Tokyo Hotels Raise Occupancy, Room Rates, Development
<B>Tokyo Hotels Raise Occupancy, Room Rates, Development</B>
By Annalise Bomenblit
Tokyo, a key Asian center for international business, is enjoying some healthy hotel room competition that has reduced the post-recession bargain but opened up the market.
The city currently is enjoying some of Asia's highest hotel occupancies and daily room rates, though Pricewaterhouse-Coopers reported that the average occupancy in the first half of 2000 was 80 percent, with an average daily room rate of US$165. Tokyo saw double-digit increases in room prices late last year, according to the Wall Street Journal, and development is picking up accordingly.
New hotels can look forward to increased leisure traffic upon the opening of DisneySea, a $2.9 billion sea theme park opening in 2001 as an addition to Tokyo Disneyland, which already enjoys an annual attendance of more than 17 million. However, many of the new hotels are outfitted for corporate meetings.
Aside from this year's bumper crop of new hotels, an additional 12 properties are expected to open between 2001 and 2004, and those numbers should increase as larger international hoteliers look at the Asian market.
"We certainly are looking at a greater presence in all of Japan," said June Farrell, head of international public relations for Marriott. Despite one Marriott in a Tokyo suburb, Farrell said the company has teamed up with a local Japanese investment group to seek out more properties throughout the country.
The Tokyo Dome Hotel, the flagship of Japan's Dome Hotels, opened in early summer with 1,006 rooms. The hotel estimated that about half of its estimated 15 percent of international business travelers for the first year will be from North America, with that number increasing in the second and third years. Other hotels with 2000 openings include the 333-room Dai-Ichi Hotel Ryoguku, the 403-room Shibuya Excel Hotel Tokyu and the 281-room Hotel New Green Okachi-cho.
Large hotel companies that aren't seen in the city seem to be aggressively looking to the future, where potential hotel openings two or three years from now could be greeting an even stronger market. "We would like a great presence in Japan. It is a pivotal economy and a strong business market," said Farrell.
The city's newest large-scale development seems to be focused within the lively Roppongi area that offers proximity to several embassies. A new development, called the 66 Project, will include residential, commercial and cultural facilities. The Grand Hyatt Tokyo is scheduled to open in April 2003 as part of this project. The 400-room hotel will join an office tower, retail shops, art center, gardens, a TV studio, residential housing and direct access to the Roppongi Train Station. With meeting space that includes a ballroom seating 750 attendees, the Japan division of Hyatt International estimated that 80 percent of the Roppongi hotel's weekday clientele will be international business travelers.
Meanwhile, Oakwood Worldwide in May opened its first Japan property near Roppongi, catering to long-stay corporate travelers. Oakwood Asia Pacific managing director P.G. Mathew estimated that the majority of the hotel's guests will be corporate, with an average extended stay of three to six months.
Other districts also have been seeing some brisk development. Sofitel Tokyo, located in the Ueno business district, recently has completed such substantial renovations as new guest room technology and a high-tech boardroom. Tokyo's trendy, dot-com-centered neighborhoods, Harajuku, Shibuya and Shinagawa, also are attracting hotel developers. Excel Hotel Tokyo in April opened its doors--with 408 rooms--within Shibuya Mark City. On the northern outskirts of the city, Saitama is seeing an extensive redevelopment project south of Omiya Station, which will include a Metropolitan Hotel.
Despite a feeling that the Japanese economy still is rebounding, American corporate travel to Tokyo has been strong, said Doug Killian, director of international communications with Northwest Airlines, which offers service to Tokyo from eight U.S. cities, most of which offer daily service. Minneapolis flights soon will increase from 10 weekly to double daily on 747 aircraft. Detroit flights also will increase to 10 weekly from the current daily status, said Killian.
"We consider Tokyo a very important destination," said Killian, "and our service has reflected that." It remains one of the airline's most important business travel routes, he added.
As such, the city's international Narita Airport saw a 5 percent increase in passenger traffic for 1999, reaching nearly 26 million for the year. A third runway is being constructed, although a property dispute with neighboring farmers means the 1.4-mile runway will be able to accommodate only smaller passenger planes. The addition is slated for a May 2002 completion.