Section L Hamamatsucho

Repositioning during the COVID-19 pandemic, converting to a long-stay apartment hotel, and achieving profitability.

‍A long-stay apartment hotel converted from a 20-year-old condominium (change of use). It combines the functionality of a living space with the comfort of a hotel, and all rooms are equipped with a kitchen, washer-dryer, and living/dining area. The interiors feature high-end Danish furniture from BoConcept and HAY, and local art and illustration art pieces adorn the guest rooms and lobby, allowing guests to enjoy a fresh and colorfully designed space.
WEB SITE:https://section-l.co/hamamatsucho/

‍Transition to Long-Stay Accommodation: A Revenue Improvement Strategy Targeting Inbound Demand

‍The previous management mispositioned the property, getting caught in a price war with hotels focused solely on short stays, resulting in a 2021 performance with a 96% occupancy rate but an ADR of only 4,024 yen, indicating stagnant profitability. However, given that the property was already equipped with residential-style facilities including a sink, toilet, and washbasin, we determined that converting it into a long-stay accommodation for inbound travelers would lead to improved profitability. Furthermore, although the property was acquired during the COVID-19 pandemic, anticipating the recovery of inbound tourism demand post-pandemic, we proceeded with developing a facility that caters to the needs of international visitors seeking long stays of 7 nights or more.Partnering with a high-performing operator even during the pandemic and providing services tailored to the target audience.
By shifting our positioning from a short-stay focused hotel to a long-stay accommodation for inbound travelers and switching management to "Section L," which maintained strong performance even during the pandemic, we aimed to improve profitability. Guest rooms are equipped with facilities suitable for long stays, and the innovative design incorporating high-end Danish furniture and local art differentiates us from other hotels. Furthermore, we enhance both functionality and experiential value by promoting community building among guests through a dedicated app and events that connect them.

‍Attracting the intended target audience and achieving significant profit improvement.

‍Approximately 80-90% of guests are international visitors, successfully capturing inbound demand. In addition to its highly convenient location, the facilities suitable for long stays, such as kitchens and washer-dryers, are highly praised, with many guests staying for over a week. Through this target-oriented design and service provision, the ADR (Average Daily Rate) has recovered to more than five times its previous level, achieving profitability significantly exceeding projections.

Related Release

Investment in SECTION L completed, service apartment opened in Hamamatsucho in February 2023.