- The number of inbound tourists in Q4/2023 surpassed the previous peak of Q4/2019, even with the number of Chinese tourists at less than half of pre-pandemic levels, showing strong potential for further growth.
- The ADR and RevPAR indices have surpassed 2019 levels, although occupancy levels still lag behind.
- Hotel supply is forecast to be at its lowest since 2015, and predominantly consisting of budget hotels.
- Average spending per inbound tourist has increased notably, aided by the weak yen. While a stronger yen might dampen spending levels, the improved services and facilities in the country should help to keep them elevated.
- Investment volumes in 2023 have hit a two-decade high, with overseas investors playing a significant role in the market.
- The luxury hotel segment has been the focus of many large deals announced in 2023, and is expected to see greater levels of attention going forward as the country looks to lure more high-spending tourists.
- The labour shortage is improving, albeit slowly, and may dampen hotel supply plans.
New highs attained, but labour shortage problems persist
The hotel market has hit a new high ADR level, and the luxury hotel sector is thriving with more high-spending inbound tourists. However, the labour shortage is proving persistent, and further improvements look to be gradual, particularly for full-service hotels. Nonetheless, the limited supply, especially that of high-end hotels, bodes well for the higher-end segment.
Savills Research & Consultancy