|By Kaho Shimizu, Japan Times,
TokyoMcClatchy-Tribune Regional News
Aug. 29, 2007 - The opening Saturday of The Peninsula Tokyo in
Yurakucho, Chiyoda Ward, marks yet another top foreign luxury hotel
chain's foray into the capital of the world's second-largest economy.
Located near the Imperial Palace and Hibiya Park, The Peninsula Tokyo,
with 314 rooms, including 47 suites, five restaurants and a spa, is a
quick walk away from the glitzy Ginza shopping district.
"From Sept. 1, we have just one goal: to satisfy customers who
will continue to return to the Peninsula Tokyo," General Manager
Malcolm Thompson said during a media preview Tuesday. With competition
intensifying in Tokyo's international high-end hotel market, luxury
inns are under pressure to foster repeat patrons and to ensure they can
boast qualified staff at a time when the market is expanding.
Hong Kong-based Peninsula is the second foreign luxury hotel
to debut this year, following the March opening of the 248-room
Ritz-Carlton in the Tokyo Midtown commercial complex in Roppongi. The
last 15 years has witnessed a virtual Tokyo luxury hotel war, as the
world's top inns -- whose standard room rates range from
Â¥50,000 to Â¥70,000 -- opened in quick succession,
thanks to deregulation and the collapse of the bubble economy, which
triggered a fall in property prices and loan interest rates.
The trend became especially conspicuous after 2002, when Four
Seasons Hotel Tokyo, with 57 rooms, opened in the Marunouchi business
district. In 2003, the Grand Hyatt Tokyo opened in the Roppongi Hills
commercial complex with 389 rooms. This was quickly followed by the
openings of the 290-room Conrad Tokyo in nearby Shiodome in July 2005,
and the Mandarin Oriental Tokyo with 179 rooms in the Nihonbashi
financial district in Chuo Ward in December 2005.
The Shangri-La Hotel will make its Tokyo debut with 204 rooms
in Marunouchi in March 2009, becoming the last of the foreign luxury
entrants. But will there be enough customer demand? "I'm very
optimistic," Peninsula's Thompson said. "Tokyo still has a lot of
potential. More people are becoming wealthier and more able to utilize
international hotels." He also added that many international top-class
hotels that have already opened in Tokyo continue to boast high
While this does not necessarily translate into high
profitability, Thompson said foreign high-end hotels in Tokyo enjoy
high occupancies without having to lower room rates. The Mandarin
Oriental Tokyo is one such example. "Our hotel was not affected by the
opening of the Ritz-Carlton. On the contrary, we have better earnings
this year than last year," said Mandarin Oriental Tokyo spokeswoman
Chie Hayakawa. So far, Hayakawa said, the occupancy rate at Mandarin
Oriental Tokyo this year has been well above the 66 percent reported in
business 2005, with the average room rate surpassing
Â¥54,000. The hotel chain did not disclose its latest
"Having new hotels will provide customers with broader options
that will lead to stimulating the market," Hayakawa said. Even the
foreign hotels that were among the first to enter the market still
enjoy high room occupancy rates. The Park Hyatt Hotel in Shinjuku Ward
and The Westin Tokyo in Ebisu, Shibuya Ward, both of which opened in
1994, maintained an occupancy rate topping 75 percent between January
and June. Mizuho Corporate Bank analyst Masayoshi Yahagi said demand
for luxury hotels is still growing thanks to the rising number of
foreign visitors to Japan -- which hit an all-time high in 2006 -- and
the economic recovery.
The new international luxury inns, however, are posing a
threat to long-established top domestic hotels in Tokyo, including the
Imperial Hotel, Hotel New Otani and Hotel Okura. The prestigious
Imperial, just a short walk from the Peninsula, is now undergoing a
Â¥17 billion renovation that is slated for completion next
year in an apparent effort to survive the fierce competition.
Thompson is meanwhile confident customers will come to his new
hotel. "Peninsula and the Imperial Hotel offer different experiences,"
he said. "I'm sure there will be Peninsula customers who will go to
restaurants at the Imperial and customers there will come to our
Hotel analyst Mitsuyoshi Horaguchi, however, noted one hurdle
that foreign luxury hotel chains here face: a limited number of
talented personnel. "All the foreign-run luxury hotels are becoming the
same on the hardware side," said Horaguchi, an associate professor of
hotel management at Musashino University in Tokyo. "They have spacious
rooms decorated with contemporary art and they have spas and
restaurants that are similar to each other." That is when qualified
staff really comes into play, but ironically, because many foreign
luxury hotels have entered the market, it is becoming increasingly
difficult to retain good people.
Peninsula's Thompson agrees, saying training personnel is a priority. "We have an obligation, like all hotels, to train and develop more people."
To see more of the Japan Times or to subscribe to the newspaper, go to http://www.japantimes.co.jp/.
Copyright (c) 2007, Japan Times, Tokyo
Distributed by McClatchy-Tribune Information Services. For reprints, email firstname.lastname@example.org, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. Thailand:SHANG,