Tokyo to see two new luxury hotels by H1 2024

These projects will add nearly 250 rooms to the city’s stock. 

In the fourth quarter of 2023, two hotels opened in Tokyo, among which was the 205-key Hotel Toranomon Hills – The Unbound Collection by Hyatt in December. 

According to JLL, Tokyo Edition Ginza, the second Edition brand hotel in Tokyo, also opened in December. This luxury hotel added 86 keys to the market. This brought the upscale-to-above hotel supply to 22,633 keys at the end of December 2023.

Here’s more from JLL:

Two other notable hotels are anticipated to enter the market by the end of the first quarter of 2024: Janu Tokyo and Hyatt House Tokyo Shibuya. These projects should bring 248 new rooms to Tokyo.

Tokyo’s total visitor nights exceeded pre-pandemic levels

Japan recorded pent-up demand since the country reopened its borders to international travellers in October 2022, given that the weak Japanese yen has increased the destination’s appeal. With continued improved airlift, Tokyo counted approximately 12 times the number of international visitor nights between January and October 2023, exceeding pre-pandemic levels by more than 34%.

Domestic demand remains strong amid increased international visitors, representing 60% of the total visitor nights in the city as of YTD October 2023, above 2019 levels by 16%.

RevPAR improves, supported by higher ADR

Tokyo registered a continued increase in trading performance in all hotel segments throughout the year. The rising number of tourists in the city has led to a significant improvement in average daily rate (ADR).

Following the trend through the third quarter of the year, hotels in Tokyo have registered high levels of ADR in the fourth quarter to offset a lagging occupancy rate due to airlift challenges. As a result, RevPAR continued to exceed pre-pandemic levels.

Outlook: Occupancy to catch up in 2024 despite some concerns

The strong travel momentum witnessed in Tokyo since 2023 is anticipated to continue in the middle term. As a result, occupancy in Tokyo hotels should pick up along with the increasing number of international tourists complementing a strong domestic demand base, whilst ADR is expected to rise slightly and then stabilise.

On the other hand, the earthquake in the Hokuriku region in January and anticipated future changes in exchange rate trends may affect the number of foreign visitors to Japan.

Note: Tokyo Hotels refers to Tokyo's luxury and upper upscale hotel market.