Budget inns start going up-market to lure guests

by Tomoko Arima

Kyodo News

Budget hotels, once known as places with narrow baths and beds, are transforming themselves by installing outdoor bathtubs, high-grade furniture and other distinctive services.

The transformation reflects attempts to attract people on business trips and new tourists in the face of the recession.

Budget hotel chain Dormy Inn is popular for the large baths at 34 of its 36 hotels across the country. At the Tokyo Hacchobori hotel, there is an outdoor tub resembling a hot spa.

“It’s popular because you can soak in a bath stretching out your legs. The number of repeat visitors is increasing sharply,” said Shigeru Yamada, a director of Kyoritsu Group Co., which runs the chain.

Remm Hibiya, which the Hankyu-Hanshin-Daiichi Hotel Group opened in Tokyo in 2007, makes its appeal based on healing and good sleep. All guest rooms are equipped with floors on which guests can walk barefoot, massage chairs and high-grade beds. Showers said to be effective for relaxing have also been installed.

Even amid the economic slump, Remm Hibiya’s occupancy rate has risen from 72.8 percent in the initial fiscal year to 80.4 percent in fiscal 2008. A hotel representative said, “Regular customers have been increasing because we’ve made clear our objective.”

Last year, the company opened a second hotel in the Akihabara district and plans more expansion in the future.

In addition, some hotel chains are trying to attract customers by increasing the number of dishes for breakfast and allowing customers to choose their pillows.

Since the outbreak of the financial crisis last year, struggling companies have been cutting back on business trips and demand for budget hotels remains sluggish.

In some areas, there are hotels where lodgers have drastically decreased due to the closure or downsizing of factories.

But competition is intensifying in other areas. Hotels near Tokyo Station are offering packages that cost only around ¥3,000.

Hoteliers are eagerly courting domestic tourists. Some Dormy Inn inns have created rooms where people can stay with their pets and Japanese-style rooms for seniors. “There are no empty rooms on Saturdays or Sundays,” Kyoritsu Group’s Yamada said.

Remm Hibiya has succeeded in attracting theatergoers to the Tokyo Takarazuka Theater by setting aside a floor only for women.

Hotels are also reducing costs by rationalizing a number of items. Super Hotel Inc. is giving sweets to customers who do not want toothbrushes or bring chopsticks with them for dinner.

“It’s improving our image through such energy-saving and environment-oriented measures,” said another official.

“It’s very difficult to survive in the industry unless hotels come up with some outstanding features, such as better services or cheaper rates,” said Wataru Sakakibara, a senior consultant at Nomura Research Institute.