Originally Posted by
francophile
Just because there is a greater supply of luxury hotel rooms in Tokyo compared to New York doesn't mean that new luxury hotels cannot be opened in Tokyo and still make a reasonable profit.
I think your fundamental premise that Tokyo has a greater supply of luxury hotel rooms relative to NYC to be flawed. There are bigger and many more "luxury" hotels in NYC than in Tokyo. As for demand, I'm not sure what the demand looks like at the segment level, but passenger traffic at JFK-EWR-LGA combined is about 100 million passengers, and at HND-NRT is about 95 million, so they are about equal. If anything, equilibrium pricing in Tokyo ought to be higher than in NYC, given the cost of living and the relative supply/demand. But it isn't.