Business

Under new rules, government to help finance hotels amid tourism boom

Kyodo

The government said Tuesday it will help finance the building of hotels in large cities by private developers as part of its efforts to meet demand amid a boom in foreign visitors.

The government aims to attract 40 million foreign visitors in 2020 when Tokyo hosts the Olympic and Paralympic Games, up from a record 24.04 million in 2016.

Major cities like Tokyo and Osaka already struggle to meet demand for hotel rooms at peak periods, with occupancy rates exceeding 80 percent on an annual basis.

Currently the Organization for Promoting Urban Development, an entity overseen by the Ministry of Land, Infrastructure, Transport and Tourism, only provides financial support for the construction of facilities such as schools, libraries, hospitals and nursing homes, and only in areas outside Tokyo, Osaka and Nagoya.

The government will revise the rules to enable it to finance — starting in April — up to 50 percent of the cost of building tourist accommodation facilities with a total floor space of at least 2,000 sq meters in areas designated as urban development zones.

Developers will have to repay the money within 20 years of the completion of the facility, and be required to provide green areas and public spaces near the accommodations they build.