Reinventing Japan’s Regional Hotels Through the Untapped Potential of Coworking Spaces

With the post-pandemic return of inbound tourism in Japan, I’ve once again found myself involved in various regional revitalization projects. One recent example involves helping Showa-era hotels in cities beyond Japan’s famed Golden Route (Tokyo, Nagoya, Osaka, Hiroshima, etc.) come up with ideas to attract contemporary visitors from abroad.

While my core ideas involve building an online presence from the ground up (request a free copy of my latest presentation here), a recent trip to the city of Toyokawa inspired me to share another way that struggling hotels can bring in some extra revenue: convert antiquated business centers, traditionally limited to guest use, into coworking spaces, open to the public. Fortunately, a case study for this idea already exists: the Toyokawa Grand Hotel.

How a Hotel Saved a Sole Proprietor

As a sole proprietor, I’m often working on the go. During the Obon holiday period, I found myself in Toyokawa with a need for a proper office space. There are, at the time of this writing, just a few coworking spaces in the city; however, all but one were closed for the holidays. I found the exception, much to my surprise, in a hotel located on the northern edge of the city: Square66 in the Toyokawa Grand Hotel.

Don’t let the outward appearance of this hotel fool you. It may look like a Showa-era holdover on the outside (and much of the inside as well), but Square66 is pristine—a cutting edge coworking space that rivals what you would find in Tokyo. In fact, unlike many Tokyo coworking spaces, many of the perks are free: second-screen monitors for laptops and cubicles are simply available on a first-come-first-served basis.

Of course, all the coworking basics are covered as well: open seating, free drinks, high-speed Wi-Fi, printers/scanners, and more. All of this is available for the incredibly non-Tokyo price of 1,100 yen per day (hourly rates are also available).

From Cost Center to Revenue Generator

The scenery just outside the Toyokawa Grand Hotel: idyllic surroundings for a day at the "office"

I didn’t write this article to promote this coworking space or hotel, as I have no official agreement to do so. Instead, I’m sharing this novel facility in hopes that it will inspire other hotel operators in Japan to think of clever ways to utilize their real estate and facilities, beyond simply seeking more overnight guests.

Coworking spaces, part of a growing industry, can generate revenue during all hours of the day as well as monthly membership revenue, all while utilizing existing hotel staff who would otherwise be spending their time maintaining virtually vacant business centers. Coworking spaces can widen a customer base beyond travelers simply in need of a place to stay for the night, instead transforming underutilized hotels into hubs for regional business communities. All it takes is a one-time renovation to head down this path.

This concept doesn’t stop here. Just imagine: if 90s-era business centers can become coworking spaces, we must wonder what other outdated facilities can be converted from cost centers to revenue generators.