Tokyo Hotels begin to recover from March 11th disaster
The haunting memories of the wreckage left behind along the northeastern coast of Japan from the triple disaster seven months ago continues to leave an impact on the Japanese community.
The lingering images of severe destruction and the grim broadcast of the massive death toll continue to saturate local and international news, causing even the most seasoned of travelers to hesitate from going into Tokyo. With no clear indication of a solid resolution following the alarming updates of power shortages and radioactive fallout that’s been reoccurring in the media, it’s not surprising to see such a considerable cut in the number of flights going into Tokyo.
This has caused Japan’s tourism and hospitality industry – which has been experiencing substantial growth just a year earlier – to take a major blow. Records from the Japan Tourism Marketing Co. show a 34% rise on the number of inbound travelers in September of 2010. That estimates to approximately 717,000 international visitors to Japan during that month.
Furthermore, statistics continued to show a steady rate of travelers from overseas even after a few months later, with roughly 715,000 visitors in January and 680,000 visitors in February. However immediately following the March 11th disaster, that number plummeted to about half. International travelers to Japan fell to about 50.3% in March from February, and the rate even fell to 62.5% in April – barely reaching about 295,000 international visitors.
Tokyo hotels were among the tourism and hospitality services that declined when the industry became bombarded with the chaos ensuing the disaster. Numerous cancellations from international tourists caused hotels to empty and in some cases even shut down despite its efforts to remain intact.
According to STR Global, hotel occupancy throughout Japan fell 21% in March and 28% in April compared to the same months in 2010. Occupancy rate from the hotels nearest to the earthquake’s epicenter were hit particularly hard, with only about 37% of the rooms occupied. This led to a sharp decline in the average return with revenue per available room for Tokyo Hotels falling by 36% and 52% in March and April, respectively, compared to a year earlier.
An article at USA Today notes Starwood’s late-April conference call where Starwood CFO Vasant Prabhu, said “travel into Japan is down significantly, resulting in large occupancy and rate shortfalls at all hotels…with a nation in mourning, events and spending on events like weddings is down very sharply and unlikely to recover soon, hurting food and beverage, which is over 50% of Japanese hotel revenues.”
Fortunately, seven months later and updates on the hotel industry appear to be more positive. An article in Japan Today mentions new figures obtained by the “Nikkei Shimbun” that shows a slow recovering occupancy rate at 19 high-end Tokyo hotels in August. The rate has even reached 70% for the first time since the disaster, albeit still quite low from just a year previously. The numbers of inbound travelers have also steadily increased.
While Tokyo hotels are indeed slowly recovering, much of the recovery seems to stem from increased domestic tourism rather than from international travelers. According to Business Travel News, an official from Starwood Hotels and Resorts Worldwide said that despite low occupancy in Tokyo, hotels in the southern part of Japan have high occupancy as people relocate southward.
Needless to say, it’s disputable to guess at the reasons behind the recovering Tokyo hotels. Whether it’s on the account of domestic Japanese travelers who just want to get as far away from the shaky situation at the damaged nuclear plant, or whether it’s simply because of a steadying international travel as the impact from the disaster lessens, the unstable situation of radiation contamination and a slow global economy seem to point to a rather viable explanation.