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Investors eye Japan's famous 'love hotels'

February 20, 2005

Japan's "love hotels"are hard to miss. Clustered around freeway ramps and dotting the suburbs, the neon-lit hotels often look like faux castles or garish villas from the Arabian Nights.

Customers slip into the windowless hotels without showing their faces or giving their identities, usually exercising discretion in their liaisons.

The hotels are no small affair for Japan, though. Numbering some 19,000, love hotels are a pillar of Japan's economy, thought to provide more tax revenue than all other industries except pachinko parlors, the noisy betting venues filled with pinball-like games.

Sky-high real estate prices in Japan help shed light on the abundance of love hotels. The country's 120 million people crowd together in a land the size of California. Many families live with several generations cramped under one roof. Researchers say that more than half the love-hotel clientele is married couples or young unmarried couples with nowhere to go.

Most love hotels are mom-and-pop businesses with an average of 10 to 25 rooms, although some have as many as 80. Chains are few, usually with no more than two dozen hotels each. In general, rooms rent for two or three hours, averaging about US$66 a stay. Overnight stays are possible at a higher rate.

So it is of note that some of Japan's love hotels face hard times. The owners got bank financing from the go-go 1980s, then plunged into other business. Now they struggle to make payments and can'n upgrade their rooms to the amorous needs of 21st-century consumers. That's where foreign investors come in.

"The gaudy look is out of date. The buildings themselves are changing,"said Hirofumi Sasaki, an architect with a Tokyo firm that specializes in love-hotel design. "Anything that looks like a castle is out of date."

Modern love hotels look like European rooming houses, jungle-draped lodges or windowless office towers. The rooms often have themes, such as tropical resort, watery grotto or Asian getaway. Huge bathrooms contain scents and dried flowers, ready to throw in the whirlpool tub. 

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