Data analytics company STR anticipates growth across Japan to continue at a more moderate rate into 2026 with sustained high occupancies holding rate opportunities.
Presenting at AHICE Far East Asia on Thursday, STR Regional Director – Asia Pacific ex China, Matthew Burke, said Japan’s performance continues to impress.
“Nine of the last 12 months recorded double digit ADR growth and eight for RevPAR,” Burke said.
“Continued growth of international tourism and a solid footing of domestic travel has supported both the major cities and regional areas. All metrics of growth have been decelerating through 2025 as such growth is unsustainable medium term.
“It is also true that June and July saw a distinct variation to overall growth in demand and ADR.
“Notable reductions from key source markets and a decline within the short-term booking window through this month contributed to occupancy for many markets turning negative and muted average rate growth. The manga rumour, a return of longer-term seasonal performance and weather underlying the performance.
“However, August has reflected a return to growth and forward occupancy on the books into the autumn are positive indicators that June and July are an anomaly but also a reflection of normalising of growth.
“Osaka is benefiting from Expo with exponential rate growth positively impacting all classes of properties.
“One major opportunity for Tokyo is that its luxury and upper upscale share of total inventory is small relative to its global peers. Whilst ADR in USD is the highest. An opportunity for investment provided the market fundamentals to high land and construction costs.”