Tokyo Leads the Way in APAC Hotel Investment for 2025

Tokyo

Tokyo has been crowned the top city for hotel investment in the Asia Pacific (APAC) region, according to the CBRE’s 2025 Asia Pacific Hotel Investor Intentions Survey. The Japanese capital has overtaken other major cities in the region, including Sydney, Seoul, and Singapore, to secure the top spot, reflecting a strong surge in investor confidence driven by the city’s recovering tourism sector and strategic location as a key global business hub.

The 2025 survey reveals that Tokyo’s hotel market is a primary focal point for investors who see the city as an attractive proposition for both short-term returns and long-term growth. The capital’s established infrastructure, increasing international arrivals, and robust demand for hotel rooms continue to position Tokyo as a key player in the APAC hotel investment landscape. With Japan’s tourism sector on the rise and the country experiencing strong visitor arrivals, Tokyo’s hotel assets have become a highly sought-after commodity.

The surge in hotel investment activity is also being spurred by the growing international interest in Japan. Tokyo, in particular, is benefitting from a resurgence in inbound tourism as Japan reopens its doors to the world. In addition to the tourism boost, the city’s significant business and corporate travel demand remains strong, adding to its appeal for investors.

Steve Carroll, Head of Hotels, Capital Markets, Asia Pacific at CBRE, commented on the positive outlook, saying, “Investors have high expectations for pricing in the Tokyo hotel market in 2025. The increase in international arrivals and a rise in hotel room rates have further solidified the positive outlook for Tokyo’s hotel market, ensuring a steady growth in income for operators.”

The survey also revealed that a significant portion of investors—more than 72%—are planning to increase their hotel investment allocations in the APAC region. While Tokyo remains the top destination for hotel investments, there is also a broader interest in the upscale and upper midscale hotel segments across the region. The strong investor appetite for hotels that can offer both value and growth opportunities has driven increased attention to these segments, especially in well-established markets like Tokyo.

The report further highlighted that investors are becoming more focused on value-add strategies, looking for opportunities to rebrand, renovate, or redevelop hotel assets as they seek to maximize returns. With new development costs remaining high, these strategies are increasingly seen as attractive alternatives to starting from scratch. In Tokyo, the demand for redevelopment and rebranding opportunities is expected to continue growing, further cementing the city’s place as a hotbed for investment activity.

Despite global economic challenges, including inflation and interest rate uncertainties, Tokyo’s market resilience stands out. Investors are optimistic about Japan’s stable economy, improved tourism infrastructure, and the anticipated continued growth of international arrivals, particularly from neighboring countries in Asia.

With Tokyo firmly in the lead, the 2025 APAC hotel investment landscape looks set to be dominated by the city’s well-established and highly lucrative hotel market. As the demand for hotel rooms continues to rise, and as Tokyo strengthens its position as both a business and tourism hub, hotel investments in the city are expected to remain a top priority for investors in the APAC region for the foreseeable future.

As Tokyo remains the premier destination for hotel investments, it reflects the broader trend of recovery and growth within the hospitality sector across the Asia Pacific. Investors continue to look to Tokyo as a blueprint for success, with the city’s market dynamics and strong fundamentals promising both steady returns and long-term growth potential in the coming years.