Business Hotels Expanding into Regional Areas in Japan, Aiming to Attract Tourists; Competition Likely to Intensify

By Shodai Niki / Yomiuri Shimbun Staff Writer

7:09 JST, February 22, 2026

Operators of business hotels, which are known for catering to travelling business people, are stepping up their expansion into regional areas, anticipating an increase in guests visiting not only for business but also for tourism.

Major business hotel chains are expected to establish a location in all prefectures in Japan, a move that is likely to intensify competition between the companies, which are seeking to differentiate themselves through the services they provide.

On Feb. 7, Toyoko Inn Co. opened its first hotel in Kochi Prefecture, which had been the only prefecture where it did not have a location. Forty years after opening its first hotel in Ota Ward, Tokyo, in 1986, the company now has a presence in every prefecture.

“We’d like to utilize the know-how we’ve cultivated to build connections with the local community so that we will become the hotel of choice for many customers,” said President Maiko Kuroda at a ceremony held at the new hotel.

Kochi Prefecture, which previously had no business hotels, has recently seen a series of plans by major companies to open new hotels.

APA Group, for example, plans to renovate an existing hotel in Kochi City in March and turn it into the prefecture’s first APA brand hotel. Route Inn Japan Co., meanwhile, is expected to open a hotel in Kochi Prefecture in the spring of 2027, following Toyoko Inn to have a location in every prefecture.

For many business hotel operators, Kochi is the only prefecture where they have not established a presence.

“There are few large factories here or business travelers from far away,” said an official of the Kochi prefectural government.

High occupancy rate

Since the 1960s, when the Japanese economy boomed, business hotels have proliferated to meet demand from business travelers. The hotels had been focusing on offering lower prices compared to conventional hotels with banquet halls and wedding venues.

In recent years, however, business hotels have been a popular accommodation choice among tourists, who praise their low prices and convenient access to transportation.

An increase in foreign visitors to Japan has been another driving force behind the opening of business hotels in regional areas. Visitors from Europe and the United States tend to stay longer and prefer to travel around regional areas. Local governments and other organizations are encouraging visitors to Japan to branch out into various regions as a measure to combat overtourism, and this has been another factor behind the development.

Companies are stepping up efforts to open hotels in regions where they have had a limited presence, believing that creating a nationwide network that allows customers to stay anywhere in Japan could help prevent customers from switching to other companies.

For 2024, the occupancy rate for business hotels is expected to reach 73.7%, according to the Japan Tourism Agency. That rate is higher than the average for all accommodation facilities — 59.6% — as such hotels attract both businesspeople and tourists.

Business hotels have traditionally competed on the strength of their location and low prices. In recent years, however, the trend has been for the hotels to differentiate themselves through interior design, food, facilities and services.

Dormy Inn and Richmond Hotels, for instance, plan to operate hotels equipped with large public baths and saunas. They aim to capture demand for accommodation from tourists, including foreigners, as well as business travelers by introducing facilities that meet the needs of their guests.

Toyoko Inn offers a lodging plan that includes an overnight stay package for guests who bring plush dolls, while Route Inn offers discounts on accommodation fees to students taking entrance exams.

Competition in services among business hotels is likely to intensify further.