Crop Of Mixed-Use Luxury Hotels Rise In Tokyo

Tokyo is amidst a wave of luxury lodging development that is bringing such brands as Conrad, Mandarin Oriental, Peninsula and Ritz-Carlton to the city. Most are part of large mixed-use office and retail complexes that give business travelers extensive choices of dining and entertainment options just a short walk from their hotel lobbies.

The influx of new hotels is expected to keep rates in Tokyo fairly competitive with other major business capitals. In fact, Tokyo's reputation as an ultra-expensive destination no longer is valid, particularly when compared with escalating costs in other cities, according to Bruce Kanfer, director of marketing and sales for the Japan Convention Bureau in New York.

"Hotel rates in Tokyo are very competitive and in some cases are better than those in New York or Europe," he said. "This is a result of more competition between hotels and also from Japan's deflationary economy. A good exchange rate between the dollar and the yen is also helping."

Kanfer also noted that business travel and all types of meetings—from board meetings to large conventions—are on the upswing for Tokyo.

"In particular, the influx of luxury hotels into Tokyo is a sign that corporate business is strong," Kanfer said. "These super-deluxe properties are all targeting the corporate market."

While rates at the new luxury hotels are high, frequently $400 a night or more, their presence is putting pressure on many existing hotels to either lower their rates or make substantial investments in renovations, according to a hotel marketing report issued by Colliers Halifax, a commercial real estate consulting firm with offices in Tokyo.

"As the new properties open, competition between old and new will increase until the market is stratified into various levels of winners and losers," the report stated. "Tokyo is already one of the least expensive cities among its peer group for luxury lodging—frequently pricing below London, Paris and New York City. It is fair to assume that room rates will fall even further in the coming years."

The Colliers Halifax report also noted some marked differences between new hotels in Tokyo and those developed in the past two decades. Not only are the newcomers parts of mixed-use developments, but they tend to be smaller properties with a focus on spa services and other personalized amenities.

The latest high-end hotel to open is the 179-room Mandarin Oriental Tokyo, which made its debut in December in Nihonbashi, a commercial area close to the Tokyo Stock Exchange, Tokyo Central Station and the Ginza shopping and entertainment district. The first Mandarin Oriental property in Japan, the hotel occupies the top nine floors of the Nihonbashi Misui Tower and offers panoramic views stretching from Tokyo Bay to the gardens of the Imperial Palace.

Guest rooms at the Mandarin Oriental average 600 square feet and feature such amenities as 45-inch flat-screen televisions and DVD players. The hotel also offers six restaurants and lounges located on the top floor of the tower. Meeting space includes a grand ballroom, which seats up to 320 guests, and 14 conference and banquet rooms.

Other amenities offered at the Mandarin Oriental include a two-story spa with nine treatment rooms, saunas, stream rooms, plunge pools and a fitness center. Both Western and Asian-style treatments are available. The hotel currently is offering a business package for corporate travelers priced at $396 per night, which includes deluxe accommodations, breakfast and a choice of either spa use or dry cleaning service.

Conrad Hotels also recently opened its first property in Japan, the 290-room Conrad Tokyo in Shiodome, an office, retail and entertainment development not far from the Ginza district. Like the Mandarin Oriental, the hotel occupies the top floors of an office tower and offers expansive views.

Accommodations, which include 68 suites, are designed with floor-to-ceiling picture windows and feature such amenities as 37-inch plasma-screen televisions with satellite channels, DVD players and cordless phones. Meeting space at the Conrad includes two ballrooms and six banquet and meeting rooms.

Dining choices include two French restaurants, a Chinese restaurant and a Japanese restaurant featuring separate areas for sushi, kaiseki and teppan styles of cuisine. Other amenities include a large spa with 10 treatment rooms and a swimming pool located in a greenhouse-style enclosure with city views.

The next new luxury hotel for Tokyo will be a 250-room Ritz-Carlton scheduled to open in Roppongi, a popular entertainment and business district, next spring on the former site of Japan's Defense Agency.

Located on the top nine floors of a dramatic skyscraper designed by Skidmore, Owings & Merrill, the Ritz-Carlton property will be part of a complex that includes office space, several residential towers, a shopping mall and other facilities.

Amenities at the Ritz-Carlton will feature several restaurants and a large health club and spa. Meeting space, which will be located on the tower's lower floors, will include a large ballroom in addition to several conference and banquet areas.

Differing from the other new hotels in that it will be a 24-story, freestanding property that is not part of a larger complex, the Peninsula Tokyo is currently under construction and scheduled to open next summer. Located east of Hibaya Park in the Marunouchi district, the 315-room hotel is being developed by Hongkong and Shanghai Hotels Ltd. and Mitsubishi Estate Co. The property will feature five food and beverage outlets, including a signature Peninsula Lobby serving breakfast, lunch, dinner and afternoon tea.

Meeting facilities at the Peninsula will consist of a main ballroom, a junior ballroom, pre-function areas and conference space. For recreation, the hotel will provide a full-service spa, fitness center and swimming pool.

Despite the fact that the Peninsula's opening will be preceded by the debuts of several high-end competitors, Kate Kelly, manager of corporate affairs for Peninsula parent company Hongkong and Shanghai Hotels, said there will be a healthy market for the hotel, particularly from international business travelers and domestic leisure travelers.

"We have been interested in Tokyo for a long time, but our policy has always been to only go into a destination when all the elements are right—meaning the right location, the local partner, etc.," she said. "We believe the introduction of more high-end hotels into the market benefits the consumers and the industry generally, raising the bar for everyone."

Meanwhile, some of Tokyo's older hotels have been investing in renovations in order to stay competitive. The Keio Plaza Tokyo recently introduced Premier Plaza rooms featuring such amenities as luxury bedding, French bath products and LCD display screens.

For the ultimate in accommodations or entertaining, the Imperial Hotel, Tokyo's grande dame of luxury properties, recently unveiled the Frank Lloyd Wright Suite in honor of the architect who designed the hotel in 1923. The suite, which includes a living room, study, dining room and bedroom, incorporates furnishings and architectural details created from original Wright designs.