Japanese hotels target long-stay guests amid coronavirus pandemic

The Yomiuri Shimbun
A room at the Imperial Hotel Tokyo in Chiyoda Ward, Tokyo

Hotels that launched long-stay plans as part of efforts to increase occupancy rates amid the pandemic-triggered slump in travel demand have seen demand increase among people who want to self-isolate to avoid infecting family members, as well as among the intended target of telecommuters.

The Imperial Hotel Tokyo in Chiyoda Ward expanded its long-stay service to all 349 rooms of the Imperial Hotel Tower on Saturday. The hotel launched a 30-night plan in February last year, with prices starting at ¥360,000, and all 99 rooms were reserved on the day the plan was launched.

The service was expanded to 165 rooms in May, and the occupancy rate remained high at 80%, prompting the hotel to offer long-term plans for all rooms until the end of March next year.

“The rooms are mainly used by teleworkers, but there is also demand among people who need temporary accommodations during home renovations and holidaymakers who want an alternative to a cruise,” said an employee who was surprised by the higher-than-expected demand.

Even though the prices of long-stay plans are less than half the normal rate per night, a major advantage is that the hotel “can expect steady revenue because the season or day of the week has little impact on demand,” the employee said.

At the end of last year, Hotel New Otani Tokyo in the capital’s Chiyoda Ward renovated three rooms to be used exclusively for long-stay guests, installing kitchens and washing machines. The top-end rooms start at ¥2.8 million for 30 nights and are expected to be used by corporate executives.

Entrance exams

According to the Japan Tourism Agency, the occupancy rate of domestic lodging facilities in Japan dropped from 62.7% in 2019 to 34.3% in 2020.

The industry views long-stay plans as one of the few ways it can survive.

According to a survey by long-stay booking website Monthly Hotel, the average price for a stay of one week or longer is ¥3,448 per night, and 50% of guests who use such plans are company employees.

According to the site, the main reason people use such plans is for telecommuting or so-called workations, but some guests use the plans to avoid contact with children who are preparing for entrance exams to mitigate the risk of coronavirus infection.

A 40-year-old man who moved in Tokyo last year said, “I stayed in a hotel in Tokyo for about three months until I found a good place.”

The 38-room Hotel Meldia Ogikubo in Suginami Ward, Tokyo, soon plans to start offering long-stay plans. “If we can foresee future demand, it will help raise the morale of our employees,” said a manager of the hotel, adding that costs would be kept down because rooms with long-stay guests do not have to be cleaned as frequently.

In October, Rihga Royal Hotels teamed up with a nursing home operator to offer a 30-night plan at its flagship hotel in Osaka, where guests can receive rehabilitation treatment, with prices starting at ¥1.96 million.

Ryuji Sawada of PwC Consulting LLC said, “Even after travel demand returns to normal, many hotels may want to mitigate the risk of future pandemics by continuing to attract long-stay guests.”