Public Relations Commission warns 15 luxury hotels in Tokyo ― Industry governance that forgot corona support in the shadow of the booming inbound tourism
On April 16, 2025, the Japan Fair Trade Commission (JFTC) plans to issue a warning on suspicion of violating the Antimonopoly Act over the issue of 15 luxury hotels in Tokyo regularly sharing inside information such as room occupancy rates and average room rates. (Photo: Palace Hotel Tokyo)
The target of the warning is 15 luxury hotels operating in Tokyo. For decades, these hotels reportedly held monthly meetings with sales representatives to share information on each hotel's lodging data and pricing.
Hotels Alerted
"Asakusa View Hotel, Grand Nikko Tokyo Daiba, Keio Plaza Hotel, The Prince Park Tower Tokyo, Sheraton Miyako Hotel Tokyo, Cerulean Tower Tokyu Hotel, Daiichi Hotel Tokyo, Imperial Hotel Tokyo, Hyatt Regency Tokyo, Palace Hotel Tokyo, Hotel Okura Tokyo, Hotel Chinzanso Tokyo, Hotel New Otani Hotel Metropolitan Royal Park Hotel"
At this point, there has been no clear cartel activity in which a direct agreement was made to raise or maintain prices, but the FTC believes that "such an exchange of information may have substantially hindered competition and affected price formation" and is ready to urge the prevention of recurrence.
Behind the fruits of corona support and inbound recovery, market fairness doubts
In the early days of the pandemic, the hotel industry was severely affected by the disappearance of tourism demand. As part of its support for the industry, the government implemented large-scale public measures such as "Go To Travel" and "National Travel Support" to support management.
These systems subsidize a certain percentage of the travel fee, and the discount amount is relatively large for high-priced accommodations. In addition to the actual expenses from guests, the amount of public support received will also increase, so it is possible that the luxury hotels that were the subject of this warning have secured substantial profits since the Corona disaster.
From the second half of 2022 onward, the implementation of nationwide travel support and the resumption of inbound tourism have led to a recovery in demand for accommodations, especially in urban areas. In 2024, the occupancy rate and unit price of accommodation in Tokyo were recorded at the highest level ever. According to a survey by the Tokyo Hotel Association, the occupancy rate in November 2024 was 91.6% and the average room price was 20,048 yen, both record highs.
At Palace Hotel Tokyo, which was the subject of a warning by the Public Trade Commission, the average room rate in the first half of 2024 (January ~ June) exceeded 100,000 yen for the first time, confirming that the price increase in luxury hotels is even more remarkable.
Challenges in balancing reliability and market competition
The luxury hotel industry has maintained its operations under public support from the beginning to the end of the pandemic and is now increasing its profit level as demand recovers. Under such circumstances, the continuous sharing of information on accommodation records and price policies showed that a structure that undermines market fairness was preserved.
Rates for luxury hotels are quoted on the premise of brand credibility. Its reliability is one of the fundamental elements of a hotel. Amid calls into question the health of the competitive environment, the 15 companies that were the subject of this warning highlighted the fragility of governance, despite their superficial brand value.
