Japan hotel occupancy rate rises to 84.2% in H1 2025

Occupancy is almost at the pre-pandemic peak level.

In a report, Savills revealed that occupancy in Japan’s hotel sector continues to improve over the past half year, rising by 1.0ppts HoH to 84.2%, gradually climbing towards the prepandemic peak ultra-high level.

“While the labour shortage has somewhat constrained hotels from reaching optimal occupancy, especially regional areas or resort destinations, various measures have been implemented, most notably, improvements in compensations and working conditions,” the report said.

Here’s more from Savills:

In addition, the Japanese government has been ramping up efforts to welcome foreign labour. According to the Ministry of Health, Labor and Welfare, the number of foreign workers reached 2.3 million as of October 2024, the highest since 2007, marking an increase of 250,000 workers from the previous year. Hotels have also been leveraging on technology to reduce the need for hotel staff.

Hotel performance in Japan is anticipated to progress steadily in 2025. Inbound tourists’ arrivals in 1H/2025 has exceeded that from the same period of last year and looks on track to break the 40 million mark. Expo 2025 is playing a key role in attracting a large influx of tourists to Osaka, with visitors reaching 10 million in July 2025, on target to achieve the ambitious goal of 28 million by the end of the event in October 2025. 

Moreover, Expo 2025 visitors tend to venture beyond Osaka City to explore nearby regional areas, generating broader economic benefits across the Kansai region. Elsewhere, Junglia Okinawa, a large nature adventure theme park, opened in July 2025, is expected to attract both domestic and inbound visitors, which will boost demand for hotel and related sector in the prefecture.