Tokyo hotel vacancies down to 19.3% in Q1 | Real Estate Asia
, Japan

Tokyo hotel vacancies down to 19.3% in Q1

It was a moderate improvement from the 40% vacancy rate the previous quarter.

According to JLL, the ‘Go To Travel Campaign’, which boosted the recovery of accommodation demand in 4Q20 was suspended in December 2020 due to the third wave of COVID-19. As a result, the number of visitor nights by domestic guests in Tokyo, which was gradually recovering and marked -14.2% y-o-y in November 2020, dropped by -53.4% y-o-y as at February 2021.

The total number of international visitor arrivals has decreased by 98.3% y-o-y as at YTD March 2021, whilst the borders still remain closed to international tourists, and have done so since April 2020.

Here’s more from JLL:

No supply of four- or five-star hotels added in 1Q21

There were no new openings of luxury hotels in 1Q21. The opening of ‘Edition Hotel Ginza’ scheduled for the spring of 2021 was postponed to the second half of 2021.

Although accommodation demand is currently sluggish due to the continuing outbreak of COVID-19, international luxury hotel operators take a long-term perspective in Tokyo, and several luxury hotels are scheduled to open in Tokyo over the next few years.

Sluggish market performance continues for Tokyo Luxury hotels

According to STR, revenue per available room (RevPAR) of Tokyo luxury hotels decreased by 62.2% y-o-y in 1Q21. The y-o-y decline widened from the previous quarter of -59.7%.

Under the second state of emergency, the occupancy of Tokyo luxury hotels has declined to 19.3% in 1Q21 from nearly 40% in 4Q20. Average daily rate (ADR) has been decreasing for 13 consecutive months, though the rate of decline in 1Q21 was less severe than the previous quarter, when the impact of the demand drop following the 2019 Rugby World Cup was observed.

Outlook: Trading performance remains uncertain

A third state of emergency was declared on 25 April, and the hotel market remains challenged. It is expected that trading performance in Tokyo will improve gradually when demand for domestic travel starts to resume along with the COVID-19 vaccinations rollout.

With regards to the hotel investment market, while investor’s appetite for bargain-assets are strong, hotel asset prices has not been heavily discounted in the current market. Therefore, it is expected the hotel transaction will likely remain suppressed.

Note: Tokyo Hotels refers to Tokyo's luxury hotel market.

 

Follow the links for more news on

Join Real Estate Asia community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Exclusives

How Metland Indonesia deals with weaker residential purchasing power
The real estate firm continues to expand with residences that are attractive to consumers because of pricing, the ‘growing house’ concept, and sustainable features.

Event News

Event News

Real Estate Asia Awards 2023 Winner: Henderson Land Development Company Limited
Henderson Land Development Company Limited wins big at the Real Estate Asia Awards 2023 taking home 3 notable accolades, the Developer of the Year, Mixed-Use Development of the Year, and Residential Development of the Year awards for Hong Kong.
Real Estate Asia Awards 2023 Winner: Henderson Land Development Company Limited
Henderson Land Development Company Limited wins big at the Real Estate Asia Awards 2023 taking home 3 notable accolades, the Developer of the Year, Mixed-Use Development of the Year, and Residential Development of the Year awards for Hong Kong.