Jim Ivanoff | email@example.com
The explosion of inbound tourism has been one of the great economic stories in Japan for the past few years. That phenomenal growth had resurrected many Japanese resorts, with major foreign investors just starting to launch new high-quality properties that would generate a greater level of recognition amongst the world’s well-heeled travelers. Unfortunately, COVID-19 crashed the party. With the sudden ban on international travel, the Japanese tourism industry has been hit hard and the postponement of the Olympics has dashed the hopes for a record summer. However, despite the short-term pain, there is optimism for these resorts for the summer and beyond.
Many investors and stakeholders are of course worried about the current situation. As a result, one of the major foreign developers organized a webinar to answer these questions and I was able to take part. This particular developer has been active in Japan for a long-time and could speak with authority on the subject, having gone through the severe downturns after the 2008 financial crisis as well as the 2011 nuclear disaster in Fukushima. Both times, interest in Japanese resort properties plummeted overnight and both times the developer cut their operations down to the bone as a defensive strategy. However, each time that left them unprepared to benefit from the following rebounds, so this time they are continuing full steam ahead with their projects. Their optimism is driven by the fact that this time, inquiries have not stopped and their projects for 2020 are already fully booked.
One of the unexpected outcomes of the corona virus situation has been that wealthy Japanese have rushed back to resort properties, as the major urban centres are seen as risky. Over the past few weeks, Nagano resort areas have been packed by both existing resort homeowners and people renting cabins for long terms. It the past, such properties were just retreats from Tokyo’s summer heat, but now they are being rediscovered as sanctuaries. Japan based expats typically flee the summer heat to their home countries, but this summer, they will not have that option because of international travel bans. Resort operators and developers are watching this shift in domestic demand and are looking to increase their promotions of summer season activities. Furano in Hokkaido is one of the few areas in Japan that has successfully marketed itself in this way and as a result, enjoys 80% occupancy rates over the summer. With all Japanese travelers likely to be limited to domestic options this year, resorts throughout the country will be trying to replicate Furano’s success. With a re-evaluation of what domestic resorts offer, a long-term mindset shift toward resort property ownership will be established.
In the end, whether it is domestic or foreign guests, the fundamental attractiveness of Japanese resorts has not changed. In fact, if these areas can better package and sell their summer options, they will emerge even stronger after COVID-19. Through our 2019/20 programs, BC Wood’s Japan office created extensive connections with developers in the main resort areas and we will be helping members connect to them in an effective new online format. For more information, please contact Jim Ivanoff ( firstname.lastname@example.org).