As tourism resumes and travel restrictions are lifted, Japan is once again drawing visitors from around the world. The Japanese hotel sector is experiencing rapid growth, contributing to the country’s economy. Luxury hotels in Tokyo are witnessing rate increases, attracting international travelers in search of excellent value for their money.
The Japanese hotel industry is booming. Market research company ResearchAndMarkets.com has released its report “Japan Hotel Market, Size, Forecast 2023-2028,” providing a comprehensive overview of this thriving sector.
The report offers an in-depth analysis of the current and future Japanese hotel market. With the pandemic receding and travel restrictions being lifted, Japan is once again becoming a top travel destination, attracting visitors from around the world. Japanese real estate companies are increasing their investments in hotels as foreign tourists return to the country.
Japan’s rich culture, stunning landscapes, and unique experiences continue to draw travelers, leading to increased demand for accommodation. The hotel sector in Japan is flourishing, contributing not only to tourism but also to the overall economy.
In 2022, the Japanese hotel market was valued at $12.72 billion, and it is expected to grow at a rate of 13.30% between 2022 and 2028.
A growing and diverse market
The hotel offerings in Japan are divided into three categories: luxury hotels, mid-range hotels, and budget hotels. The mid-range hotel industry is thriving, providing travelers with pleasant and cost-effective accommodation options. These establishments strike a balance between cost and quality, making them ideal for economical exploration of Japan.
The report examines key players in the Japanese hotel industry, including Marriott International, Inc., Tokyu Corporation, Park Hyatt Tokyo, Intercontinental Hotels Groups, Kintetsu Group Holdings Co. Ltd., and Hoshino Resorts REIT Inc. These industry leaders offer a wide range of recognized hotel brands, significantly contributing to sector growth.
The Japanese hotel sector has also embraced digital transformation, offering both online and offline booking channels. Customers can now discover, compare, and book hotel rooms from the comfort of their homes through user-friendly websites and smartphone applications. This shift has increased transparency, competition, and accessibility in the Japanese hotel industry, allowing travelers to make informed choices.
Rising hotel rates
Hotel rates are increasing more rapidly in Tokyo than in New York or London, driven by foreign tourists seeking the advantage of a weak yen. The average daily rate for luxury hotels is now approximately 30% higher than before the coronavirus pandemic. In addition to domestic demand growth and pro-tourism government policies, foreign tourists, less affected by higher rates due to the weakness of the Japanese currency, are returning in large numbers.
According to American hotel research company STR, the average daily rate for luxury hotels in Tokyo was 46,133 yen ($307.73) for January-June, a 33% increase compared to the same period in 2019. This surpasses the increases in New York and London measured in local currencies, which were 16% to $355 for New York and 30% to £289 ($364) for London.
Until now, much of the increase in hotel rates in Tokyo has been driven by the influx of American and European tourists. Japanese hotel chains have long been considered more affordable than their foreign competitors, but that is no longer the case. According to yen comparisons by Nikkei, a stay for one person at the Ritz-Carlton Tokyo on October 1, in a room with a king-size bed, was priced at 155,000 yen ($1,033.94), compared to 145,910 yen ($973.40) at the Ritz-Carlton New York Central Park.
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