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In Tokyo, where it’s difficult to find a decent room for less than 6,000 yen a night, foreign backpackers and other budget travelers go to the day-laborer district.

Taito Ward’s Sanya district, where homeless people sleep on street corners, is filled with economy inns, many renovated during the economic bubble in response to the increasing incomes of the workers that once filled their rooms.

Now threatened by declining occupancy rates due to the protracted economic slump, these inns are undergoing a metamorphosis to survive. Their traditional clients, many over age 65 and unable to find work, are fast disappearing, and tourists are proving a good bet.

In the middle of the district is one example of the change. Hotel New Koyo, a former day-laborers’ inn, is now famous as the cheapest hotel catering to foreigners in Tokyo.

Foreign backpackers check in at Hotel New Koyo.

The 75-room inn charges just 2,500 yen, including tax, for its most basic accommodations — two tatami mats and a TV.

Hotel New Koyo is frequently packed with over 60 foreign backpackers and thrifty travelers — mainly from Europe, the United States and Australia — many of whom have made reservations from overseas through the inn’s Internet home page.

According to owner Hiroyuki Kiyama, 46, the design of the 18-year-old inn is ideal for backpackers and others traveling on the cheap, as it is fitted with kitchens and washing machines. His hotel’s guests, however, do not seem to require much.

“I can stay in Tokyo for the price of one CD. It’s unbelievable,” said 33-year-old Beverly Roberts, a British traveler. “I don’t need good service or a nice room for my trip, just a reasonable price and the chance to exchange information with other travelers. That’s what this place offers.”

A seasoned traveler and computer enthusiast, Kiyama decided to transform his inn into a budget tourist hotel after the occupancy rate fell below 80 percent and was expected to decline further.

After failing to attract domestic travelers, which Kiyama attributes to the nation’s decades-old idea of travel as a luxury, in July 1997 he opened up a home page to draw overseas visitors.

“I first targeted domestic travelers but many canceled their reservations after hearing that the hotel is located in Sanya,” he said. “Foreign travelers, however, tend to prefer more casual travel and wanted a place like this.”

Chris Younker, a 20-year-old Canadian, said seeing homeless people sleeping on the streets outside his hotel both surprised and fascinated him.

“I’d mind seeing people sleeping on streets if I was in my own country, but not many things here are familiar to me anyway,” he said.

After three years, the average occupancy rate is around 95 percent — among the highest of the 164 registered economy inns in the area, Kiyama boasted.

“(Hotel) New Koyo is one example of the change taking place in this area’s hotel industry,” said Yasuhiro Tamura, chairman of the local inn-owners’ association, “and it has become the most successful one due to (Kiyama’s) entrepreneurial spirit and, of course, his English skills.”

According to Tamura, who himself operates 12 inns and hotels, most of the area’s nearly 200 lodging houses used to be “silkworm shelves,” where around 10 workers slept on bunk beds in a common room.

During the economic boom of the late 1980s, when work was plenty, more than 100 inns renovated their buildings into modern, concrete structures with individual rooms, reflecting the increasing income of workers during the period. These renovations enabled the switch to the tourist-based business being pursued today.

Seeing the dramatic success of Hotel New Koyo, eight hotels in the area — including two run by Tamura — in June 1999 opened a joint home page to attract travelers from around the country.

Tamura said their advertising efforts have already seen results, bringing more young people and women who were in the past rarely among guests.

“Beside the fact that the rooms are quite small, usually the size of only two or three tatami mats, I don’t think regular travelers find any problem staying here,” Tamura said.

According to Katsuhisa Moriya, chief manager of the ward’s welfare department, lodging houses cannot survive on the business of day-laborers alone for much longer.

Twenty-two hotels have been forced to close down over the past decade, Tamura explained, and many of the surviving inns rely on the approximately 2,000 Sanya workers who receive a housing allowance from the Taito Ward Office.

That means severe competition among inns to fill the 7,000 rooms renting for between 800 yen and 3,000 yen a night in the district.

The situation, Tamura said, is unhealthy. As it stands, the majority of occupants at more than 50 lodges qualify for the housing allowance of up to 2,200 yen per day, but given the ward’s severe budget situation, the welfare program cannot be maintained for long, he said.

Meanwhile, many of Sanya’s total 5,000 day-laborers do not receive such welfare payments and some have been forced to live on the street. Of Taito Ward’s 1,600 homeless people, 95 percent are estimated to be day-laborers.

Tamura further cited the aging of workers as a downside factors. With 60 percent of the day-laborer population over 65, many face an eventual move out of the area’s inns and into hospitals.

Some, meanwhile, just die. “On average, one person at my hotel dies every month due to causes related to old age,” the owner of one 450-bed inn said.

Moriya of the welfare department believes the day-laborer population is likely to disappear from the area within 10 years.

“The influx of workers to Sanya has already stopped due to job scarcity, while all the current inhabitants will be eligible for public nursing homes within a decade,” he said. “Sanya, one of the symbols of postwar economic growth, is now destined to disappear with the end of that growth.”

Tamura is more optimistic about the situation. “We must find more diverse and lasting clients,” he said, “and to that end, we must make every effort to create the image of Sanya — not as a town of day-laborers and homeless people but as an economy hotel district.”

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