Japan’s hotel industry has benefitted substantially through the devaluation of the Japanese yen, experiencing four consecutive years of double-digit percentage growth in gross operating profit per available room, according to STR.
As reported in STR’s Profitability Review, Japan’s GOPPAR reached JPY12,512.18 in 2015, the country’s highest GOPPAR value since the time of the global financial crisis in 2008.
STR analysts point to a clear correlation between the devaluation of the yen in addition to Japan’s increase in international arrivals.
According to Tourism Economics, the country welcomed nearly 20 million overnight tourists in 2015, a 47 per cent increase compared with the previous year.
Of those arrivals, the main source markets were China, South Korea, Taiwan in addition to the US.
Currencies for the aforementioned countries all gained in value against the Japanese yen in 2015, generating travel to Japan cheaper.
Although the yen has regained some value in 2016, Tourism Economics is usually projecting an increase of 17.8 per cent in overnight tourist arrivals for the year.
In terms of hotel performance, Japan posted a 4.6 per cent increase in revenue per available room through the first nine months of 2016, driven by a 6.5 per cent rise in average daily rate to JPY15,226.89.
Occupancy declined slightly to 82 per cent compared with the same year-to-date time period last year, however 2015 marked Japan’s highest full-year occupancy level on record.
Thus, the comparison base is usually exceptionally strong.
“Interest in Japan as a destination has dramatically increased in recent years,” said Shiori Sakurai, STR’s business development manager for Japan.
“The extended period of cheaper travel to the country has created long-term benefits for the tourism in addition to hospitality industries, which will hopefully continue as the yen picks up in value along with the demand increase of overseas travel through Asia to Japan.”
Looking ahead, Japan currently has 61 hotel projects in addition to 16,426 rooms inside three phases of the development pipeline.
Almost half of that will development is usually in Tokyo, with 23 projects in addition to 6,001 rooms, as the city prepares to host the 2020 Summer Olympics.