JLL, a leading real state consulting firm, revealed at a market seminar in Tokyo that the occupancy rate (OCC) of hotels in Japan for the first nine months of 2025 was up 3.2 points year on year, and the average daily rate (ADR) was up 10.8%. Also, RevPAR rose by more than 15%.
RevPAR in luxury, upscale , mid-scale& limited service hotel categories continues growing after it recovered to the pre-pandemic level in the beginning of 2023.
In Tokyo, ADR was higher in 2025 than 2024 or 2019, while OCC remained lower than 2019. The trend was seen in other major cities in Japan. JLL said that Fukuoka and Sapporo may create new luxury markets because The Ritz-Carton Fukuoka and Intercontinental Sapporo recently opened.
ADR in Tokyo was $188.5, lower than $238.1 in Singapore, $305.9 in New York, $249.9 in London or $373.7 in Paris. It seems to be influenced by weak yen.
JLL calculated the ratio of new hotel supply to existing hotels, regarding as new hotels that are scheduled to open after July 2025 as of June 2025. The ratio in Japan was 1.7%, much lower than other APAC countries, like 21.3% in Vietnam. JLL explained that it is hard to say that new hotel supplies will increase in the next few years because of a rise in construction cost.
By city, the ratios were around 2% in Tokyo, Osaka, Kyoto and Fukuoka, but higher in Sapporo with 5% and Okinawa with 7%.
Growth in 2026 is conservative
JLL conducted a survey to hotel operators to forecast the market in 2026. The survey covered 832 hotels (41 in Japan) in 22 APAC countries, including Japan. According to the result, gross operating profit (GOP) of Japan is expected to increase by 4% in the same level as Vietnam, India or South Korea. JLL said that the biggest challenges are geopolitical uncertainty and severer competition.
80% of Japanese operators answered that OCC will exceeded the level in 2025, and 93% said that ADR will rise. The ratio of answers that gross operating revenue (GOR) will increase was 90%, almost the same as 93% in 2025, but the ratio of those that GOP will increase reduced from 95% in 2025 to 80%. JLL said that operators have conservative views for the future growth.
Japan is 3rd, and Tokyo is top in real estate investments
JLL also revealed that Japan was 3rd globally, Tokyo was top in the amount of real estate investments for the three quarters of 2025. JLL explained that investments to offices have been accelerating, as the data show that the ratio of investments to offices was 49%, much higher than the level before the Lehman Shock in 2007. The ratio of investments to hotels was down 10% from 20% a year ago.
Office rent in Tokyo is rising. According to JLL, one reason is that there is a demand for attractive, high-quality offices to attract talented personnel amidst a labor shortage, and other reason is that returns to working in the office have been increasing since the COVID-19 pandemic ended.
