After a seminar in Tokyo, employees of Yoshiki Kojima’s IT company fall asleep in a capsule hotel: in the Japanese capital, the boom in tourism makes classic hotel rooms too expensive for business trips.
The weakness of the yen attracts more and more visitors to the Japanese archipelagowhere the number of foreign tourists jumped in 2024 to the unprecedented level of 36.8 million entriessurpassing the previous record of 2019 (32 million), according to an official figure announced on Wednesday. Accordingly, classic hotels are full and prices are soaringforcing Japanese businessmen and women to fall back on minimalist solutions such as the famous micro-rooms.
Capsule hotels, a Japanese institution, offer spaces no larger than the size of a bed. These mini-rooms have a “shabby” reputation, Mr. Kojima admits, but this boss has found a more comfortable establishment that offers high-end mattresses and a television in each capsule. “It’s clean, practical and we have a traditional shared bathroom. My employees say it’s fun,” he told AFP.
In Tokyo, prices for a standard capsule start at around 5,000 yen (31 euros) per night. Prices increase for more comfortable capsules, according to Mr. Kojima. But it’s still cheaper than a basic room in a business hotelwhich, in the Japanese capital, costs four times more on average, at 20,048 yen (154 euros) per night. An average rate itself up significantly compared to the pre-Covid pandemic peak, of around 13,000 yen, reached in April 2019, according to a study by Tokyo Hotel Kai, a group of around 200 hotels.
“What should I do?”
“I am happy that there are so many visitors to Japan, but I torture my mind every day to find a flexible way” to manage the business, says Mr. Kojima, who regularly has to bring in around twenty employees in the capital for meetings.
The Japanese economy benefits from the influx of foreign tourists because it creates jobs and these visitors spend moneyexplains analyst Takuto Yasuda of the NLI Research Institute. “But it also has a negative impact, such as the fact that Japanese cannot travelor that their daily life is affected by overtourism,” he told AFP. Japan’s chronic labor shortage and rising hotel supply costs are also driving up priceshe adds.
Keisuke Morimoto, who runs a kimono shop in the Nara region of western Japan, was shocked to learn that two nights in a Tokyo hotel would cost him 60,000 yen (370 euros). “Seriously, what should I do for my business trip?” he was indignant on the X network. Questioned by AFP, he said he was considering using a famous rental platform, which offers offers more affordable.
Reacting to overtourism, the former imperial capital Kyoto announced on Tuesday a net increase from 2026 in the tourist tax imposed on visitorsup to ten times the current level for high-end hotels.
Distribute the tourists
The government wants to welcome 60 million visitors per year by 2030 in the country. That could mean even more expensive business trips for Japanese to Tokyo, Osaka and other major cities, where requests for hotel reservations are soaring. To balance things out, the government is trying to attract tourists to less popular destinations and encourage them to stay at least two nights in rural towns.
Expert Takuto Yasuda agrees that spreading out visitors is key to easing pressure on city hotels.
The occupancy rate of business hotels managed by Fujita Kanko Group in Tokyo was 88% in 2024, with average rates up 26% from the previous year, the company said. “Currently, demand is concentrated in big cities like Tokyo and Osaka, so we hope this will expand to Sapporo (north), Naha (south) and other smaller regions,” the company explained.
For his part, Mr. Kojima could resort to drastic measures for his IT business. “I’m thinking of moving our headquarters to Sapporo, or organizing meetings in a spa town near Tokyo,” he confides. “There are many places that aren’t flooded with tourists, and we can take advantage of that.”
