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Hotel industry in Japan - statistics & facts

Prior to the advent of the COVID-19 pandemic the hotel industry in Japan was flourishing. The industry’s performance is tightly coupled with tourism KPIs. Various KPI values, such as the total number of overnight stays, or the gross domestic tourism expenditure, showed that domestic tourism remained stable, while a growing influx of inbound visitors were recorded which led to a rising number of overnight stays by international visitors, increasingly contributing to revenues earned in the hotel industry. The rosy outlook of the industry changed however in an instant, as COVID-19 put a stop to international travel, and seriously impacted domestic travel. In terms of the business landscape, the majority of players in the industry are of domestic origin, and most revenue is generated by mid and upper-midscale hotels, while there is a relative scarcity of luxury hotels. The industry’s main source of revenue constitutes lodging expenses of domestic travelers, followed by the hosting of events such as weddings and banquets. The simplest industry structure differentiates between Western-style hotels, Japanese-style hotels (ryokan), and simple lodging facilities (such as hostels or capsule hotels). A more detailed and precise breakdown distinguishes between business hotels, city hotels, resort hotels, ryokan, and simple lodging facilities.


In terms of workforce demographics, figures relating to employment in the hospitality industry show that the larger part of employees are women. This is common in the service industry in Japan. The industry’s largest employee age group are people aged 65 and older, reflecting Japan’s contemporary demographic situation in the workforce. Employees in the hospitality industry face a relatively harsh work environment. Compared to average overall industry-wide figures in other parts of the economy, employees in the hospitality industry work longer regular hours and earn significantly less money. Reflecting employment characteristics in Japan, men clocked slightly longer hours at the workplace than women and also had longer (uninterrupted) employment histories in the industry. Women receive significantly less pay at the end of the month, as well as year-end premiums, despite working only slightly less than men.

Hospitality industry under COVID-19

The hotel industry was among the hardest-hit industries in the COVID-19 pandemic, as domestic tourism was (for the most part) discouraged and inbound tourism was entirely sidelined by the Japanese government. Average annual occupancy rates during the pandemic plummeted, especially for facilities focused on providing leisure experiences. Business hotels proved to be the most resilient type of lodging facility. In an attempt to support businesses in the industry, as well as touristic areas that rely on tourism revenue, the government implemented a tourism reinvigoration scheme called “Go to Travel”. Under it, private travelers received state subsidies worth half of their accommodation and travel expenses. The program, which started in the mid-summer of 2020, had success in promoting domestic travel but was suspended indefinitely due to resurging COVID-19 cases. The hospitality industry continues to be in a difficult situation, as the COVID-19 pandemic is not yet under control, domestic travel has not yet returned to pre-pandemic levels, and inbound tourism is almost non-existent.


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