Recession or Not, Love Hotels in Japan Doing Booming Business

TOKYO—Found: A recession-proof industry. Love hotels. Operators prefer to call them Leisure hotels.

There are an extimated 25,000 of them throughout Japan, all of them surviving and many even thriving in the country’s worst recession in 60 years.

Steve Mansfield, CEO of New Perspectives, tells CNN the love hotel industry has proven “very resilient over the last six to nine months.” Mansfield’s company operates six properties.

One of them, the Bonita Hotel in Isawa, boasts a 257 percent occupancy rate. Rooms are rented by the hour. Full-day rentals are not uncommon.

Mansfield's company estimates the industry in Japan pulls in $40 billion a year in revenue.
He tells CNN, "It's a natural human desire. Even these days, on the weekend, every love hotel is full of people -- it's hard to get in.”

Mansfield says love hotels fill a need for privacy in a country where high population density often means couples have little time alone.

Rooms offer a broad assortment of features, including karaoke machines, PlayStation game consoles, DVD players, a variety of cosmetics, customized condoms and indoor-outdoor Jacuzzis.

Though required by law to have a front desk, most rooms can be rented and entered without talking to a clerk.

The days of Japanese being ashamed to enter love hotels are coming to an end, though, Mansfield said.

"Seventy-five percent of our guests are members of our points program," he said. "They carry our points cards, they collect points and they receive gifts. That's something people are very comfortable with, and I think that reflects the customers that we attract."

Takashi Yamamoto, who designs love hotels in Tokyo, agrees.

He tells CNN, "The bad image that love hotels had has faded over time. Also, customers started to raise their voices and became more selective about choosing hotels. In response, management has improved."

The flashiest love hotels are found in Osaka, including a Hello Kitty-themed hotel and one with a room featuring a merry-go-round.

Tokyo hotels tend to be tamer, focused on winning customers with amenities. The Style A Hotel, for example, offers a suite for $190 that includes a full-size Jacuzzi and a private sauna.

Though young couples make up the majority of customers, they are not the only ones. One man, who declined to be named, told CNN, "I go to love hotels when I'm drunk and don't feel like going home."

Whatever the reasons, the hotels have been doing well enough that Mansfield recently went to London, seeking investors to expand.

"Through our research we've worked out that 90 percent of owners have five or fewer hotels," he says.

Mansfield estimates there is plenty of room for expansion in this unheralded industry in Japan.