The growth in the Japanese luxury hotel market is set to continue for the foreseeable future, a market analyst says.
A report from Deloitte Japan partner Ryuji Sawada says the Japanese hospitality market and increase in luxury hotel rooms in recent years is feeding demand, rather than satiating it.
“Some hotels are proving so popular that reservations must be made months ahead, and some have to restrict access to facilities such as restaurants to hotel guests only,” he says.
Sawada says while the government’s ‘Visit Japan’ campaign is attracting thousands of tourists to the country each month, domestic demand is also high, driven by the retirement of the ‘baby boomer’ generation and the rise of the ‘nouveau riche’.
Although the market is performing strongly, with several high-profile chains boosting room numbers and the recent acquisition of IHG ANA’s 13 hotels by Morgan Stanley for $2bn, the sector is still experiencing some teething problems, including issues with infrastructure.
“[The sector’s] rapid expansion raises issues over staffing, as the demand for qualified people to work in this class of hotel – where professional service is rated very highly – is already outstripping supply,” he says.
Sawada says it is too early to predict the long-term future of the market, but it should be clearer by 2009.
“As many of these niche hotels are still regarded as a novelty by Japanese consumers, who tend to favour the new, it’s too early to predict the longer-term impact,” he added.
“By the time the Shangri-La Hotel is due to open in March 2009, the competitive landscape will be easier to assess.”
By Elizabeth Clifford-Marsh