Japan IRs can drum Singapore-style MICE biz: Schroders
- on Oct 24, 2022
The proposed addition of an integrated resort (IR) with casino to the tourism markets of Osaka (pictured) and Nagasaki respectively in Japan could produce the sort of benefits in the business travel segment seen for Singapore via its two casino resorts, says a report by Schroders Capital.
“Comparisons with Marina Bay Sands and [Resorts World] Sentosa in Singapore suggest that the Japanese complexes should also attract high visitor numbers and MICE business,” said the paper by Andrew Haskins, head of strategy and investor advisory, real estate, Asia Pacific, for the financial institution.
He was referring to Singapore’s casino resort duopoly between Las Vegas Sands Corp and Genting Singapore Ltd, that is an element of Singapore’s meetings, incentives, conferences and exhibitions (MICE) sector.
“Just five out of Japan’s 47 prefectures made up the bulk of inbound tourist demand prior to Covid-19, including the three large urban prefectures of Tokyo, Osaka and Kyoto,” said the paper, citing data for 2019 from the Japan Tourism Agency and CBRE, a commercial real estate services and investment firm.
“For these three markets, foreign tourists accounted for 37 percent to 39 percent of total guest stays in the peak year of 2019,” added the Schroders Capital report.
It noted, citing the same data sources, that in 2019 about 80 percent of hotel stays and aggregate travel expenditure in Japan had come from domestic consumers.
The paper also said that in the Asia-Pacific “hospitality recovery race,” while Singapore “leads into the first corner,” Japan is “set to accelerate”.
“From a business perspective, Singapore’s position as the leading communications hub of Southeast Asia and strong government support turned the country into a top MICE destination prior to Covid-19,” indicated Mr Haskins’ paper.
It observed, citing data from a ‘Japan Hospitality’ report by real estate services firm Savills Plc, that as of August this year, aggregate occupancy in Japanese hotels had recovered from its Covid-19 lows to the 60 percent to 65 percent range.
Though Schroders Capital added: “Occupancy remains well below the 2019 level of over 80 percent.”
The institution noted the Japanese government had recently announced it would restore visa-waiver arrangements for vaccinated foreign tourists and remove a daily cap on visitors.
“Following this easing of entry rules, we expect that Asian inbound visitors will rebound sharply,” with the “continuing weakness” of the Japanese currency, the yen, being a factor. By September 22, the yen had reached a “24-year low… against the U.S. dollar,” said Schroders Capital.
While a full recovery of tourist arrival numbers to Japan was “unlikely until China eases Covid-19 travel restrictions,” the institution said the Japanese government had stated that “’a weak yen is most effective in attracting inbound tourism’”.
Japan was sticking to a target set in 2016 of hosting 60 million visitors annually by 2030, added Schroders Capital. The latter date is a mooted time frame for opening an Osaka casino resort, if such a scheme is approved.