The rising demand for transient accommodations as well as high land and construction costs have driven Japan developers to think outside of the box without breaking the bank.
Japan is set to beat the record 13.4 million visitors tracked in 2014, reports Japan Times. Given the weak yen and less stringent visa requirements for some Asian countries, Japan is reportedly on target to beat their previous year record. However, the current inventory of accommodations in Tokyo is insufficient to house the rising number of tourists.
Data from STR Global, a research firm for the hotel industry, showed that Tokyo has around 100,000 hotel rooms, with only 7,600 scheduled to be added within the next three years, reports Reuters. The inventory will not be enough, especially since the Japan government is also aiming to attract 20 million visitors by 2020 - the year when Tokyo is set to host the Olympics. Developers are reportedly looking into converting old office buildings into tiny, yet stylish hotel accommodations, wherein room rental cost will be lower than a cheap business hotel. Yukari Sasaki, senior managing officer at property developer Sankei Building Co., said that this was an ideal way to respond to the immediate need for hotel rooms. Sasaki added, "Building a hotel from scratch costs too much money now because of high construction costs."
The Reuters reports also mentioned Sankei Building Co. previously converted a 35-year-old office building located in Tokyo's Akihabara district into a hotel. The renovation was completed in under a year and for less than $8 million. Sankei's hotel called "Grids," charges between 3,300 yen ($27) a night per person to 5,000 yen ($40). The rates vary depending on the room type. The room rental of the office-turned-hotel property are much lower than the average room rate at Tokyo's lowest ranked business hotels which is 9,500 yen ($76), as indicated in the STR Global report.
Although, Sankei's Grid hotel is reportedly set to be torn down to make way for an apartment building, states Reuters, Sankei is planning to convert more office buildings into affordable hotels.
