Mary 16, 2022

Average Room Rates in Domestic Hotels are Increasing

The increase in room rates is particularly noticeable in the high-price range hotels, which is 30% higher than before the COVID-19 pandemic. The number of inbound tourists (foreigners visiting Japan) is more likely to increase further after the completion of the waterfront measures by the end of April. A growing segment of people enjoys staying at luxury hotels, even in Japan, where the classification under the Infectious Disease Control Law is moving to "Category 5."

According to a hotel expert, he said that 'Luxury Hotels' are tapping into the demand for inbound tourism. Rooms costing around 100,000 yen before the COVID-19 pandemic may not be available even at 200,000 yen.

Luxury hotels rank at the top among the highest in each hotel brand. Marriott International's "The Ritz-Carlton" and Hyatt Hotels Corporation's "Park Hyatt" in the United States are examples.

According to STR, a US research firm specializing in hotels, the average unit price of a guest room, which is positioned in the high price range, was 34,533 yen in March 2023. This is 30% higher than the March 2019 price of 26,364 yen. The increase in the high price range is more pronounced than the 17% increase in the medium price range and the 5% increase in the low-price range.

At the Palace Hotel Tokyo, average room rates were around 60,000-70,000 yen before the COVID-19 pandemic. Still, they exceeded 100,000 yen in March, a record high for the hotel. The upward trend continued in April and will likely remain well above the pre-COVID-19 pandemic level in May.

However, if prices continue to rise, consumers may leave. The wealthy do not spend money like "hot water." They do not want to spend on services they do not value.