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March hotel occupancy rate in Japan lowest on record: survey


JAPAN'S hotel occupancy rate tumbled to 30.5 per cent in March, according to preliminary data from global hotel research firm STR, the worst monthly average in the latter's records as the coronavirus pandemic slashed numbers of people travelling.

The survey provides the first snapshot of the impact of the virus on Japan's hotel industry.

The March occupancy rate represents a huge drop from 84.7 per cent in the same month a year ago, and is the lowest since STR started the survey for Japan in 1996.

Japanese hotel developers and operators had been counting on a surge in demand for accommodation in the run-up to the Tokyo 2020 Olympic Games, ramping up construction projects. The number of hotel rooms in Tokyo increased by 31.3 per cent in six years up to 2019, according to STR.

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But the spread of the coronavirus has derailed business hopes, while the Games have been postponed for a year.

"The industry is facing a bigger crisis than it had after the Lehman crisis and the 2011 (earthquake, tsunami and nuclear) disaster which hit northern Japan," said Shiori Sakurai, business development manager for STR in Tokyo.

Growth in Japan's hotel room occupancy rates had already tailed off amid the growth in the number of rooms available, Ms Sakurai said. The nationwide annual occupancy rate eased to 82.4 per cent in 2019 from 83.8 per cent a year earlier.

STR had predicted an average revenue per available room, or RevPAR, a key financial indicator for the industry, to be at 19,268 yen (S$252.6) in July, but that was revised down to 13,898 yen after the Games were delayed.

The research firm surveyed 1,087 hotels nationwide, varying from luxury to limited service hotels. REUTERS

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