Hankyu Realty has given up on plans to build apartments on the site of the former Kyoto Kokusai Hotel after facing strong opposition from Kyoto City officials who want to see a new hotel built instead.
The development site is located in a prime position across the street from the east entrance to Nijo Castle in the centre of Kyoto.
The Kyoto Kokusai Hotel opened in 1961. The owner and operator, Fujita Kanko, decided to close the hotel and sell the property in 2014 due to a decline in the revenue-per-room and the ageing structure.
After the sale to Hankyu, the city raised concerns about a shortage in the supply of hotel rooms, particularly at a time when foreign tourist numbers were increasing, and urged the developer to consider building a hotel rather than apartments. Hankyu acquiesced and will sell the 7,500 sqm site to a hotel developer. Although pricing is not public, a site of this size may have a market value of around 8 billion Yen (65 million USD) or more.
In 2014, the number of foreign tourists staying in hotels in Kyoto increased by 62% from 2013 to 1,830,000. The city hopes to attract 3,000,000 foreign hotel guests by 2020.
The Sankei Shimbun, August 2, 2015.
The Asahi Shimbun, July 27, 2015.
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