JLL report shows confidence in Japan’s hotel recovery

Japan’s key hotel markets are showing strong signs of recovery led by growth in the high-end segment, according to a new report from global real estate service provider JLL.

In its 2023 report, JLL said the weak yen has particularly benefitted Japan, which has recorded a “significant resurgence of international and domestic tourists”.

JLL predicts Kyoto, pictured, will continue to grow in international visitation

Tokyo recorded 20.3 million international visitor nights over January to October 2023, representing a RevPAR of 109 per cent relative to 2019. Kyoto and Osaka performed similarly, showing a RevPAR of 107 per cent and 106 per cent respectively.

Kyoto, which has historically seen a higher ratio of international visitors than the national average of 20 per cent of total visitors, saw 2.6 million international visitor nights from January to August 2023, 13 per cent more than over the same period in 2019. Domestic visitor nights also exceeded the 2019 figure by 16 per cent.

JLL predicts Kyoto will enjoy “continued growth in international visitation coupled with rising domestic demand”, due to the opening of many luxury brands including Six Senses, Kyoto, Banyan Tree Kyoto Higashiyama and Regent Kyoto, as well as renovations at Kansai International Airport that will see annual international passenger capacity increase from 23 million to 40 million in 2025.

In Tokyo, the total number of international visitor nights over the period reached 20.3 million, 26 per cent more than pre-pandemic. And, although occupancy had decreased by nine per cent relative to 2019, it was still higher than Beijing, Shanghai, Hong Kong and Seoul, at 77.8 per cent. Tokyo’s market therefore has room to grow across all segments, for both leisure and business travellers, according to JLL.

Hotel recovery in Osaka, meanwhile, was driven by “the full recovery in domestic demand”, with international visitor nights from January to August 2023 reaching only 86 per cent of 2019 levels.

The trend reflects the city’s hotel market slowdown before the pandemic but an 11.7 per cent increase in total room inventory this year; the city’s hosting of the Expo 2025 Osaka, Kansai; and the opening of an integrated report in 2030 should attract more international visitors, said the report.

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