- The number of inbound tourists has recovered to around 65% of 2019 levels, and should continue improving as border control measures were removed, although further recovery will depend on the return of tourists from mainland China.
- The ADR index has improved significantly, and has surpassed 2019 levels in many cases, particularly high-end ones.
- Total spending by domestic tourists has recovered to 2019 levels, although the number of tourists, especially day trip ones, has declined. Per-person spending of overnight tourists has increased by around 10%.
- Average per-person spending of inbound tourists has increased by more than 50% for many nationalities - a result of robust pent-up demand and a greater proportion of wealthy tourists.
- The overall ryokan market is vast, but also fragmented and without dominant players, which has led to growing interest in the luxury ryokan segment.
- Investment volumes in 1H/2023 surpassed that of 1H/2022, and there were a number of large transactions that took place this year, with more deals expected going forward.
- The hospitality sector has been robust, but MICE events and banqueting have yet to return in full, and the sector also faces challenges, primarily labour shortages and rising operating costs.
Significant recovery observed, but with multiple challenges ahead
Hotel room rates have recovered significantly, even leapfrogging pre-pandemic levels in the case of luxury hotels due to the release of pent-up demand from wealthy travellers. Nevertheless, MICE events and banqueting have yet to recover in full, and the hospitality sector still has hurdles to overcome, such as labour shortages and rising operating costs. Overall performance will likely remain strong but also dependent on the hotel grade and market.
Savills Research & Consultancy