Osaka hotel occupancy rate surges as people flood in from Tokyo

Bloomberg

Hotels in Osaka are in high demand as residents and companies leave Tokyo to seek shelter amid concerns over radiation leaks after the nation’s worst earthquake.

The St. Regis Osaka, where daily room rates start at ¥70,000 this week, is fully booked for the entire week, while the banquet hall at the Swissotel Nankai Hotel was transformed into a temporary office, officials at the hotels said. All serviced apartments at Divio Osaka are occupied for this month.

Concerns over radiation leaks at the damaged Fukushima nuclear plant after the quake and tsunami on March 11 prompted workers at companies such as Blackstone Group LP and BNP Paribas SA to leave the capital.

Radiation levels remain normal in Osaka, 600 km from the Fukushima No. 1 nuclear power plant, providing shelter for companies and residents from Tokyo, the country’s biggest financial hub that once drew away businesses including Resona Holdings Inc.

“We have seen an increase of residents from Tokyo,” said Kumiko Fukushima, a St. Regis spokeswoman, adding that the hotel is booked for an entire week for the first time since it opened in October. “The inquiries from both Japanese and foreign companies about accommodating rooms for their employees are rising.”

The St. Regis usually fills 70 to 80 percent of its 160 rooms, Fukushima said. The average stay also has lengthened to four to five nights from two to three, she said.

At the Swissotel Nankai, a European financial company has set up a temporary office in its ballroom, said Michiko Fujikawa, a spokeswoman of the property, declining to provide the firm’s name.

The property, owned by Fairmont Raffles Holdings International, has received “more than a few” inquires from both Japanese and foreign companies in Tokyo since March 14, Fujikawa said. The 548-room hotel also is fully booked and has allocated as many as 60 rooms for each company, she said.

“Right after the quake, we got a lot of cancellations,” Fujikawa said. “Now we don’t have enough rooms.”

Measurements taken as of noon Wednesday by five monitoring devices at Kyoto University’s Reactor Institute in Kumatori, southern Osaka, show radiation in the city remained at normal levels, said Tomoyuki Takahashi, a researcher.

The prefecture on March 15 asked the institute, which doesn’t disclose precise figures, to report radiation levels hourly, he said.

SAP AG, the world’s biggest business software company, said it has reserved 520 rooms in Osaka and Kobe that employees and their families can use.

Austria’s ambassador in Japan is leaving Tokyo because of the reactors’ “unpredictability” and will work from Osaka, the state-run Austrian Press Agency reported. The German government said it is moving part of its embassy operations to Osaka.

The 292-room Ritz-Carlton Osaka had “a substantial increase in the hotel occupancy rate,” said Mutsuko Akesaka, a spokeswoman for the hotel. “Many of our guests are families with children from the Tokyo metropolitan area.”

The surge in visitors may be an added boost for Osaka, where the biggest building boom in two decades includes the construction of a business and shopping complex that will add 557,000 sq. meters of space.

Over the years, companies including Resona Holdings Inc., the banking units of Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. moved their headquarters to Tokyo from Osaka.

“Companies will have to seek to diversify their allocation,” said Tomohiko Sawayanagi, Tokyo-based managing director of Jones Lang LaSalle Hotels. “Many corporations may want to keep functions in Osaka if anything similar to this happens again.”

Divio Osaka has received “more inquiries than usual” since March 15, said Haruka Nakatani, a manager at the property. The 14-room serviced residence is fully booked until April, compared with its average occupancy rate of 70 percent, she said.

“Many of the inquiries are from families with children and some even with pets,” Nakatani said. “We had to turn them away.”