Positive outlook for Japan’s prospective hotels as tourism recovery gathers pace

Rendering of Capella Kyoto courtesy of Kengo Kuma and Associates.
Japan’s solid high end hotel pipeline is being backed up by a rapidly growing traveller demand.

The latest data from the Japan National Tourism Organisation show an upward trend for international arrivals, with 1.5 million visitors heading to the Asian nation just in January.

Road to recovery

This one month total stands in comparison to the entirety of 2022 when 3.8 million travellers crossed the borders, though covid travel restrictions were only eased in October.

However, if January’s amount is replicated every month this year, we can estimate that 18 million global tourists will be flocking to Japan in 2023 – that would be more than halfway back to 2019’s record of 31.9 million arrivals.

Hefty investment

That should be welcome news for hotel groups and developers with Japanese projects on the slate. Currently the THP database holds records of 80 upcoming premium sites comprising 18,492 keys across the country.

Collectively these represent a hefty US$6.3 billion minimum amount of investment.

Outstanding Osaka

Analysing our data by city, we see that Osaka comes out top, with at least 10 high end hotels expected, comprising 5,676 rooms. Close behind on project count is Kyoto on nine sites, though it comes in third on key count with a total of 1,205. Capital Tokyo has at least eight hotels on the slate, third in the project list, though by keys it is second, with at least 1,618 rooms on the books.

More immediate openings are the most popular, with a minimum of 27 developments representing 5,541 rooms expected to complete this year. The rate remains strong next year with another 24 deliveries of 4,146 keys collectively on the schedule. In 2025 currently another 11 high end hotels are expected in Japan, with at least six more joining in 2026. The remaining 12 sites are either scheduled for further in the future or yet to be designated a delivery date.

Numerous newbuilds

Newbuilds are by far the most numerous property category, comprising 85% of the pipeline and equating to 68 projects. Just seven high end refurbishments are underway, alongside four conversions and a single extension.

The star rating tally is very closely matched, with 41 luxury hotels in the pipeline as compared to 39 in the upscale segment. However, by key count the difference is more marked, with at least 10,801 five star keys under development in Japan as against 7,691 four stars.

Big brands in Japan

It’s very competitive between the big hotel groups for premium Japanese developments. The THP database notes at least 11 Hilton Worldwide projects in the country and a minimum of 10 for Marriott International. Accor makes the podium on at least seven sites.

By individual brand we see Fairfield by Marriott and Hilton Hotels & Resorts top the listings on at least five apiece, while Four Seasons Hotels and Resorts looks to be planning a minimum of three properties.

Diverse debuts

Several brands will soon be making their first appearances in Japan, including Capella Hotels and Resorts, with Capella Kyoto. The luxurious four-storey, 92-room hotel will feature a Japanese garden courtyard at its centre, with amenities including Capella’s signature Auriga Spa and three dining outlets. Opening is scheduled for mid-2025.

Plus Swire Hotels is venturing outside its home Chinese market for the first time with The House Collective Shibuya City on the outskirts of Tokyo. Due for completion in 2027,  the new 200-key House will be part of the Shibuya Upper West Project by Tokyu Corporation, Tokyu Department Store and LCRE.

Furthermore, IHG Hotels & Resorts will be debuting its soft brand Vignette Collection in Japan in 2025. Rihga Royal Hotel Osaka – Vignette Collection will be the result of an extensive refurbishment of Rihga Royal Hotel Osaka. Today, it features 1,039 guestrooms, 18 restaurants and bars, 56 ballrooms, banquet halls and meeting spaces, wedding facilities, pools, fitness centres and retail outlets.