Tourism Boom in Japan Forces Business Travelers to Seek Cheaper Options

Tourism Boom in Japan Forces Business Travelers to Seek Cheaper Options

Tokyo, The Gulf Observer: Japan’s tourism boom, fueled by a weak yen, is creating challenges for domestic business travelers as hotel prices surge to unprecedented levels. With tourism figures for 2024 expected to surpass the 2019 record of nearly 32 million visitors, businesses like Yoshiki Kojima’s IT firm are adjusting their strategies to cope with rising costs.

Kojima’s employees, who travel to Tokyo for company-wide meetings, now stay in capsule hotels instead of traditional business hotels. Capsule hotels, known for their compact, bed-sized pods, have a reputation for being basic, but Kojima has opted for establishments offering high-end amenities such as premium mattresses, TVs, and shared bathhouses. “It’s clean, convenient, and my employees find it fun,” he said, noting that rates for these capsules start at 5,000 yen.

This is significantly cheaper than a standard private room at a business hotel, which averaged 20,048 yen in November 2024—up from 12,926 yen in April 2019, according to Tokyo Hotel Kai.

The rise in hotel rates, driven by increased demand, labor shortages, and higher operational costs, is causing frustration among domestic travelers. Keisuke Morimoto, a kimono shop owner from Nara, expressed his dismay on social media about the soaring prices of Tokyo accommodations for business trips, with some considering Airbnb as a more affordable alternative.

The surge in foreign visitors has also led to “overtourism” in popular destinations like Kyoto, where residents have complained about disruptions caused by tourists. In response, Kyoto plans to increase accommodation taxes significantly for luxury hotels.

Analysts like Takuto Yasuda of NLI Research Institute highlight the dual impact of the tourism boom. While it creates jobs and boosts the economy, it also affects the daily lives of Japanese citizens and limits their ability to travel domestically.

The Japanese government is encouraging tourists to explore lesser-known destinations to ease the pressure on major cities like Tokyo and Osaka, where hotel occupancy rates have soared. For instance, the occupancy rate for business hotels operated by Fujita Kanko in Tokyo reached 88% in 2024, with rates rising 26% compared to the previous year.

Kojima, grappling with the challenge of managing costs for his 20-30 employees during business trips, is exploring alternative options, such as relocating his headquarters to Sapporo or holding meetings in less crowded hot spring towns near Tokyo. “There are many areas that aren’t flooded with tourists, and we can take advantage of that,” he remarked.

Japan aims to welcome 60 million visitors annually by 2030, but achieving this goal may further strain domestic business travelers unless creative solutions are implemented.