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Room-rental boom hits Japan hotel rates over Lunar New Year

Big-city hotels cut prices to lure back foreign tourists

The Hotel New Hankyu Osaka cut average room rates by nearly 20% over the Lunar New Year holiday.

OSAKA -- Average prices at Tokyo and Osaka hotels during the Lunar New Year holiday slumped sharply this year despite a continued rise in visitors to Japan, probably due to the growing popularity of short-term home rentals as an alternative.

Average daily rates in Tokyo between Jan. 27 and Thursday fell 13% on the year to 10,657 yen ($95.39) per night, according to yoyaQ.com, a reservation website run by Kakaku.com. The decline was even more pronounced in Osaka, where the average tumbled 26% to 10,193 yen.

While room rates rose more than 10% nationwide in 2015, many hotels cut prices last year. The Lunar New Year -- typically a busy time for the industry, since many Chinese use the long break for travel -- was closely watched this time for signs of what to expect in the coming year.

"The impact of minpaku was larger than we thought," an officer at Kintetsu Miyako Hotels International said, referring to paid hosting of travelers at private residences. A survey by the Osaka Convention and Tourism Bureau found that 57% of foreign visitors to the city stay in hotels, while 17% use minpaku. Private-lodging rentals are an attractive option for groups, allowing them to pack more people into fewer rooms.

Price cuts helped many hotels boost or maintain occupancy rates over the holiday. The Hotel New Hankyu Osaka cut prices by nearly 20% and the ANA Crowne Plaza Osaka by almost 10%.

The Hotel New Otani in Tokyo lowered average rates for individual foreign guests by about 10% to 21,000 yen per night, changing its strategy after failing to draw as many customers as hoped the previous year with more-bullish pricing. The hotel's occupancy rate rose 0.7 percentage point to 64%.

The popular home-sharing website Airbnb has more than 16,000 listings in Tokyo and more than 12,000 in Osaka Prefecture, a Tokyo-based minpaku analysis firm said. Tujia, called China's answer to Airbnb, has announced plans to expand into Japan. Hotels will need to adapt further to this influx of supply.

(Nikkei)

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