Japan’s Hotel Prices Hit Record Highs, Fuelled by Weak Yen and Import Inflation
In 2024, the average hotel room rate in Japan reached 22,880 yen, an 18% year‑on‑year increase and the highest level in 27 years. In major tourist and business hubs such as Tokyo, premium hotels have seen price hikes of more than 15%, while business hotels are running at or near full capacity, triggering what local media call the “business‑trip refugee” phenomenon—where employees struggle to find affordable lodging for work travel.
Weak yen and rising room prices
The yen’s prolonged weakness against major currencies has made Japan a bargain destination for foreign tourists, boosting demand at a time when supply has not kept pace. As more overseas visitors arrive, hotels can charge higher prices, especially in central districts of Tokyo, Osaka, and Kyoto, where occupancy rates remain near record highs.
Because many hotel inputs—such as imported food, beverages, equipment, and energy—are priced in foreign currencies, the weaker yen pushes up operating costs. These costs are increasingly passed through to room rates, turning foreign‑exchange depreciation into imported inflation in the hospitality sector.
Importing inflation into Japan
Hotel price increases are now a visible channel through which imported inflation is entering the broader Japanese economy. When foreign‑denominated costs rise and the yen stays weak, businesses face a choice: absorb the losses or raise prices. In the hotel industry, the latter has become the norm.
This dynamic is particularly pronounced in Japan because the country imports a large share of its energy and many consumer goods, so any sustained currency depreciation amplifies cost‑push pressures across services and retail. As long as the yen remains under pressure, economists expect room prices to continue rising, especially in peak seasons and major cities.
Broader implications for households and firms
For Japanese households, higher hotel prices mean more expensive domestic travel and business trips, squeezing already tight budgets. For companies, the “business‑trip refugee” problem raises travel and accommodation costs, which can feed into higher operating expenses and, ultimately, higher prices for goods and services.
From a macroeconomic perspective, this illustrates how exchange‑rate movements can translate directly into domestic inflation, even in an economy long associated with deflation. If the Bank of Japan maintains a relatively accommodative stance while the yen stays weak, imported‑inflation pressures via sectors like tourism and hospitality are likely to persist.
發表文章
