Summary for Japan’s hospitality property industry.

“Japan continues to see robust growth in inbound tourism. This growth should maintain its forward momentum and fuel a strong performance in the hospitality sector this year, despite global economic uncertainty. Tourism growth in Osaka has been especially notable.”

• Almost 20 million international tourists visited Japan in 2015, a record number. This is a 47% increase compared with last year.
• The occupancy rate of hotels in Japan stood at 83.7% during 2015, and has hovered above 80% since 2013. Average daily rate (ADR) and revenue per available room (RevPAR) have recovered significantly. However, there remains significant potential to boost revenues, especially in US$ terms.
• In terms of the hotel supply pipeline, developers planned to add an additional 45,000 rooms nationwide as of December 2015, more than at any point in the past decade.
• Hotel development is expanding outside Tokyo to capture more inbound tourists visiting regional destinations. Well-regarded international brands are also getting involved.
• Transaction volumes remain high, and J-REITs and their sponsors remain the major players in the market. Cap rates have been compressing because of the high demand.
• Savills expects the number of international arrivals to continue to increase considering the range of attractions available, in particular for Asian tourists, although a stronger yen and economic uncertainty in China may moderate the rate of growth.

View the full report here.

For more on Japan:

Japanese Investment Report 2H 2015​

Savills Japan 2015 Review and 2016 Prospects​

Foreign Investors Approach to Real Estate Investing Under $50K