Despite a slight dip in overall inbound visitor numbers, Japan’s hotel room rates continue to climb, driven by resilient foreign tourism demand and distinct regional disparities between Tokyo and Osaka.

According to data released on October 3 by the Nihon Keizai Shimbun (Nikkei)—citing a survey by hotel data analytics firm STR—the average daily rate (ADR) for hotels across Japan reached 20,657 yen (approximately $135 USD) in September. This represents an 8.8% increase compared to the same month last year.

Industry analysts attribute this upward pressure to strong accommodation demand from international travelers. September typically marks the onset of the autumn foliage season, which attracts leisure travelers, alongside a surge in business events, international conferences, and exhibitions.

Divergent Trends: Tokyo Prices Rise While Osaka Drops

Regional performance varied significantly across the country:

Tokyo: The average room rate in Tokyo Prefecture rose 8.4% year-on-year to 28,276 yen (roughly $185 USD).
Osaka: Conversely, Osaka Prefecture experienced a sharp downturn, with average room rates plunging 19.7% to 18,762 yen (roughly $122 USD)—creating a gap of about 80,000 won ($58 USD) between the two major destinations.
The steep drop in Osaka’s lodging costs is primarily a correction from last year's spike. In September of the previous year, the Osaka-Kansai Expo was nearing its October closing, driving temporary lodging demand to historic highs. This year's numbers reflect a return to normalcy from those inflated figures.

Additionally, a decline in Chinese tourists has weighed heavily on Osaka's hospitality sector. Because Osaka historically relies more heavily on visitors from China than Tokyo does, it remains more sensitive to shifts in Chinese travel demand. Market experts note, however, that this 20% drop represents an overall statistical average rather than a universal decline across every individual hotel in the city.

South Koreans Set New Record as Chinese Arrivals Plummet

Data from the Japan National Tourism Organization (JNTO) shows that the total number of foreign visitors from January to September dipped 2.9% year-on-year to 30,730,200.

This overall decrease was largely fueled by a dramatic 55.5% drop in Chinese travelers over the same nine-month period. Observers point to ongoing diplomatic friction between Beijing and Tokyo since last November, coupled with official travel advisories and scaled-back flight capacities, as the primary drivers behind the slump.

In sharp contrast, South Korean travelers have driven an unprecedented tourism boom in Japan. In September alone, 842,300 South Koreans visited the country—a 25.6% jump from the previous year and the highest September figure on record. While Chinese arrivals fell by 44.5% in the same month, South Korea firmly cemented its position as the leading source of foreign tourists to Japan.

Outlook for Japan's Hospitality Sector

Even with a minor contraction in total aggregate visitors, shifts in traveler nationalities, localized destination choices, and sustained lodging demand have kept hotel prices on an upward trajectory.

Industry insiders expect this trend to persist. Shiori Sakurai, head of Japan market analysis at STR, noted that foreign tourist demand continues to prop up room rates, predicting a moderate, single-digit growth trend through the upcoming spring season.

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