Growth continues, driven by robust inbound tourism demand

• In the first three quarters of 2025 (January to September), the number of foreign visitors to Japan reached 31,650,500, marking a 17.7% Y-o-Y increase. This is also the fastest time in nine months that the 30 million mark has been surpassed, despite a decline in foreign visitor numbers from some Asian countries in July compared to the previous year.
• According to JNTO, the total number of overnight stays in Tokyo through July 2025 marked a 4.2% y-o-y increase. The number of foreign overnight guests showed a 14.9% Y-o-Y increase, while the number of Japanese guests declined by 7.2% Y-o-Y.

Multiple international hotels open in Tokyo in the latter half of 2025

• Fairmont Tokyo, which marks Accor’s first luxury hotel in Japan, opened on July 1st.
• International hotel brands like JW Marriott Hotel Tokyo open on October 2nd and Caption by Hyatt Kabutocho Tokyo are slated to open in October. Additionally, Park Hyatt Tokyo, which has been closed since May 2024 for major renovations, will reopen on December 9th.

Continued record high performance

• In Q3 2025, Tokyo’s hotel sector demonstrated continued growth across all segments in terms of trading performance. The ongoing increase in inbound visitors has driven a sustained rise in ADR, while occupancy has also shown steady recovery.
• The luxury and upper upscale segments continued to show strong improvements compared to the same period in 2024. As of September YTD, both ADR and occupancy increased significantly Y-o-Y. Consequently, RevPAR saw a substantial growth of from the same time last year. However, ADR growth rate is showing signs of deceleration.

Outlook: Tokyo’s hotel industry performance likely to continue

• Although geopolitical risks continue to exist, uncertainty has receded following Q3 2025. Strong performance trends in Tokyo’s hotel industry are likely to continue from Q4 2025 onwards.
• ADR is expected to increase Y-o-Y in 2025, but it will be necessary to monitor whether the deceleration trend becomes more pronounced. Similarly for occupancy, it is expected to increase, with one contributing factor being the recovery in Chinese visitor numbers to Japan. However, as this special factor disappears from next year onwards, Occ may decelerate, lagging behind ADR.