25
ANNUAL REPORT 2014
MARKET REVIEW
Tokyo, J
apan
Hotel Property Sector as of 1 March 2015
TOKYO TOURISM MARKET
The number of foreign visitors to Japan for 2014 was
13,414,000, up by 29.4% yoy. This figure significantly exceeds
the highest record of 10,364,000 in 2013 by more than 3
million. The significant relaxation in the visa requirements,
expansion in the consumption tax exemption system,
increase in foreign demand due to the economic growth in
the Asian region, and the impression of trip to Japan being
highly affordable due to the progressive depreciation of the
Yen had contributed for the bump in the number of foreign
visitors to Japan in 2014.
Reviewing the numbers by nationality and area, visitors from
Taiwan (ranked 1st) increased by 28.0% to 2.83 million, visitors
from South Korea (ranked 2nd) increased by 12.2% to 2.76
million, and visitors from China (ranked 3rd) increased by
83.3% to 2.41 million, where all 3 countries had shown an
increase on a yoy basis.
The Japanese government has set a new target of 20 million
foreign visitors in 2020, expecting the effect of the 2020 Tokyo
Olympic Games/ Paralympics Games to benefit the country.
According to the survey on the number of tourists who had
visited Tokyo by the Bureau of Industrial and Labour Affairs
in Tokyo, the total number of tourists who had visited Tokyo
exceeded 512 million people in 2013, among which Japanese
tourists were 505.8 million people and foreign tourists were
6.81 people, showing an upward trend for both categories.
The amount the tourists had spent (tourism consumption)
in Tokyo in 2013 increased by 11.9% on a yoy comparison,
reaching approximately ¥5.2 trillion. It is expected that due to
the full-scale underlying recovery of the domestic economy
and due to the city of Tokyo hosting the 2020 Olympic
Games, this upward trend would further increase.
HOTEL MARKET PERFORMANCE
Domestic trends of the annual total number of guests based
on the latest data by Japan Tourism Agency are as follows:
The total number of guests in 2013 was 467.21 million with an
increase of 6.3% yoy. Among them, foreigners occupied 7.2%
with an increase of 1.2% yoy.
Top 3 in the total number of guests by nationality are Taiwan,
China, and South Korea. These top 3 as a whole accounts for
more than 45% of the total number. Reviewing the trends by
nationality, Thailand (yoy growth of 76.1%), Taiwan (yoy growth
of 62.8%), Hong Kong (yoy growth of 57.8%), and Malaysia
(yoy growth of 54.4%) have shown a significant growth.
Taiwan has marked the largest number in 2013, overtaking
China, which was top-ranked by number in the previous year.
The economy hotel occupancy rates in the whole of Japan
and Tokyo as of September 2014 are 74.5% and 83.7%
respectively, which have risen back from the drop due to the
effect of the Great East Japan Earthquake in 2011, showing a
steady trend in the recent hotel occupancy rate.
The accommodation unit price index which had once reached
its peak in 2007 had turned to a downward trend, but then has
turned to an upward once again since 2011. Accommodation
service price index has also maintained an upward trend
since 2011. With the underlying support of the recovery in
the domestic economy and the demand for accommodation
facilities due to the bump of foreign visitors, the environment
for hotel industry is showing a significant improvement, and
such trend is expected to further continue in the future.
EXISTING AND FUTURE HOTEL SUPPLY
Based on the latest data by Ministry of Health, Labour and
Welfare, the number of hotel rooms in Tokyo as of March
2014 stands at around 97,900 which represent a yoy growth of
around 2.1% and a 5-year CAGR of around 0.9%.
On the other hand, based on the industrial journal available,
it is announced that over approximately 10,500 hotel and
Ryokan rooms are planned to open in Tokyo until 2018.
For example, "Hotel Gracery Shinjuku" with 970 rooms in
Shinjuku-ku, Tokyo and "Hoshinoya Tokyo" with 84 rooms in
Chuo-ku, Tokyo are scheduled to open in April 2015 and 2016
respectively.
HOTEL MARKET OUTLOOK
As described above, due to the significant recovery of the
domestic leisure demand supported by various reasons such
as the recovery of the domestic economy and the bump of
foreign tourists visiting Japan, the environment for the hotel
market is showing a stable transition. The future outlook is
also favourable with 2020 Tokyo Olympic Games which is also
expected to expand such positive trend in the future.
A certain level of hotel development plans including under
construction and new opening hotels in a few years are
scheduled in Tokyo, while the corporate service price index
(accommodation service price index) has shown a significant
increase for the period up to November 2014 mentioned in
Hotel Market Performance.
It had been observed in both cities of Beijing in 2008 and
London in 2012 that hosting the Olympic Games would
provide a positive impact to ADR and RevPAR for the hotels
within the city, which would imply that further improvement
can be expected in the hotel operation performances in Tokyo
towards 2020 when the city will be hosting the Olympic Games.
Based on such favourable trend, the trading market is also
showing active movements, expanding such enthusiasm in
central Tokyo area not only to other major cities but also to
the local cities where a certain level of yield can be expected,
and such trend is expected to continue in the future.
