The Hilton group said Tuesday it will open a hotel under its newest luxury brand in Kyoto in autumn 2021, counting on a further upswell in lodging demand from tourists even after the Tokyo Olympics this summer.
The timing of the planned opening for the first Asian hotel of LXR Hotels & Resorts might be a bit surprising as it will be launched more than a year after Japan hosts the world’s largest sporting event and the thousands of tourists it will attract from across the globe.
But Feisal Jaffer, global head of LXR Hotels & Resorts, said in an interview last Friday in Tokyo that the Hilton group expects current inbound tourism to Japan to continue booming beyond the 2020 Olympics and that Kyoto needs more high-class luxury hotels.
“The 2020 Olympics is going to be a showcase for Japan around the world. We think this is great marketing,” Jaffer told The Japan Times.
“We don’t think demand is going down after the Olympics. We think it’s only going to increase.” The company is also betting on the 2025 Osaka Expo and a planned expansion of Kansai International Airport, a gateway to the Kansai region.
The planned four-story hotel in Kyoto will feature 114 rooms at the foot of Mount Takagamine near Kinkakuji temple. It will be housed in Shozan Resort Kyoto, a sprawling estate that already has restaurants and a wedding facility.
Hilton hopes to scoop up rising demand in Kyoto, where it believes there is still a shortage of high-end accommodations.
“More luxury hotels are required. There’s only a handful of internationally branded (ones),” Jaffer said.
Indeed, the government wants more luxury hotels to be built around the country in an effort to lure in more foreign tourists. In December, Chief Cabinet Secretary Yoshihide Suga, who spearheads policy on tourism, told reporters the government hopes to “see new world-class hotels at some 50 locations,” citing the lack of such hotels.
He said the government will support the hotel development through a loan program included in a new economic stimulus package.
As of Tuesday, Japan had 34 five-star hotels listed on the Five Star Alliance booking site, which uses its own rating system, compared with 36 in Shanghai alone.
In Kyoto, both domestic and foreign luxury hotels have been popping up in the past few years. American chain Park Hyatt opened an inn last year, the Ritz Carlton in 2014 and the Four Seasons of Canada in 2016, to name a few examples.
Because those hotels opened only a couple of years ago, Jaffer said he is confident Hilton is “early in the game.”
“There are very few foreign brands in Kyoto, luxury brands, and so we think that there is plenty of room in the market for newcomers,” he said.
He said Hilton decided to bring its top luxury brand to Japan because of the country’s unique history, geography, culture and food.
“Kyoto showcases some of the best qualities in Japan,” Jaffer said. “It has rich heritage in so many different aspects. Even Japanese go to Kyoto many times in their lives.”
LXR, which joins Waldorf Astoria and Conrad in the top tier of Hilton’s portfolio, aims to offer an “authentic unique experience,”
The first LXR hotel was launched in Dubai in 2018, followed by openings in London and Anguilla of the Caribbean Sea. Hilton also plans to open an LXR in Mexico in 2023.
According to Tokyu Land Corp., which will manage the hotel on a franchise contract with Hilton, room rates cannot be disclosed yet but will be about the same as those offered by other foreign upscale hotels in the city.
Although there are no specific target guests, he reckons about 70 percent of the clientele will be international travelers.
The ratio of foreign tourists who stay overnight at major hotels in the city, including well-known pricey stays, continues to grow while that of Japanese tourists shows a downward trend, according to the Kyoto City Tourism Association.
In 2018, 43.9 percent of the guests at 52 major hotels were foreign nationals, up 15 percentage points from 2014 and the most since the survey began that year. Meanwhile, 56.1 percent were Japanese, down 15 points.
“The market of domestic travelers is in relative decline as the country’s population shrinks and more young people eschew going on a trip,” said Tomotsugu Mizukami, the association’s senior official.
During summer 2018, natural disasters like the torrential rain that swept across western Japan also curtailed Japanese tourist traffic to the Kansai region.
Kiyoshi Tsuchiya, director of hotels at real estate service giant CBRE, said wealthy foreign travelers are expected to drive growth in the luxury hotel segment in Kyoto as most guests at such inns come from overseas.
“Foreign travelers visiting Japan usually have a good impression of foreign luxury hotel brands and feel a sense of security about their quality and services,” Tsuchiya said. “Those hotels can also attract many guests from abroad through their global loyalty systems.”
Even after the Olympics, he said, economic growth in other Asian countries will increase the ranks of people who can afford to travel overseas, leading to higher demand for luxury hotels in Japan.