Frasers Hospitality's Tokyo debut part of growth strategy to expand to business gateway cities

Business Times

2 days ago

[TOKYO] Although the completion of Frasers Hospitality's newest accommodation in Japan, Yotel Tokyo Ginza, was delayed by four years, it was a blessing in disguise.
Since its opening last December, the hotel has tapped into Japan's surging tourism boom on the back of a weaker yen, an outcome that Jason Leong, head of investment and asset management at Frasers Hospitality, described as better than expected.
Occupancy for the hotel is about 70 per cent on average, a good performance for a hotel that has been in business for only six months, he said.
Yotel Tokyo Ginza is part of a broader strategy by Frasers Hospitality to expand its footprint. In July 2024, the group announced plans to add 20 properties to its portfolio over the next four years, including nine slated to open in China and Vietnam within the next two years.
Frasers Hospitality, a strategic business unit of Frasers Property, manages over 100 properties across more than 20 countries, with a presence largely in the Asia-Pacific and Europe. The properties range from hotels to serviced apartments and premium rental apartments.
Leong's comments were made in an interview with The Business Times in Tokyo, a day after the official opening of Yotel Tokyo Ginza on Jun 9.
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The 244-room hotel, Frasers Hospitality's first investment and development project in Japan, is located in the popular Ginza shopping district. A collaboration between Frasers Hospitality and British hotel operator Yotel, the property sits on what was previously a car park, which was acquired in 2018.
The hotel was originally intended to open in time for the Tokyo Summer Olympics in 2021, but pandemic-related delays and rising construction costs prompted Frasers Hospitality to hold off on the plan. The pause enabled the company to refine the hotel's concept and positioning. 'And we are quite glad to have opened it now, when the (tourism) market is booming,' said Leong.
Launched in June 2025, Yotel Tokyo Ginza is Frasers Hospitality's first investment and development project in Japan. PHOTO: FRASERS HOSPITALITY
Generating returns
The Yotel partnership reflects Frasers Hospitality's wider real estate strategy, which is to be 'brand agnostic' in the area of partnerships.
'Whenever we look at an acquisition, the question we ask is: 'How can I maximise the value of this asset or what I'm building?'' he said.
This means that the company must find the best operator, outside of Frasers itself, or within, to manage and operate a property to drive the best capital appreciation over time, said Leong, noting that the focus of the company's real estate business is on generating returns from physical assets.
While Frasers Hospitality prefers to use its own brand for longer-stay assets such as serviced apartments and premium rental units – given that it has already built up its branding in this segment – it is open to relying on third-party operators for shorter-term stay hotels such as Yotel Tokyo Ginza.
The group's investment strategy is focused on global business gateway cities such as Tokyo, Shanghai and London, which give access to the broader region.
Changing traveller preferences
Frasers Hospitality's core audience includes corporate travellers and free, independent travellers. The latter prefer customised experiences over tour groups, and are willing to pay a premium for unique lifestyle offerings.
They also travel less frequently, but for longer stretches, partly due to the flexibility of remote work. Guests want smart IT systems to support remote work, but also the opportunity to live like a local. These preferences shape how Frasers Hospitality curates its programmes for its properties.
'That's where Frasers Hospitality can offer or work with different operators to find a business model that suits (the needs of) these travellers,' said Leong.
The profile of travellers in the extended-stay segment has also changed. Expatriates with families once dominated this segment, but today's travellers tend to be solo professionals on three- to six-month corporate projects, or independent business travellers relocating for two to three years without company sponsorship. They also want the opportunity to immerse themselves in the local culture.
Frasers Hospitality has tailored offerings in the extended-stay space for these groups.
For instance, Modena by Fraser Shenzhen, a premium rental apartment in China that soft launched in March, targets business travellers on mid- to long-term assignments, and also those who want a higher standard of living without purchasing property. The property provides dedicated zones for activities such as yoga and gaming, as well as community programmes that bring residents together.
Market considerations
Beyond guest experience, market factors such as interest rates, growth potential and timing of entry play a critical role in investment decisions.
However, this does not mean that Frasers Hospitality wants to grow for the sake of growing, said Leong. 'We very much want to grow to a relevant scale (in existing markets), but subject to the right conditions.'
This means anchoring itself in markets that are business gateway cities and focusing on 'quality projects' that can generate returns, he said.
When asked about how the ongoing privatisation attempt of Frasers Hospitality Trust (FHT) would affect Frasers Hospitality's operations, he declined to comment. Frasers Hospitality manages the properties of FHT, which is in the middle of a privatisation attempt by its sponsor, Frasers Property.
However, Leong said that the group adopts a long-term business view on all its assets, including that of Frasers Hospitality.