First-Ever Selection for a Specialized Hotel Chain! Kawaroku Group Named a Best Practice in Ministry of Economy, Trade and Industry’s 'DX Selection 2026'

Kawaroku Group Named a Best Practice in Hospitality DX

Kawaroku Co., Ltd. (Headquarters: Takamatsu City, Kagawa Prefecture; President: Keiichi Takarada), which operates a business hotel chain in Western Japan, announced that it was selected as a best practice by the Ministry of Economy, Trade and Industry (METI) in the final session of 'DX Selection 2026' on May 20, 2026. This marks the first time a business hotel group has been honored with this recognition.

### Establishing the 'Kawaroku Model' through DX

'DX Selection' is a METI initiative designed to discover and promote best practices among small-to-medium-sized enterprises that have pioneered digital transformation (DX) to significantly improve productivity and business models. Guided by the vision of 'Creating a new standard for hotels in regional cities through kindness and technology,' Kawaroku has implemented holistic DX across its management, organization, and workforce.

By designating its existing hotels as 'DX experimental fields,' the company has packaged high-productivity know-how—such as automated accounting and the use of Generative AI (RAG)—into what it calls the 'Kawaroku Model.' By immediately implementing this model at struggling regional hotels, Kawaroku has achieved 'high-speed business turnarounds,' turning loss-making facilities profitable in just three months, thereby creating a sustainable business model in the face of Japan's declining labor force.

### Advancing Automation and AX (AI Transformation)

Kawaroku’s productivity is underpinned by thorough automation of its back-office operations. By centralizing tasks such as bank transaction recording, petty cash, daily and monthly revenue management, corporate card administration, payroll, and invoice management, the company has completely eliminated manual entry work. Consequently, despite managing a 3-billion-yen annual revenue business, the entire accounting operation is handled by one part-time employee working remotely three days a week.

Moreover, since 2023, the company has expanded from DX into 'AX (AI Transformation).' The cornerstone of this effort is 'KAWARAG' (Kawaroku’s RAG), a generative AI that searches and references internal proprietary data. Its 'Manager AI,' trained on historical troubleshooting data and know-how, provides 24/7 emergency support, freeing hotel managers from constant duty and increasing the psychological safety of onsite staff.

### Expanding Turnaround Operations

With a history dating back to its founding as a traditional inn in Takamatsu in 1877, Kawaroku shifted its business model to specialized business hotels in 2002 and accelerated its hotel turnaround operations in 2011. Currently, the group manages 1,265 rooms and has been a recipient of the Rakuten Travel Award for 14 consecutive years since 2012. Building on this recognition, the group intends to accelerate its expansion across the Chugoku, Shikoku, and Kyushu regions.