Because of the earthquake and the subsequent radiation concerns in Fukushima, Japan saw a 73% drop in inbound visitors from 12-30 March 2011 compared to the previous year. Together with the suspension of domestic travell, the Tokyo Full-service Hotel market saw a 38% drop in Revenue Per Available Room (“RevPAR”) in March 2011.
After 9/11 it took three years for New York City’s RevPAR to recover to its 2000 level, a year before the terrorist atrocity. If Japan can quickly address the radiation concerns, there is a good chance of a quicker recovery of inbound volume.
The valuation of a hotel asset will be affected mainly by a change in income projections, not by discount/capitalization rate movement. Balance-sheet lenders will take a wait-and-see attitude, therefore, there won’t be many forced hotel assets for sale in the next six months.
Click to download Japan’s hotel market after the quake
Click here for further information and resources from Jones Lang LaSalle Hotels website.
