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Hotels to add 60,000 rooms in Japan by 2020

Business lodgings drive growth; shortage for Olympics tourists looms

Japan is seeing a surge in foreign arrivals in the runup to the 2020 Tokyo Olympics.

TOKYO -- Japan appears headed for an increase of over 60,000 hotel rooms by 2020 as business lodgings and foreign chains launch new locations, eyeing an influx of visitors to the country that should peak during the Tokyo Olympics.

The pace of hotel room growth is double that of the previous four years. Total investment will reach roughly 1 trillion yen ($8.52 billion), according to an estimate based on Mizuho Research Institute data.

The nation offered about 850,000 hotel rooms in March 2016, the Ministry of Health, Labor and Welfare said. An additional 62,500 rooms will be supplied from 2017 through around 2020, according to Ohta Publications, a Japanese hotel data company.

The most prominent high-end hotel launches involve foreign chains. U.S.-based Hyatt Hotels will open a new Park Hyatt in Kyoto and Hokkaido in 2019. The company will double its locations in Japan to around 20, including brands other than the Park Hyatt.

U.S.-based Marriott International, together with Tobu Railway, will open a Ritz-Carlton in the Tochigi Prefecture city of Nikko in 2020.

But the rising room numbers are being underpinned by new business hotels. Around 1,500 rooms will open in Kyoritsu Maintenance's eight new Dormy Inn locations by March 2018. Fujita Kanko, which operates the Washington Hotel chain, plans to launch around five locations by 2019, offering 1,000 rooms.

Yet hotel shortages likely will remain an issue leading up to the Summer Olympics. If tourist numbers reach 40 million in 2020 as the Japanese government hopes, hotel demand will soar by 35,000 rooms in Tokyo alone, resulting in a shortage of over 10,000 rooms, projections by major real estate services company CBRE show.


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