Drop In Yen Brings Hotel Rates In Line With U.S. Prices

<B> Drop In Yen Brings Hotel Rates In Line With U.S. Prices</B>

By Robert Selwitz

The decline of the Japanese yen has brought down business travel costs in Japan--which always have been on the global high-end--to the level of those in major U.S. destinations.

With the yen descending from approximately 80 per U.S. dollar just four years ago, to the low 140s this past week, Tokyo prices for international travelers are now relatively close to New York's.

That's particularly true in terms of hotel rates, according to Mamoru Koburi, deputy director of the Japan National Tourist Organization. Still, business travelers should exercise caution in selecting restaurants, hotel room service and ground transportation, particularly taxis.

These days, it still can cost hundreds of dollars to take a taxi from Narita Airport into downtown Tokyo, or from Kansai International to the center of Osaka. And even moderate-length rides within cities can quickly reach $50. Therefore, an understanding of subway systems within Tokyo, Osaka and other major centers can prove to be a real cost and time saver, particularly during business rush hours.

As for the impact of the declining yen upon hotel rates, Koburi said that "hotels have been forced to boost room sales efforts since there has been a real fall-off in bookings for traditional lavish corporate banquets and weddings. The latter have been very badly affected by the economy."

While celebrations normally account for two-thirds of many Japanese hotels' revenues, Koburi said, "Room rates have somewhat come down to international levels. Koburi said. Ten years ago, at the peak of what was called the 'Bubble Economy', room rates were 20 percent higher than today's. So now, a business traveler can stay at the best single in the Park Hyatt, Okura or Imperial Hotel for around $300." Even the upscale Intercontinental Tokyo Bay is offering rates in the mid-$200 range. "For those used to similar rates in New York City, those figures should appear reasonable," Koburi said.

In Osaka, Japan's second most important commercial city, Koburi said hotel rates are some 10 to 20 percent below Tokyo's. One reason is that Osaka is strictly a business destination, with little leisure traffic to offset the periodic business travel dips that hit Tokyo. Also, Osaka suffers from the after-effects of recent hotel over building, something that has not occurred in Tokyo.

Geographically and cost-wise between Tokyo and Osaka is Nagoya, a major industrial center with few international chain properties. Koburi said Nagoya will be the focus of a major hotel influx in the near future.

Nelli Yong, a spokesperson for Starwood Hotels, said that business in the first five months of this year has been strong for Westin and Sheraton hotels, especially in Tokyo. She noted that average occupancy at The Westin Tokyo and the Sheraton Grande Tokyo Bay "is in the low 90s, and rates have not declined."

For business travelers who want to contain costs, Yong suggested "patronizing $10 noodle shops instead of fancy restaurants, making sure you phone internationally via services such as AT&T instead of directly charging calls to one's hotel bill, and entertaining business clients over lunch. Welcoming clients over lunch is much less expensive than at dinner."

Hilton spokesperson Iga Gaj said the impact of the weakened yen upon the domestic Japanese market has, in turn, had direct impact on outbound travel. "Since Japanese and Southeast Asian travelers have become much more careful in their spending," she said, "the hotel has seen a serious drop in area FIT packages. At the same time, inbound travel from the United States is up 22 percent over 1997."

Catering to this new surge in demand, the Tokyo Hilton is initiating a number of steps to improve its appeal to the U.S. market. These include a renovation of the fitness center, installation of a 24-hour Kinko's business center and upgrades to the hotel's five Executive floors. Executive floor rates start at 35,000 yen ($250) for a single room, 38,000 yen ($271) for double accommodations.

Through Dec. 31, rates on the renovated executive floor at the Osaka Hilton, all of which are equipped with fax machines and cordless phones, are 26,000 yen for a single, 31,000 double.

In Nagoya, Hilton executive floor rates--including free faxes, pressing service for one garment, and daily breakfast and evening cocktails--cost 27,000 yen for a single, 36,000 for a double room.

Pan Pacific corporate director of marketing and sales Ron Drake said at the recently opened 500-room Yokohama Pan Pacific, the shrinkage of the local market--which normally accounts for the vast majority of guests--has significantly reduced costs for international travelers.

Like many hotels seeking to compensate for the fall-off in local visitations, Drake indicated the property would warmly welcome U.S. inquiries.