Despite a construction boom, Tokyo could be short as many as 14,000 rooms given an expected surge of Olympics-related tourism, according to researchers.
Local officials think one solution could be to put people up in giant ships temporarily docked off Tokyo and nearby Yokohama during the Games.
Among those on board with the idea is Japan's largest travel agency JTB, which has chartered the 1,011-cabin Sun Princess for the Olympic period, complete with everything from jacuzzis to a theatre.
The agency is offering packages that combine rooms with Olympic event tickets, but they don't come cheap.
The agency said it was confident about demand, partly because "we will have a shortage of hotels of a certain standard", said Minoru Kuge, head of JTB's Tokyo2020 Project Office.
"Although we can't disclose the actual numbers, we have received an excellent reaction from our customers", he told AFP on a tour of the luxury ship.
And Kuge said he expected the package to have a special draw -- "a sense of unity" among customers who will all be cheering on Olympic athletes.
Elsewhere, plans have been negotiated for the 928-cabin Explorer Dream ship to dock in Kawasaki.
And both Tokyo's local government and officials in Chiba Prefecture, east of the capital, are looking into additional cruise ship possibilities.
Japan's hotel business law bans rooms without a window, but the health ministry last year issued an ordinance that allows ships with windowless cabins to be used as hotels during major events.
But experts warn that a few cruise ships may not be enough.
"It is unclear if hotels ships in the Tokyo Bay will be able to cover hotel rooms shortage," warned a report on the issue published in October by Mizuho Research Institute.
Even the number of tourists the capital can expect remains unclear because the increase in Olympic visitors may be balanced out by other tourists opting to stay away until the Games are done.
Regardless, Tokyo officials see the ships as a novel accommodation solution, and are also planning to open a new cruise ship terminal days before the Games began.
Officials and industry experts hope using docked ships for extra hotel space will become common in the country, as a way to cater to visitors during special events, or even help people displaced during disasters.
"If a provincial city wants to host an international convention or other big events but doesn't have enough accommodation, hotel ships can be a solution," said Yoshimi Tajima, JTB's senior official at the corporate business department.