As prices rise, is battle heating up between domestic, foreign tourists for Japan hotels?

Foreign tourists enjoy cherry blossoms in Kyoto’s Higashiyama Ward on April 5, 2025. (Mainichi/Kenjiro Sato)

TOKYO — The cost of staying at hotels in metropolitan Tokyo and regional Japanese cities keeps rising amid a surge in foreign visitors, with a survey by a Tokyo-based corporate analytics firm showing rates at key lodgings had risen by as much as over 50% year-on-year last fall.

A poll of room rates in October to December 2024 by Tokyo Shoko Research Ltd. (TSR) covering 15 hotel brands across 13 publicly traded operators showed an increase from the same period of the year prior for all companies, as much as 1.6 times. “With room prices expected to rise further, the battle for room reservations between domestic travelers and inbound tourists is expected to intensify,” the company commented.

The average rate per room at eight business hotel brands for which prices can be compared before and after the COVID-19 pandemic was 13,986 yen (some $98), up approximately 45% from October-December 2019. Rates at four higher-priced “city hotel” brands also increased by some 35% to 20,897 yen (around $146), exceeding 20,000 yen for the first time in the last five years as occupancy rates, which had slumped to the 20% range due to the coronavirus disaster, recovered to over 80%.

Major travel company JTB Corp. estimates the number of foreign visitors to Japan in 2025 at 40.2 million, about 9% more than in 2024 and forecast to reach a record high for the second year straight.

The hotel industry is facing challenges such as better deals for workers due to a labor shortage, and an increase in the cost of changing linens. TSR notes, “There are currently few factors working to lower prices. This year’s many international events in Japan, including the World Expo in Osaka, are generating strong demand for guest rooms.”

Meanwhile, regarding the price of stays, it has come to light that 15 luxury hotel operators in the Tokyo area had been regularly sharing proprietary information, like a cartel. The Japan Fair Trade Commission is expected to soon issue a warning against a recurrence of such practices, and Tokyo Gov. Yuriko Koike at a regular press conference April 18 asked hoteliers to preserve consumer trust.

(Japanese original by Makoto Kakizaki, Tokyo City News Department)