Wayfarer TV: Japan hotel sector enters new era of ‘quality growth’ as leaders gather for record AHICE Far East Asia
Held at the Grand Prince Hotel Takanawa in Tokyo on Thursday 3 September, the third annual AHICE Far East Asia brought together senior owners, operators, investors, developers and advisers to examine the outlook for one of the world’s most closely watched hotel markets.
Opening the industry discussions, STR Regional Director Asia Pacific ex-China Matthew Burke said “Japan is in transition” following three years of double-digit RevPAR growth, with demand beginning to normalise and operators shifting their focus from occupancy towards rate, revenue optimisation and profitability.
Despite occupancy remaining below 2019 levels, Burke said Japan continues to trade at exceptionally strong absolute occupancy and RevPAR remains well above its pre-pandemic benchmark – making the conversion of revenue growth into profit an increasingly important focus.
Growth beyond Tokyo, Osaka and Kyoto emerged as a major theme, with opportunities highlighted across Fukuoka, Hokkaido, Sapporo, Nagano, Hakuba, Okinawa and other emerging destinations.
Pan Pacific Hotels Group Chief Executive Officer, Choe Peng Sum, said there were “so many opportunities outside these three golden routes”, while identifying air access and construction costs as key constraints to spreading growth more widely.
With development costs rising sharply, Choe said acquiring and renovating existing hotels could increasingly make more commercial sense than building from the ground up.
Direct international air access was also identified as a catalyst for regional markets. Seibu Prince Hotels Worldwide President, Representative Director and CEO Yoshiki Kaneda highlighted new international services into Sapporo as a significant opportunity for Hokkaido, alongside growing adventure tourism demand.
High construction costs, limited contractor capacity and longer development timelines are accelerating interest in conversions and repositionings, as well as regional resorts, lifestyle hotels and extended-stay accommodation.
The Japan Development Outlook also heard that Japanese owners and developers are becoming increasingly sophisticated in their understanding of international brands, distribution and loyalty platforms.
BWH Hotels Managing Director Development Asia Pacific, Cyril Czerwonka, said rising construction costs were making conversions an increasingly important avenue for growth, particularly in the upscale and luxury segments.
IHG Hotels and Resorts Managing Director – Japan and Micronesia, Abhijay Sandilya, also highlighted the momentum behind conversions and international brands.
IHG recently signed a landmark 14-hotel portfolio in Kyoto – including 12 Garner hotels – with Sandilya saying the deal reflected “the growing confidence of owners in our business” and the opportunity to grow conversion brands across Japan.
Global hotel operators expressed strong confidence in further international brand growth in Japan, supported by comparatively low brand penetration and constrained new supply.
During the Global Demand for Japan panel, BWH Hotels cited international brand penetration at approximately 5% in Japan, compared with around 25% in Thailand, while new supply was cited as significantly below the broader Asia-Pacific average.
Hokkaido-based hotel adviser Michael Flynn described Japan as being in an “absolutely perfect storm”, combining strong international demand, a stable domestic market, rate growth and constrained supply.
Radisson Hotel Group Asia Pacific Development Head Ramzy Fenianos called Japan an “absolute no-brainer”, while emphasising that international operators must also understand and penetrate the country’s substantial domestic travel market.
Speakers also argued that Japan’s distinctive hospitality culture gives domestic operators a competitive advantage that is difficult to replicate.
Kaneda said Seibu Prince’s local knowledge and heritage in Japanese service were difficult to replicate: “Japan is known for quality, trust, and great service and hospitality and great food.”
He also highlighted technology’s role in sharing guest preferences across the portfolio, alongside continued investment in people. Seibu Prince recruited more than 500 graduates and maintained annual staff turnover below 10%. “This industry, people make a difference,” he said.
Technology and artificial intelligence also featured prominently throughout the event, with hotel technology companies and operators examining practical applications including guest communications, revenue management, staff productivity, recruitment, personalisation, mobile access and the automation of repetitive hotel processes.
A consistent message was that technology should not replace hospitality, but remove friction and administrative work so hotel employees can spend more time with guests.
The discussion also looked beyond generative AI towards systems capable of taking actions within hotel operations, as well as the potential for AI platforms and large language models to change the way travellers discover, compare and ultimately book hotels.
AHICE Global Conferences Group President, James Wilkinson, said the conversation around Japan had moved decisively beyond recovery.
“A few years ago, much of the conversation was about when international travellers would return. That question has been answered,” Wilkinson said.
“The focus now is where hotels should be developed, how projects can stack up in a high-cost environment and how technology can lift productivity without losing hospitality’s human element. There remains enormous confidence in Japan, but the next phase will be about the quality of growth, not simply the quantity.”
Beyond business, the programme brought sport, design and fashion to the stage. Former Japanese Winter Olympian and Kamui Resort Director Gota Miura shared stories and skiing demonstrations; Bridgerton Set Decorator Natalie Papageorgiadis traced her path from luxury hotel design to film and television; and AllSaints founder Stuart Trevor staged a show of recycled and reimagined clothing while discussing fashion, sustainability and hospitality.
On the back of solid demand, AHICE Far East Asia will return to Tokyo in 2027 in early September.
“Tokyo is an incredible city with so much global demand and we are excited to reveal AHICE Far East Asia will be back in Tokyo next September,” Wilkinson said.
“Tokyo is not only the home of AHICE Far East Asia, it’s one of the most dynamic and exciting cities in the world and we are proud to call it our home.”
AHICE Far East Asia will return in September 2027, with the venue to be announced, and Wilkinson said the event would build on its first three years and continue to grow year on year.