January 14, 2022

Japan’s hospitality industry is growing rapidly as newcomers join the fray to take advantage of the tourism boom

Fears of a housing shortage ahead of the Tokyo 2020 Olympics and Paralympics are quickly becoming a thing of the past as companies ranging from clothing brands to wedding service providers enter the hospitality industry.

Coupled with the expected expansion of the minpaku private accommodation market As a law setting rules for the nascent service goes into effect in June, there are now fears of an oversupply of housing, which could trigger a price war.

According to real estate market research firm CBRE KK, the number of hotel rooms in eight major cities, including Tokyo, Osaka and Kyoto, is expected to total 330,000 by the end of 2020, up 32 percent from the previous year. end of 2016.

A number of large Japanese and foreign hotel chains and non-hotel operators are planning to open accommodation facilities amid the continued influx of foreign tourists to the country. The number of foreign visitors to Japan reached a record 28.69 million in 2017, up from 8.61 million in 2010.

An example of a newcomer is the large clothing company Stripe International Inc., which in February opened a hotel and store in Tokyo’s bustling Shibuya shopping district.

“We want to tap the demand from foreigners with this hotel and its Japanese-style interior design,” said Naomi Shinonaga, creative director of the company that managed the project.

Wedding service provider Take and Give Needs Co. also opened an accommodation facility in Shibuya, while outdoor equipment provider Snow Peak Inc. established a facility in Yokosuka, Kanagawa Prefecture.

Ryohin Keikaku Co., operator of the Muji household goods store chain, plans to open a hotel in Tokyo’s upscale Ginza shopping district by spring 2019.

Meanwhile, the minpaku market is expected to continue to expand with e-commerce company Rakuten Inc., travel agency JTB Corp. and rail operator Keio Corp. venturing into the area.

Yasuyuki Tanabe, Japanese director of US online home rental service Airbnb Inc., said the new law regulating services involving paid accommodation in private homes “will give impetus to the expansion of the private accommodation market. ” in the country.

Airbnb has partnered with Recruit Holdings Co., which provides housing information, in an effort to secure a large number of properties.

Movements in the hospitality and private accommodation sectors prompted the Mizuho Research Institute to declare at the end of January that “there will be no shortage of hotel rooms in 2020”.

The big cities are not the only ones where the hotel industry is developing.

One example is the town of Beppu in Oita Prefecture, famous for its hot springs, hotels and resorts. Local and international hotel chains thrive as foreign tourists flock to the region renowned for sites such as the “Beppu Underworld,” a series of colorful and hot natural pools.

Tourists plummeted in 2016 after nearby Kumamoto was hit by major earthquakes in April, but they were back to a record high in 2017. South Koreans drove the 130% increase in tourism. number of non-Japanese travelers staying in Beppu in the past five years.

InterContinental Hotels Group is one of the companies looking to take advantage of this. The company she runs jointly with All Nippon Airways is slated to open an 89-room luxury hotel next year.

“Beppu is one of the most famous spas in the world, but it did not have an internationally renowned luxury hotel,” said Hans Heijligers, CEO of ING ANA Hotels Group Japan. “The rich Japanese market is very attractive, and inbound tourism is also booming. “

Elsewhere in Beppu, the luxury chain Hoshino Resorts is building a hotel and Oedo Onsen has renovated an old property. The current boom will increase the number of hotel rooms in the city to 5,030 in 2019, from the current 4,400, according to the Beppu City Ryokan and Hotel Association.

With five matches of next year’s Rugby World Cup slated for in nearby Oita, those venues may be needed.

The city’s largest hotel isn’t worried about new investment and new competition.

“It is an attractive city and we are delighted about it. We can make money if they come and make it even more attractive, ”said Koichi Sasaki, general manager of Suginoi Hotel and Resort, which has 647 rooms. The hotel has a 100 percent occupancy rate since 2014, and is currently renovating its conference space.

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