Japanese hotels are experiencing a surge in prices due to a rebound in domestic and foreign tourism. The ongoing labour shortage in Japan is raising concerns about the supply of available rooms, even as demand increases. A Nikkei survey of 50 hotels with more than 100 guest rooms in five major Japanese cities found that rates for April 29, the first day of the upcoming annual Golden Week holiday period, were higher than the same day the previous year. The rise was particularly notable in Tokyo, with rates increasing by 50% or more at all seven facilities surveyed.
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Rising Occupancy Rates and Labor Shortages Drive Up Hotel Prices in Japan
The rising prices are driven by an upswing in occupancy rates. The number of reservations increased at each surveyed hotel, with many saying they expected an occupancy rate of 70% or more or were almost fully booked. A recovery in domestic tourism contributes to the trend, with budget hotels in Sapporo and group reservations in Kyoto seeing an increase in demand. A travel agency estimates that the number of domestic travellers for the Golden Week period will reach a record.
Survey Shows Tokyo Hotels Increasing Room Rates by 50% or More for Golden Week
Foreign tourism is also fueling higher occupancy and room rates. A hotel in Tokyo reported a remarkable recovery in visitors from other Asian countries, and foreign guests accounted for 64% of reservations at one Tokyo hotel on the first day of Golden Week. As inbound tourist numbers continue to rise, room rates are likely to rise as well. The total number of overnight guests from overseas was 5.92 million as of February, about 64% of the pre-pandemic level.
Recovery in Domestic and Foreign Tourism Boosts Japanese Hotel Industry
However, the recovery in tourism also raises concerns about guest room supply constraints due to labour shortages. A Bank of Japan survey found that employment conditions in the lodging and restaurant industries fell steeply in March, considerably below this year’s average for all industries. As hotels struggle to raise occupancy rates due to labour shortages, they may have no choice but to secure profits by raising rates.
the surge in hotel prices in Japan is a result of a rebound in domestic and foreign tourism, which is contributing to higher occupancy rates. However, concerns about the supply
Concerns About Guest Room Supply Constraints Arise as Japanese Hotel Prices Surge.
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