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Japan's Tourism Boom Is Pushing Rates Higher


Skift Take

Japan’s booming tourism, driven by a weak yen and rising demand, has pushed hotel costs so high that even business travelers are priced out, prompting shifts to alternatives like Airbnb and further tax hikes in places like Kyoto.

Agence France-Presse published an article on how Japan’s tourism boom has created such high room rates that business travelers, of all people, cannot afford it anymore. The weak yen is attracting more visitors to Japan with a new record expected when the final 2024 totals are in, somewhere around 36.8 million arrivals. Even capsule hotels are seeing room rates rise, starting at US$30 but increasing. That is still lower than a regular standard hotel room in Tokyo, which is up to US$130 on average in November. The pre-pandemic peak was US$80 a night. The increase in visitation is occurring as Japan struggles with chronic labor shortages and an increase in hotel supply costs. The beneficiary of all this may be Airbnb and their renters as many businesses are seeking out that platform as an alternative. As we mentioned earlier this week, Kyoto is greatly increasing their Accommodation Tax. It will be up to 10 times higher for the top end hotels. Meanwhile, Japan’s goal is to attract 60 million visitors a year by 2030.

The Philippines Department of Tourism is blaming the shortfall in meeting its 2024 target of 7.7 million international tourists to budget cuts for tourism programs and stringent policies for foreign visitors. The country did not even come close to their target with just over 5.4 million international visitors. The DOT’s budget had been slashed from PHP500 million to PHP100 million in the General Appropriations Act. Then there was the suspension of the e-visa for Chinese visitors. Only 300,000 Chinese arrived, well below the target of 2 million. The DOT said neighboring countries maintained their more lenient visa policies for Chinese travelers. As for tourism receipts, that was US\$12.95 billion in 2024, up 9.04% from 2023, surpassing pre-pandemic levels by 26.75%.

According to the Thailand Finance Ministry, legalizing the casino IRs in the country could generate as much as 120 to 240 billion baht per year in tourism revenue. They expect the casinos will increase foreign arrivals by 5% to 10%. If done right they are not wrong but we are going to give you the benefit of our 30 years plus experience in the casino world. First, the legalization always takes longer than expected and the final approval never looks like what the original that had been proposed. Lawsuits and angry residents, higher than expected budgets and changes in the global economy usually change the scope of each development and the timeline. In other words, do not start spending or planning for all this until the final version and the actual developers are decided and they start building. What happened in Japan, with only one of the expected three casinos, being developed with the opening expected 10 years later than originally planned, is the norm, not the exception.

Sands China and Marriott International are set to open the 2,405 key Londoner Grand, a Luxury Collection Hotel, Macao. The hotel will be in The Londoner Macao compound and will introduce five new dining concepts. Select suites will offer private terraces, dedicated children’s rooms, media rooms and exclusive private plunge pools. The Londoner Grand is expected to further enhance the position of The Londoner Macao as a resort choice for business and pleasure.

In Jakarta, the Keraton at the Plaza announced its opening. The opening also marks the debut of The Unbound Collection by Hyatt brand in Southeast Asia. The hotel offers 138 rooms and suites from 688 square feet with 12-foot-high ceilings and floor to ceiling windows. The hotel reimagines Indonesia’s royal palaces for travelers. Keraton at the Plaza offers all guests access to The Club on level 7, providing an exclusive dining area, more than just a place to relax and dine. There is a sophisticated boardroom and exclusive chef’s table for gatherings. Guests at the hotel are welcome to take part in Grand Hyatt Jakarta’s recreational facilities and renowned dining outlets as there is a connecting passage to that hotel on the sixth floor of Keraton at the Plaza.

The Grand National by Saint Peter, Sydney, Australia’s newest boutique hotel, is set to open on January 31, 2025. The hotel is situated above the sustainable seafood restaurant Saint Peter in Paddington. Josh and Julie Niland partnered with Studio Aquilo to transform the historic building into the new destination. The Grand National offers 14 individually designed rooms. It originally identified as a neighborhood pub.

Indian Hotels Company said it is well poised to achieve a portfolio of 700 hotels by 2030 under its “Accelerate 2030” strategy. The country’s largest hospitality firm currently has 360 hotels in its portfolio with 237 operational and 123 hotels in the pipeline. In 2024 they executed 85 signings and 40 openings. Their growth under the strategy continues to be capital (asset) light, accounting for 75% of the year’s signings. The Taj brand remains at the forefront of their growth with 19 signings in 2024. Accelerate 2030 will focus on driving top line growth with 75% from traditional businesses and management fees and over 25% from new and re-imagined businesses.

IHCL revealed plans to establish a new Taj resort in Chail, Himachal Pradesh. The development involves an expansion to 100 rooms. IHCL signed the deal with owners Girish Batra and Vansh Batra. On-site amenities at the Taj Chail will include an all-day dining restaurant, a specialty restaurant, bar, heated swimming pool, fitness center, activity center, wellness spa and the largest banqueting venue in Chail. With this hotel, IHCL’s presence in Himachal Pradesh will consist of 11 hotels, including six currently under development.

The Lucknow Development Authority will soon launch an eight-story budget hotel in Vikrant Khand, Gomtinagar in India following a 50-year lease agreement with a private consortium for operation and maintenance. The property is located near the T-point of Ayodhya National Highway and Shaheed Path, built on a 10,968 square meter plot with about 2 lakh square feet of constructed area. The hotel has 186 rooms spread across six floors with 31 rooms per floor from second to seventh floor. The ground floor houses the reception while the first floor comprises a food court, meeting halls and terrace space. The eighth floor has a dining area with a terrace garden.

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