Foreign-affiliated hotels opening in Kyoto, Osaka as competition for guests heats up - The Mainichi (2024)

OSAKA -- Numerous foreign-owned hotels have opened their doors across Japan in 2024 as the country experiences a surge in overseas visitors driven by the weak yen. This trend is especially prominent in Kyoto and Osaka, both popular destinations among international travelers. Notably, American hotel giant Hilton is expanding with four new accommodation facilities, and the battle for customers is intensifying.

South of JR Kyoto Station lies Hachijo-dori Street, where cars pass by in an east-west direction. As one walks eastward along this "hotel avenue," many accommodation facilities come into view. There is a wide range of hotels -- some specializing in overnight stays for visitors and others catering to Japanese guests on business trips, and construction of more accommodation is underway.

Hilton and other international hotel chains operate multiple brands with distinct characteristics and price ranges. The various chains have membership programs, and attract customers worldwide, giving preferential treatment to high-value customers.

The DoubleTree by Hilton Kyoto Station, which has 266 rooms, opened in March 2024. The full-service hotel features on-site restaurants and a banquet hall. From the upper floors of the nine-story building, guests can enjoy views of shinkansen trains arriving at and departing from Kyoto Station. And for foreign guests, the hotel offers suites with tatami mats.

By autumn 2024, a flagship "Hilton Kyoto" will also open in the Kawaramachi-Sanjo area in the city center. The developments contrast with the situation before the COVID-19 pandemic, when Kyoto had no Hilton hotels.

Hilton's expansion isn't limited to luxury accommodations. In 2022, Hilton Garden Inn Kyoto Shijo Karasuma opened as a "focused service" hotel. According to the official website (as of June), weekday rates start in the high 10,000-yen range (about $62 and up) per night per person.

Why has the brand expanded widely in one city? Joseph Khairallah, the Hilton's area vice president for Japan, Korea and Micronesia, says that Kyoto has appeal as a travel destination, ranking among the top five destinations in the world, and as the budgets and purposes of travelers differ, the company will be able to correspond to customers' needs ranging from luxury to full service and focused operations.

In Osaka, the DoubleTree by Hilton Osaka Castle, which has 373 rooms, opened in May near Osaka Castle Park. Hilton proactively sought this location. Daiwa House Industry Co., the developer of the building complex that houses the hotel, revealed, "We received requests and consultations (from Hilton) about it opening here."

Osaka is set to host the world expo in 2025, and plans to open an integrated resort centered on a casino in around the fall of 2030, which is certain to bring in more foreign tourists. Hilton had operated only two hotels in Osaka until 2024, and the new opening can be viewed as a strategic move to meet rising demand.

In September 2024, Hilton will also debut its "Canopy" brand in Japan with a hotel in the Grand Green Osaka redevelopment area north of JR Osaka Station. In 2025, Hilton's top "Waldorf Astoria" brand will also open in the same area.

Other international hotel chains are also actively making moves.

In June 2024, American hotel operator Hyatt's 167-room hotel Caption by Hyatt Namba Osaka opened in Osaka's Namba district, which is popular among foreign visitors. Known for its casual atmosphere, the hotel offers rooms starting at around 20,000 yen (approx. $124) per night and features activities like "takoyaki" (octopus balls) cooking experiences.

Additionally, Britain's IHG Hotels & Resorts plans to renovate three existing hotels in central Osaka by the end of 2024 and open mid-range facilities. The locations offer easy access to both the business and entertainment districts.

Regarding the opening of foreign-affiliated hotels one after another, Kenichiro Yokoyama, a professor specializing in tourism management at Ritsumeikan University at the graduate school level, expressed expectations for benefits from the new openings, saying, "Major cities like New York and Hong Kong have even more foreign-owned hotels. The new openings in Japan could attract members of these hotel chains from abroad, contributing to the government's goal of receiving 60 million visitors to Japan in 2030."

How should Japanese hotels respond? Yokoyama suggests, "It's important to improve brand strength. In Thailand, where foreign-affiliated companies have also made inroads, people visiting from Western countries have become aware of local hotels, too. Amid competition with international brands, I think unique hotels that make the most of Japan's regional characteristics can thrive."

(Japanese original by Tsuyoshi Kosaka, Osaka Business News Department)