “She would joke that she loved sales more than eating.”

The couple’s younger son, Taku Motoya, 51, serves as a senior director at APA Group, underscoring how tightly the empire remains under family control. The Motoya family’s fortune was estimated for the first time this year by the Bloomberg Billionaires Index at about $2 billion, derived almost entirely from their stake in APA Group.

Born into the family that built APA from scratch, Isshi described an unconventional upbringing shaped by late-night business discussions, property visits and conversations filled with real estate jargon and expansion plans. “He rarely treated me like a child,” Isshi said of Toshio, who died at the age of 82 earlier this year.

While his father led through force of personality and ideological conviction, the younger Motoya describes his own leadership style in markedly different terms. Where Toshio favored top-down decision-making, Isshi says modern management resembles an “inverted pyramid,” with executives supporting employees rather than commanding them. “Flexibility and acceptance are more important now,” he said.

Isshi also appears intent on softening the political profile that long shadowed APA under his father.

Toshio Motoya was a prominent figure in Japan’s conservative nationalist circles and founded Shoheijuku, a political forum and study group associated with revisionist views of Japan’s wartime history that drew right-leaning lawmakers and public figures, including current Prime Minister Sanae Takaichi.

In 2017, APA was embroiled in a diplomatic controversy after videos circulated online in China highlighting Toshio Motoya’s published writings denying the 1937 Nanjing Massacre, the mass killing of civilians by Japanese troops in the Chinese city. The backlash was swift: Chinese authorities ordered online travel platforms to stop cooperating with APA, and bookings disappeared from major Chinese travel sites.

Isshi did not disavow his father’s views, but is moving away from publicly foregrounding them. “In today’s society, we need to consider whether pushing those kinds of messages too strongly to the forefront is appropriate from an organizational standpoint,” he said.

nstead, the younger Motoya is trying to reposition APA as a more globally marketable brand, including through sponsorship of Japan’s national soccer team as they head to the FIFA World Cup matches taking place in the US, Canada and Mexico later this month.

“As things change rapidly, it’s getting increasingly important to be able to transform accordingly,” said Isshi. “Like water at one moment, steam at another, or ice at another."

By Momoka Yokoyama and Filipe Pacheco