Decline in domestic lodging demand and inbound visitors to Japan

「In the hotel industry, domestic leisure and inbound demand generally remained firm, supported by the demand boost from the Osaka-Kansai Expo and a record-high 42.68 million foreign visitors to Japan in 2025. However, the decline in Chinese inbound visitors due to the Chinese government's request that its citizens refrain from overseas travel from November has continued, requiring close attention to future developments.」

「Inbound demand has increased steadily since June, following the easing of border control measures, reaching 106.3% of the level in the same period of 2019 during the most recent January-to-March period, above pre-pandemic levels. Meanwhile, according to the Japan Tourism Agency's Travel and Tourism Consumption Trend Survey, the number of domestic overnight travelers for tourism and recreation has generally recovered to pre-pandemic levels. Business use for travel and work, however, remained well below pre-pandemic levels at 81.0% of the 2019 level during the latest period for which figures were available, April to December, due to the impact of digitalization, including the spread of web conferencing.」

「In the hotel industry, business demand has not returned to pre-pandemic levels, while leisure demand has become more active and recovered to those levels. Inbound demand also increased excluding China, exceeding pre-pandemic levels at 2,734,000 international visitors to Japan in December 2023, or 108.2% of the level in the same month of 2019, according to the Japan National Tourism Organization.」

「In the hotel industry, leisure demand recovered to pre-COVID levels, although business demand remained slow to recover. In inbound demand, the Japan National Tourism Organization reported that the number of foreign visitors to Japan in September 2023 was 2.184 million, or 96.1% of the September 2019 level, bringing it close to pre-COVID levels even though visits by Chinese tourists had not fully recovered.」

「In the hotel industry, although the recovery in business demand has been slow, leisure demand has recovered to pre-pandemic levels, supported in part by tourism promotion programs such as the nationwide travel subsidy program. According to the Japan National Tourism Organization, the number of international visitors to Japan in June 2023 was 2,073,000, or 72% of the level in the same month of 2019, and inbound demand also remained on a recovery trend.」

「In the hotel industry, leisure demand recovered as opportunities to go out increased following the lifting of restrictions on activities, supported by tourism promotion programs including the nationwide travel support program. The number of foreign visitors to Japan also increased as border-control measures were eased, reaching 1.817 million in March 2023, or 65.8% of the March 2019 level, according to the Japan National Tourism Organization. Business demand, however, remained substantially below previous levels due to the spread of web conferencing and other factors.」

「In the hotel industry, domestic tourism and demand related to concerts and sporting events recovered following the launch of the nationwide travel support program in October and other developments. Inbound demand is also expected to recover, as it has become more active excluding China following the removal of the cap on arrivals. However, business demand remained substantially below previous levels due to the spread of web conferencing and other factors.」

「In addition to increased weekend accommodation demand due to the resumption of concerts and sporting events and regional tourism support, the leasing of entire properties as recuperation facilities for people infected with COVID-19 at 12 of the 43 business locations, or 13 locations through the end of July, also had a significant impact. The room occupancy rate for the cumulative second quarter was 62.9%, compared with 61.0% in the first quarter and 64.8% in the second quarter. While accommodation demand on days before holidays, when leisure demand is strong, is showing signs of recovery, recovery has been slow on weekdays, when business demand is the main driver, particularly in major cities such as Tokyo, Osaka, Nagoya and Fukuoka. Excluding locations leased in their entirety, the room occupancy rate for the cumulative second quarter was 46.4%, compared with 43.0% in the first quarter and 49.8% in the second quarter, and remained on the path to recovery.」

「The leasing of entire properties as recuperation facilities for people infected with COVID-19 at 13 of the 43 business locations also had a significant impact, and the room occupancy rate for the cumulative first quarter rose to 61.0%, compared with 21.9% in the same quarter of the previous year. While accommodation demand on days before holidays, when tourism demand is strong, is showing signs of recovery, recovery has lagged on weekdays, when business demand is the main driver, and in major cities such as Tokyo, Osaka, Nagoya and Fukuoka. Excluding locations leased in their entirety, the room occupancy rate was 43.0% and remained on the path to recovery.」

「In the hotel industry as well, tourism and leisure demand is expected to recover to pre-COVID levels, but business demand is not expected to fully return, and the recovery in inbound demand is expected to take considerable time.」

「The hotel industry was significantly affected by restrictions on travel resulting from states of emergency declared intermittently from April through September. Demand recovered from early autumn through year-end after the declarations were lifted, but the outlook remained uncertain amid concerns about another surge in infections following the emergence of new variants.」

「Although the Tokyo Olympic and Paralympic Games were held, their impact on the hotel industry was limited overall to lodging demand from people involved in the events. Overall, demand remained challenging without recovering, as people continued to refrain from travel and restrictions on dining remained in place.」

「The hotel industry was also required to discourage travel and restrict dining due to the declaration of states of emergency and the application of priority preventive measures, among other factors. As a result, consumer sentiment did not recover and challenging conditions continued.」

「However, in addition to the decline in demand during the COVID-19 pandemic, the temporary closure of multiple hotels under the state of emergency also had an impact, and the room occupancy rate for the fiscal year under review was 19.5% for the Group, down 51.3 percentage points from the previous fiscal year.」

「In the accommodation industry, individual demand temporarily showed signs of recovery due to government and local-government measures to stimulate tourism demand, but demand declined again as infections resurged.」

「To avoid infection risks and further losses, we temporarily closed a total of 13 hotels in stages from 17 April through the end of May. As a result, room occupancy for our group's cumulative second quarter was 14.1%, down 65.0 percentage points year on year.」

「Due to the impact of the spread of COVID-19, including requests to refrain from holding events and the declaration of a state of emergency, which led to broader restrictions on corporate and individual activities and a sharp decline in lodging and dining demand, room occupancy in the fourth quarter (January to March) was 47.5%, compared with 73.7% in the same period of the previous year, affecting net sales.」

「According to the Japan Tourism Agency's Lodging Travel Statistics Survey, the number of nights stayed by Japanese guests remained below the same month of the previous year for 7 consecutive months from June through December, excluding April and May, when there was a 10-day holiday period. In addition, according to the Japan National Tourism Organization (JNTO), the year-on-year growth rate for the number of foreign visitors to Japan turned negative in August. Although the number increased in September due to the Rugby World Cup, it turned negative again from October onward,」