Market share of hotel

Foreign visitors supprt hotels instead of domestic travelers!

Hotels in Japan divided into three classes, luxury hotel for tourist, economy hotel for white-collar worker called business hotel and their intermediate hotel called city hotel in Japan. Hotels in Japan also divided into four types by management agency, long-established hotel, developer's hotel, railway company's hotel and foreign hotel. In addition, there is a traditional Japanese inn called ryokan.

The number of hotels in Japan is about ten thousand according to the report of Ministry of Health, Labour and Welfare in 2017. This number increased about 10% from ten years ago. The market size of hotels in Japan is about 1.7 trillion yen(about 17 billion dollars). It is increasing slightly year by year because of foreign visitors. The average guestroom occupancy rate in Tokyo and Osaka continues to be over 80%, and the average spend per customer is also increasing. Foreign hotels plan to increase the number of its hotels in Japan. For example, Hyatt Hotels and Resorts plans to double the number of its hotels in Japan by 2020.

Japanese government published the number of foreign tourist visiting Japan is about 24 million in 2016. It targets to increase this number to 40 million by 2020, and targets 60 million by 2030. However, this number's increasing has been slightly slowing in recent years. Whether Japan can pull people in emerging nations of Asia or not is the key to increase the number of foreign visitors in the medium to long term.

In addition, Japan leaves room for increasing the number of foreign visitors. This number of Japan ranks fifth in Asia ranking and 15th in the world ranking. This number of Thailand and Malaysia are rank higher than Japan. There are some reasons for that, storng yen, relations with China and more. Especailly, Japanese government lagged behind other nations in the tourism policy. Japanese government turns tourism into a growth sector now.

On the other hand, about 300 million Japanese go on a domestic trip for a year. This number reamins stable from 2010 except 2014, the consumption tax increase hit the tourism hard in 2014. This number reached a historical high in 2016 since because of not only economic recovery but also consecutive holidays. However, this number will decrease slightly because of aging society. The speed of decreasing domestic travelers is faster than the speed of population decreasing since travel frequency of the aged is lower than it of the young in Japan. It is said this number will be under 300 million around 2025. Foreign visitors supprt this number instead of domestic travelers.

About the hotel market in Japan, Prince Hotels Inc. has the top share of this market. It is a susidairy of Seibu Holdings which owns Seibu Railway and Seibu Bus except it. Seibu group is based in northwestern Tokyo and Saitama prefecture. Tokyu Hotels Co. has the second share of this market. It is a subsidiary of Tokyu Corporation which is a railway company. Tokyu is based in southwestern Tokyo and Kanagawa prefecture.

Hotel Okura has the third share of this market. It is one of the three major high-class hotels in Japan, Hotel Okura, Imperial Hotel and Hotel New Otani. It is most proactive in expanding overseas among them. There are some foreign hotels in Japan, Hyatt Hotels and Resorts, Hilton Hotels & Resorts, Four Seasons Hotels and Resorts and InterContinental Hotels Group.

By the way, it is said that a weak point of Japanese hotel is the number of high-class hotel. There are only three hotels in Japan are five-star hotels according to the Forbes Travel Guide in 2017. Palace Hotel Tokyo is only a five-star hotel which is run by Japanese company among them. In spite of including four-star hotels, there are only four hotels which are run by Japanese company. Hotel Chinzanso Tokyo, Imperial Hotel and Tokyo Station Hotel are four-star hotel in Japan. Of course, there are many four-star hotels which are run by foreign company, Conrad Tokyo, Grand Hyatt Tokyo, Ritz-Carlton Tokyo and more. A tourism indutry official focus on whether the number of high-class hotels will increase or not.

Seibu Holdings, Tokyu Co. and Imperial Hotel are listed on the Tokyo Stock Exchange. Foreign investors can invest in Tokyu Co. on NYSE by ADR(American Depositary Receipt). In addition, they can do them through many ETFs, MAXIS Nikkei 225 ETF(NKY), iShares MSCI Japan ETF(EWJ), Wisdomtree Japan Hedged ETF(DXJ) and more.