Strong tourism growth led by growing interest from diverse markets

• As of April 2024, the number of international guests had almost reached half of the total number of overnight stays in Tokyo and is expected to outnumber domestic guests soon for the first time.
• International arrivals reached 14.6 million as of May 2024, achieving a record high. The top five source markets were Korea, China, Taiwan, USA and Hong Kong, with all, except for China, having already surpassed 2019 levels, showing growing interest.

Headwinds impact hotel openings with no new hotels in H1 2024

• There were no openings of new international brand hotels in Q2 2024.
• No openings of upscale or luxury hotels are planned for 2024. However, from 2025 onwards, some luxury hotels, such as JW Marriott, Fairmont, Waldorf Astoria are scheduled to open.

Continued record high performance

• Tokyo registered a continued increase in trading performance in all hotel segments in Q2. The rising number of international tourists has led to a significant improvement in ADR.
• In the luxury and upper upscale hotel segments, ADR as well as RevPAR are continuing to achieve record highs every quarter, although occupancy has not fully recovered to 2019 levels yet.

Outlook: Strong fundamentals despite some concerns

• The return of Chinese visitors is accelerating, pushing up the number of international arrivals. Along with the increase in international visitors, occupancy in Tokyo hotels is anticipated to recover to 2019 levels, and ADR to achieve new highs.
• On the other hand, the ongoing conflicts in various parts of the world and changes in exchange rate trends may affect the number of international visitors to Japan.