China’s largest low-cost carrier (LCC) Spring Airlines will build a hotel at the Chubu Central Japan International Airport (Centrair Airport) in Tokoname City, Aichi Prefecture, Japan. The planned hotel will have 250-300 rooms and 14 floors and will open in 2016 or 2017. Spring Airlines decided to build its own hotel, a rare move for an airline, after considering the recent spike in foreign visitors to Japan and the shortage of urban hotel supplies.
Spring Airlines is already in negotiations with Aichi Prefectural businesses and hopes to obtain a site on the artificial island where the airport is located and start construction within the year. The planned site measures 48,000 square meters and comprises two lots adjacent to an existing hotel and is within walking distance of the terminal.
Centrair Airport at Tokoname City, Japan
The number of Chinese tour groups and independent travelers visiting Japan has been increasing non-stop. Spring Airlines inaugurated scheduled flights from Centrair Airport to five major Chinese cities including Shanghai in June this year. It has stationed two medium-sized planes at Centrair Airport and plans to increase its number of stationed planes next year.
Hotel occupancy rates in downtown Nagoya City, 30 minutes by train to Centrair Airport, are as high as 80%-90% and the three hotels on the airport island are often fully booked, prompting Spring Airlines to enter the local hotel market to not only solve the hotel shortage for Chinese visitors but create another revenue source from hotel operation.
It is rare for an LCC to get involved in the hotel business as the LCC business model is based on offering lower costs than traditional carriers and reacting rapidly to traffic to improve load factor and meet customer needs. By building and operating an airport hotel in a foreign market, Spring Airlines will enter a whole new playing field and will have to adapt accordingly.(Translation by David)