TOKYO hoteliers have reason to cheer according to a new study, which found that Olympic host cities enjoy long-term positive effects on RevPAR.
According to Tokyo 2020: The Olympic Games Effect by Jones Lang LaSalle’s (JLL) Hotels & Hospitality Group and STR Global, RevPar will receive a boost beginning the year of announcement and lasting over the next seven years.
The Japanese government estimates that some 8.5 million visitors will travel to Tokyo for the 2020 Summer Olympic Games.
Although an increase in the number of hotel rooms will be likely in the run-up to the event, the International Olympic Committee (IOC) assessment has determined that Tokyo has enough room capacity to accommodate tourists to the Japanese capital. Thus “only a moderate addition to supply is likely and will limit a substantial post-Games decline in RevPAR”, said the report.
The IOC states that there are 140,000 existing international brand hotel rooms within a 50km radius of Tokyo, as well as 9,500 rooms in ryokans. Tokyo’s accommodation plan offers a total guaranteed room inventory of more than 46,000 rooms in 363 hotels that met IOC requirements, of which 37,000 are within a 10km radius of the Olympic Village site.
In terms of annual average room occupancy, STR Global noted a decline during the year of the Games for previous host cities. JLL and STR Global expect a similar scenario for Tokyo.
However, this will be moderated by a rebound in occupancies in the period immediately following the sporting event, based on the presumption that travellers will postpone their non-urgent business or leisure trips to after.
Both JLL and STR Global also predict a significant jump in average daily rates in the month of the Games.
STR Global statistics for 33,739 rooms in Tokyo report positive figures for January to August 2013. Occupancies rose 4.5 per cent to 85 per cent, while average daily rate jumped five per cent to 15,046 yen (US$152). RevPAR has soared 10 per cent higher to 12,783 over the same period.
