Across from a noodle shop in a Yokohama suburb, Hisayoshi Teramura's inn looks much like any other small lodging that dots the port city. Occasionally, it's even mistaken for a love hotel by couples hankering for some time beneath the sheets.

But Teramura's place is neither a love nest nor a pit stop for tired travelers. The white and grey tiled building is a corpse hotel, its 18 deceased guests tucked up in refrigerated coffins.

"We tell them we only have cold rooms," Teramura quips when asked how his staff respond to unwary lovers looking for a room.

The daily rate at Lastel, as it is known, is 12,000 yen ($157). For that fee, bereaved families can check in their dead while they wait their turn in the queue for one of the city's overworked crematoriums.

Death is a rare booming market in stagnant Japan and Teramura's new venture is just one example of how businessmen are trying to tap it.

In 2010, according to government records, 1.2 million people passed away, giving the country an annual death rate of 0.95 percent versus 0.84 percent in the United States, which is also the global average.

The rate of deaths is on the increase. Last year, there were an extra 55,000 dead and over the past decade, an average of 23,000 more people have died each year in Japan.

Annual deaths are expected to peak at 1.66 million in 2040 as the bulk of the nation's baby boomer generation expires. By then, Japan's population will have shrunk by around 20 million people, an unprecedented die off for a nation neither at war or blighted by famine.

Although two decades of economic malaise has weighed on incomes, a tradition on splashing out on ceremonies means the Japanese still pay an average of 1.2 million yen on flowers, urns, coffins and other funeral expenses. It adds up to a market worth a whopping $21 billion a year, or twice what Americans spend annually on funerals.

"There's been a rush into the market," says Teramura, who founded cemetery developer company Nichiryoku 45 years ago. Even Japan's second biggest retail chain, Aeon, rail companies and the nation's biggest farmers association, Japan Agriculture are getting into the business, he notes.

(Read by Christine Mallari. Christine Mallari is a journalist at the China Daily Website.)

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(Agencies)