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[Tom MoodyParticipant]

Japan hotel operators turn historical buildings into trendy stays

OSAKA — Japanese hotel operators are rushing to develop new types of accommodations from historical buildings in the Kansai region in anticipation of more foreign tourists.

The Kansai region in western Japan, which includes Osaka, Kyoto and several other prefectures, is rich in historically important buildings.

Foreign tourists visiting the region are expected to grow thanks to the 2025 World Exposition in Osaka and the planned opening of a casino resort in 2030.

The trend to use historical buildings for overseas tourists comes as domestic hotel operators face increased competition from foreign rivals in the local market.

Candeo Hospitality Management, a hotel operator based in Tokyo’s Minato Ward, opened its Candeo Hotels Osaka Shinsaibashi in Osaka on Nov. 26.

Candeo Hotels is a unique facility that integrates a historical Buddhist temple into the premises. It was conceived to service inbound tourists to Shinsaibashi, a district widely known as a battleground among hotel operators in the city.

Candeo Hospitality Management CEO Teruaki Hozumi stressed the need for “charm that rival hotels don’t have.”

The hotel is housed in a commercial complex with one basement floor and 15 above-ground floors. The site was built on the grounds of Mitsutera temple and covers the Buddhist temple’s main hall.

The 180-room hotel occupies the fourth and higher floors and features a sauna and open-air bath on the top floor.

The hotel and temple are partnering to offer hotel guests an “eshakyo” experience, which combines transcriptions of sutra with the coloring of Buddha illustrations, along with morning prayers.

Housing the hotel on its grounds is hugely beneficial to Mitsutera temple.

According to the temple, it costs several hundred million yen to rejuvenate the main hall every five to 10 years. Maintaining it has depended largely on donations — a pillar of revenue for many temples — which are dwindling and need to be supplemented by rental revenue.

Candeo Hospitality also opened Candeo Hotels Kyoto Karasuma Rokkaku in June 2021, a renovation of a traditional townhouse in the culturally rich city of Kyoto.

The historical structure has been designated as a “registered tangible cultural property.”

Kyoto Karasuma Rokkaku is popular among foreign guests, who state they can get a taste of traditional Japanese culture there. Candeo Hospitality says that reservations are “humming along” as the effects of the COVID-19 pandemic wane.

Luxury hotel operator Hoshino Resorts also plans to open a new hotel in the spring of 2026 after renovating the now-closed Nara Prison, which has been designated as an “important cultural property.”

The site of the former prison is located in Nara, a city in the Kansai region. The inside will be refurbished without changing the architectural style of its solitary confinement cells, which have high ceilings and small windows.

Hoshino Resorts will operate the new hotel under its Hoshinoya luxury brand, targeting wealthy tourists from Western countries.

The Ministry of Justice sold the rights to the former prison in 2017, with Hoshino Resorts acquiring operating rights in 2019. According to the company, the prison-turned-hotel will be Japan’s first of its kind and a rarity in the world.

Hoshino Resorts CEO Yoshiharu Hoshino said, “We want our guests to spend their time comfortably while still feeling that it was once a prison.”

Meanwhile, foreign hotel operators are also eager to open new hotels in the Kansai region due to the 2025 Osaka Kansai Expo and the planned casino resort.

A dual-branded hotel that contains one of U.S.-based hotel chain Marriott International’s brands opened in Nara in August, while Thai conglomerate Central Group also opened a new hotel in Osaka in July.

Singapore’s Capella Hotel Group will also expand into Kyoto in 2025.

As competition from foreign rivals heats up, Japanese hotel operators are under pressure to find different ways to attract wealthy overseas tourists.

According to Japan’s Agency for Cultural Affairs, the Kansai region is home to 1.8 times more “registered tangible cultural properties” that remain as structures than the Kanto region on a prefecture basis.

The Kansai region includes Osaka, Kyoto and four other prefectures, while the Kanto region — located in the eastern part of Honshu, the main island of Japan — comprises Tokyo and six other prefectures.

As the Kansai region has a penchant for putting historical buildings to practical use, there is a possibility that more historically themed accommodations will be made.

“More than just a sleeping space, guests often want a special experience from hotels. Hence, unique hotel development projects will continue to increase,” said Toru Azuma, a Rikkyo University professor familiar with tourism marketing.

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