The government will promote construction of large hotels outside major cities as part of a drive to welcome 40 million foreign visitors a year by 2020, when Tokyo will host the Olympic and Paralympic Games.
The government of Prime Minister Shinzo Abe has made tourism a key pillar of its economic growth strategy. In 2015, a record 19.74 million foreign visitors arrived in Japan, compelling the government recently to double its target for the number of tourists it hopes to attract annually by 2020.
The average occupancy rate of hotels and inns across the nation stood at 60.5 percent in 2015, up 8.7 points from 2011, according to the Japan Tourism Agency.
To counter accommodation shortages and prepare for the future, the central government will request local governments to make changes to building regulations to permit larger hotels to be built in areas beyond Japan's three largest cities of Tokyo, Osaka and Nagoya, officials said.
Currently, each local government sets a limit on the ratio of a hotel's total floor area to the plot of land on which it sits. The upper limit of that ratio can range from 200 to 1,300 percent, depending on locality.
Redevelopment projects in central Tokyo and Osaka have already benefitted from eased floor-area ratios, and the Ministry of Land, Infrastructure, Transport and Tourism plans to notify local governments, possibly this summer, it is relaxing those guidelines, the officials said.
Additionally, to attract more foreigners to Japanese-style traditional ryokan inns in the countryside, which have more vacant rooms than hotels, the Japan Tourism Agency will offer up to ¥1 million ($9,210) per facility to subsidize the cost of remodeling Japanese-style squat toilets into Western-style ones or creating websites in foreign languages.
The government will also support work to transform old private houses or unused school buildings into accommodation facilities to expand lodging capacity, according to the officials.