- Rising vaccination rates indicate that global travel demand should start returning, albeit slowly.
- The path to recovery for the inbound tourism industry is expected to be complex with many stakeholders involved.
- While inbound tourism should return, considering the problems that over tourism brought prior to the pandemic, Japan might need to reconsider its old strategy that had a strong focus on quantity, not quality.
- The domestic leisure segment is expected to be the prime contributor to early recovery, driven by pent-up demand, excess household savings, and the potential return of the “Go To” campaign.
- New work styles and the prevalence of online meetings indicate that demand for business travel may not fully recover.
- If lodging demand increases rapidly, some hotels may struggle to rehire laid-off staff, imposing strains on their operations as a result.
- Strategic and opportunistic investors are eyeing opportunities to take advantage of the anticipated recovery.
Hospitality sector awaits the recovery
GRAPH 1 | Total room nights sold to domestic and inbound guests, 2007 to 2020
As more people get vaccinated, the return of travel demand is on the cards. Even so, considering the technical complexities in restarting global travel, and the uncertainties it brings, the path to normalcy is expected to be eventful. Nonetheless, this presents a great opportunity for well-prepared market participants.
Savills Research & Consultancy