APPD Market Report Article


May 26, 2024

Kuraudo Ohashi, Executive Vice President Head of Advisory, Japan


JPY 52,839


Tokyo’s total visitor nights exceed pre-pandemic levels

  • Japan has continued to record pent-up demand, given the weak Japanese yen, making the destination appealing. With continued improved airlift, Tokyo has counted approximately six times the number of international visitor nights than those in 2023, exceeding pre-pandemic levels by more than 20%. In January 2024, international visitor nights increased by 65% y-o-y.
  • On the flip side of outbound demand that has yet to return to pre-pandemic levels due to the weak Japanese yen and other factors, domestic demand remains strong, representing 60% of the total visitor nights in the city as of YTD January 2024, above 2019 levels by 21%.

Two notable hotel openings in Q1 2024

  • In the first quarter of 2024, two hotels opened in Tokyo, one of which was the 126-key Hyatt House Tokyo Shibuya in February. The other, Janu Tokyo, is located in Azabudai Hills, just steps away from Roppongi, which opened in March. This world’s first “Aman” sister brand hotel adds 122 keys to the market. This brings the upscale and above hotel supply to 22,881 keys at the end of March 2024.
  • No upscale or luxury hotels are scheduled to open in 2024, but some luxury hotels, such as JW Marriott and Fairmont, are scheduled to open in 2025 onwards.

RevPAR improves due to higher ADR

  • Tokyo registered a continued increase in trading performance in all hotel segments in the first three months of the year. The rising number of tourists in the city has led to a significant improvement in the average daily rate (ADR).
  • Following the trend through the last year, hotels in Tokyo registered high levels of ADR in the first quarter, offsetting the occupancy rate that is still below pre-pandemic levels. As a result, RevPAR continued to exceed pre-pandemic levels.

Outlook: ADR growth to continue beyond Q2 despite some concerns

  • The strong travel momentum witnessed in Tokyo is anticipated to continue in 2024. As a result, occupancy in Tokyo hotels should pick up slowly along with the increasing number of international tourists, which will complement the strong domestic demand base, and ADR is expected to grow further.
  • On the other hand, the ongoing conflicts in various parts of the world and changes in exchange rate trends may affect the number of foreign visitors to Japan.

Note: Tokyo Hotels refers to Tokyo's luxury and upper upscale hotel market.

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