TOKYO – Japanese real estate investment trusts with hotels in their portfolios collapse as the novel coronavirus pushes travelers away.
Three of four hotel REITs reporting revenue in January saw year-over-year declines. On January 27, the Chinese government banned group travel abroad, sparking a wave of cancellations.
Ichigo Hotel REIT Investment said Tuesday that revenue per room fell 10% year-on-year in January. Hotel bookings in Osaka in particular suffered from cancellations from Chinese visitors, as well as lower traffic from South Korea.
Invincible Investment’s per-room revenue fell 5% in Japan.
Japan Hotel REIT Investment’s figure fell 1% in January and could fall by more than 20% this month. “The cancellations could come from travelers other than those from China,” said Hisashi Furukawa, chairman of affiliate asset manager Japan Hotel REIT Advisors.
Meanwhile, Ooedo Onsen Reit Investment recorded a 4% growth in turnover per room. Foreign tourist groups contribute only about 1% of the total, isolating the spa specialist from the fallout from the coronavirus.
REIT stock prices have fallen sharply so far this year. Invincible Investment is down 20% since late 2019, while Ichigo Hotel is down 18%.