It may be stating the obvious, but the coronavirus pandemic has threatened the very existence of the hospitality industry.
One of the latest casualties, well covered in the mass media, was the closing of the 458-room Hotel Grand Palace in Iidabashi, which ended 49 years of operation at 2 p.m. on June 30. Its business had undergone gradual decline for the past decade, but the pandemic was undoubtedly the proverbial straw that broke the camel's back, with revenues from accommodations, banquet, food and beverage, etc, during 2020 reportedly down by 70% from the previous year.
According to Tokyo Shoko Research, in 2020 188 hotels in Japan declared bankruptcy -- a 57.3% increase over 2019. In 55 of those cases, the cause for business failure was attributed specifically on the havoc wreaked by the coronavirus pandemic.
Shukan Jitsuwa (Aug 19-26) reports that while occupancy rates in Tokyo had managed to pick up somewhat during the April-May Golden Week period, with the capital's declaration of its fourth state of emergency and the decision by Olympics organizers not to admit spectators to events spurred a string of cancellations.
High-ranking IOC officials from abroad may be enjoying their accommodations at such top-rated hostelry as The Okura Tokyo, the Prince Park Tower Tokyo and other deluxe digs, demand for rooms at the so-called city hotels, and the business hotels occupying the class beneath them, has been considerably lower. According to data from the Japan Tourism Agency, occupancy rates at some establishments during the month of July had fallen below 20%.
Business-class hotels in parts of central Tokyo had anticipated a small pickup in demand from bookings by Olympics staff, who preferred to stay in town overnight rather than endure long commutes. Unfortunately, other problems seem to have surfaced.
"Every day we'd receive reservations requests for a dozen or so people, but only one or two actually showed up to check in," says an employee at business hotel. "So we wind up throwing away most of the ingredients of what would have been used to prepare the no-show breakfasts. It's a terrible waste of tax money."
At hotels in Okinawa, Kyushu, Hokkaido and Kansai, on the other hand, requests for reservations have been pouring in, particularly since the long holiday weekend of July 22-25.
"People from Tokyo and the surrounding prefectures of Kanagawa, Chiba and Saitama have accounted for more than half those requesting rooms," says a source at a resort hotel in Okinawa.
According to one of the domestic air carriers, reservations for those traveling during the traditional mid-August O-Bon holidays are also up, to some destinations by more than threefold over 2020.
What's the explanation?
"Even with, or perhaps because of, the rapid increase in coronavirus infections, 'evacuating Tokyo' has become something of a trend," a business analyst tells the magazine.
Perhaps, the writer concludes, the government and Dentsu were able to bring big money and political power to bear, and forcibly impose the Olympics on an unwilling public. But this summer the capital's hotel trade seems to be paying a painfully high price.© Japan Today