Where have the hotel guests gone?


Occupancy rates are dropping at the leading hotels in Tokyo, but considering the global hesitance to come to Japan and the local lower desire for luxury travel at the moment, I am still happy to see that 19 hotels in Tokyo can still attract visitors up to 40.5% average occupancy. Understand me right, I do not see these figures as positive sign, contrary as the drop in international business visitors will show negative effects in the near future on Japanese business, as well to areas not related to the hospitality sector. Actually the number had decreased since March (49.8%) and shows now the lowest figure since tracking of comparable data began in 1991 (according Nikkei Shimbun). Of course the figures do not even come close to 2010, when at the same time an average occupancy of 81.4% could be found.
Especially long-established hotels that focus on international business travelers are hardest hit. Occupancy rates dropped most at Hotel New Otani Tokyo from 58.9% a year earlier to 20.4%, then at Hotel Okura Tokyo from 60.6% to 27.9% and from 83.7% to 33.8% at Imperial Hotel, Tokyo. Due to its distance then Osaka, the average occupancy rate for 15 leading hotels dipped only 10.8 percentage points on the year to 73.1%. The number of vacation tour groups and foreign visitors dropped sharply, but hotels in this city fared better than those in Tokyo. While in the past Tokyo was looking down on Osaka based on the smaller economic power, since the earthquake Osaka is going through a rebirth phase. Companies have moved from Tokyo to Osaka, even some Japanese families have changed their place of residency.
The effects of Fukushima on the Japanese economy will not go away over night and I expect many local long-standing companies will face challenges for their survival. The question is now, which company can adjust quickly or then, which company has enough financial backup to survive a longer downturn in their turnover?

Brought to you by Sibylle Ito (シビル伊藤)

2 thoughts on “Where have the hotel guests gone?

  1. It has taken its toll, not only on large, but small companies too, myself included, although I was still surprised to see airfare still quite high coming from abroad to Japan.

    • Dear Elle Marie,

      you are absolutely right! Companies in Japan are effected by the disaster and the size does not matter. While in some areas companies closely connected with foreign contacts had come to a complete stop after the earthquake it seems now recently there is some recovery, in some cases even a new boom again. What I have heard from other sources though, some companies are still in the complete stand still mood. I think it still take a few more weeks until the business behavior in the new Japan starts to become normal.
      I can only assume that the frequency of the flights into Japan has decreased, because both airline tickets for my upcoming business trips are simply horrendous expensive even though it is just economy.

      Wishing you lots of luck that your business is turning around soon in your favor,

      Sibylle

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