ABSTRACT
The 'ryokan' is a particular form of accommodation in Japan and it not only provides shelter but also a place displaying Japanese identity. This chapter focuses on three objectives: to provide understanding of ryokan in general and ryokan in Beppu; to identify the challenges and opportunities that ryokan businesses face; and to suggest recommendations for the development of ryokan businesses to provide sustainable co-creation values in the hospitality industry. Ryokan tries to transmit quietness, the passing of the seasons and Japanese hospitality. Beppu, blessed with rich sources of hot springs, has legendary healing powers. Beppu attracts not only a significant number of domestic tourists but also an impressive number of foreign visitors. Although long-term stays had decreased while short-term stays had increased, possibly with the improvement of the transportation system, the change from medical orientation to tourism orientation contributed to the rise of ryokan.
