- The number of inbound tourists in the first half of 2024 has surpassed the same period in 2019 and is on track to reach new highs.
- ADR and RevPAR keep hitting new highs. Occupancy started to improve with extensive recruiting and training efforts, which should gain more momentum.
- Apartment hotels are relatively new to Japan but they could emerge as a viable and more affordable option for families and those travelling in larger parties.
- While popular cities in Japan face overtourism, this problem could be overcome with proper direction to attract more visitors and redirect tourist traffic to lesser-known destinations that would benefit from more tourism.
- With the optimistic outlook for the hospitality sector, investment volumes in 1H/2024 exceeded 1H/2023 by approximately 50%, and international investors accounted for half.
- The chronic labour shortage is gradually easing as the hotel industry offers higher wages and better working conditions to attract more workers, leading to an improvement in occupancy rates.
Hotel sector continues strong performance
The hotel sector has continued on its upward trend, reaching new highs for ADR and RevPAR. This sustained robustness has also fuelled investment sentiment and volumes to historical highs. While overtourism is an issue in some popular areas, Japan has a wide and diverse array of locations that have not been discovered yet. More inbound tourists should be welcomed as long as they are properly distributed.
Savills Research & Consultancy