Foreign-Owned Hotels Surge in Japan, Sparked by Weak Yen and Tourism Boom

Foreign-Owned Hotels Surge in Japan, Sparked by Weak Yen and Tourism Boom

The weak yen has triggered a surge in foreign visitors to Japan, leading to a boom in foreign-owned hotels, particularly in popular tourist destinations like Kyoto and Osaka. This trend is evident in the expansion of American hotel giant Hilton, which has opened four new hotels in Japan, including two in Kyoto.

In Kyoto, Hilton's expansion is particularly noticeable along Hachijo-dori Street, a "hotel avenue" lined with various accommodation options. The DoubleTree by Hilton Kyoto Station, with 266 rooms, opened in March 2024, offering full-service amenities and stunning views of shinkansen trains. A flagship "Hilton Kyoto" is also set to open in the city center by autumn 2024.

Hilton's expansion extends beyond luxury accommodations. The Hilton Garden Inn Kyoto Shijo Karasuma, a "focused service" hotel, opened in 2022, offering affordable rates starting from around $62 per night. This expansion reflects Kyoto's appeal as a top global tourist destination, catering to diverse budgets and travel styles.

Osaka is also experiencing a surge in foreign-owned hotels, driven by the upcoming 2025 World Expo and the planned integrated resort with a casino. The DoubleTree by Hilton Osaka Castle opened in May 2024 near Osaka Castle Park, strategically positioned to capture the rising tourist influx. Additionally, Hilton's "Canopy" brand will debut in Japan with a hotel in Osaka in September 2024, followed by the top-tier "Waldorf Astoria" brand in 2025.

Other international hotel chains are also making their mark in Osaka. Hyatt's Caption by Hyatt Namba Osaka opened in June 2024, offering a casual atmosphere and unique experiences like takoyaki cooking classes. IHG Hotels & Resorts plans to renovate three existing hotels in central Osaka, transforming them into mid-range facilities with convenient access to both business and entertainment districts.

This influx of foreign-owned hotels presents both challenges and opportunities for Japanese hotels. Professor Kenichiro Yokoyama of Ritsumeikan University believes that Japanese hotels need to enhance their brand strength and leverage their unique regional characteristics to compete effectively. He cites the example of Thailand, where local hotels have successfully established their presence alongside international brands.

The increasing presence of foreign-owned hotels is expected to contribute to Japan's goal of attracting 60 million visitors by 2030. This trend highlights the importance of adapting to the changing tourism landscape and embracing competition to create a thriving hospitality industry in Japan.