A quickly recovering inbound tourism industry coupled with a labor shortage has caused hotel rates in some areas in Japan to far exceed pre-pandemic pricing.
The biggest change is in Kyoto City where the average nightly rate for a pair of guests was 73,143 Yen in 2023, up 88% from 2019, according to Metro Engines. In Tokyo, the nightly rate increased by 77% to 69,281 Yen. Osaka City saw a 31% increase to 35,662 Yen, Fukuoka City saw a 28% increase, and Sapporo City saw a 19% increase.
The wealthy summer resort of Karuizawa in Nagano Prefecture saw a 43% increase to 97,169 Yen/night. Located up in the mountains and a 1 hr 20 minute train ride from Tokyo, it has long-been a convenient and popular getaway for Tokyo residents. It is home to some luxury accommodations, too, with brands like Fufu, Hiramatsu, Hoshinoya, Hilton, and Marriott all operating in the town. In contrast, other holiday areas like Hakone (-7%) and Naha (-18%) have yet to see the same jump in pricing.
The Yen has sunk to historic lows against other major currencies, making Japan seem like a bargain tourist destination for foreign travelers. As a result, hotels have been able to increase pricing while still matching demand. Some believe pricing will continue to rise, as labor shortages change the priority from high occupancy to one of nightly rates.
According to the Japan Tourism Agency, foreign tourists are currently spending an average of 50% more on accommodation compared to pre-pandemic levels. Visitors from the UK are spending 93% more on hotels than they did pre-pandemic, averaging 153,423 per person per trip. Hotel spending by mainland Chinese tourists has increased by 84% to 85,322 Yen.
*Data reported by Metro Engines covers city hotels, deluxe hotels and resort hotels. It does not include business hotels.
Source: The Nikkei Shimbun, November 7, 2023.
