※Translated with Notion AI. (Plus version)
“Why are foreign hotel chains expanding into Japan one after another?”
Surprisingly few people can answer this question clearly.
However, understanding the underlying factors can provide valuable insights not only for Japan’s tourism and real estate markets but also as guidance for investment decisions.
In recent years, there has been a succession of new openings by foreign hotel chains, ranging from luxury high-end hotels to boutique properties specializing in regional markets.
Their strategies and the structural challenges of the Japanese market offer important perspectives for considering future economic and regional development.
Challenges in Japanese Hotel Management and the Rise of Foreign Chains
Japanese hotel management has long been supported by the traditional style where landowners also handle operations.
While achieving high guest satisfaction through their own capital strength and “omotenashi” spirit of hospitality, profitability has often been lacking.
Particularly challenging was the absence of global business development capabilities and sophisticated operational expertise needed to accommodate the rapid increase in international visitors.
This is where foreign hotel chains entered the picture.
Using their “hotel operator” model that specializes in operations without owning real estate, they are rapidly expanding their presence in the Japanese market.
Under this model, Japanese companies own the properties while foreign chains handle operations.
As a result, Japanese companies can now expect stable returns, accelerating the trend toward operational outsourcing to foreign brands.
In other words, most Japanese hotel managers have accepted their “defeat.”
Why Foreign Hotels Succeed: Global Scale Advantages
