Tokyo performance growth amplified by Rugby World Cup knockout stages
In the first part of our Rugby World Cup 2019 series, we discussed the group stage’s positive influence on Japan hotel market performance. During the tournament’s knockout phase, the influence grew and showed a direct correlation between the magnitude of the fixture and average daily rate (ADR).
Quarter and semi-final fixtures took place across Saturdays and Sundays, and hotel performance data revealed interesting trends for each of the days. Saturday occupancy growth was minimal as a result of a high comparison basis, enabling hoteliers to push ADR. Sunday, meanwhile, came from a much lower base and typically reported significant growth in both metrics.
*October performance data based on day to day comparison, JPY, unless stated otherwise.
Quarterfinals: 19-20 October
When Oita hosted England’s victory over Australia on Saturday, 19 October, Kyushu (the island where Oita is located) hotels produced just a 2.6% increase in occupancy to an absolute level of 98.1% and reported ADR of JPY16,365.88. For Sunday, 20 October’s fixture between Wales and France, however, hotel occupancy reached 87.1% but a year-over-year increase of 25.6%.
A difference in growth in revenue per available room (RevPAR) highlights the boost provided to Sunday night performance, as 20 October showed an increase of 80.9%—much higher than the 12.7% produced the previous day.
Tokyo performance data demonstrates similar trends. When New Zealand defeated Ireland on 19 October, occupancy actually fell 1.9% despite reaching a level of 92.5%. Contrarily on Sunday, 20 October, occupancy rose 3.7% to 82.7% when the tournament hosts were defeated by eventual champion, South Africa. Notable increases occurred in ADR, which rose by double digits on both days.
Tokyo West/Shibuya-Shinjuku, an STR-defined submarket in close proximity of Tokyo Stadium, reported absolute occupancy of 96.9% and 89.6% on 19 and 20 October, respectively. This represented just a marginal increase for Saturday’s fixture but almost 10% growth on the Sunday—the latter day achieved 70.9% RevPAR growth as a result of a 56.0% ADR increase.
Semifinals: 26-27 October
With Tokyo just over 30 minutes from semi-final host Yokohama by car and train, the capital’s performance data can be used as an indication of the impact on hotels. When England defeated New Zealand on Saturday, 26 October, ADR rose above JPY38,000—a roughly JPY5,000 increase on the market’s quarter-final levels. As occupancy reached 96.7%, Tokyo reported RevPAR growth of 27.9%.
The trend for Sunday growth continued into the semi-final stage, with occupancy and ADR rising 14.6% and 33.5%, respectively, as Wales was defeated by South Africa. As a result, RevPAR increased 53.0%.
Final and third-place play-off: 1-2 November
With the third-place playoff between New Zealand and Wales played in Tokyo Stadium, and Yokohama hosting the final, Tokyo performance can once again offer insight into the influence on hotel performance. However, it is important to note that these two fixtures took place on Friday and Saturday.
STR’s preliminary data, while not complete performance figures, offers an indication that the trend continued for the two remaining fixtures. However, rate growth was understandably more pronounced on the day of the final. ADR reached JPY49,762.21 on 2 November, more than JPY17,000.00 higher than the quarter-final level. Occupancy, meanwhile, exceeded 94.0% on both days and reached 97.5% on 2 November.
Looking ahead to the Tokyo 2020 Olympics
Further sporting mega-events are coming to Japan, as Tokyo hosts the 2020 Olympic and Paralympic Games between July and September. While demand was spread across the nation during the Rugby tournament, it will be more concentrated to Tokyo during the Games. As previous World Cup data demonstrates, hotels are more likely to benefit from ADR increases, and this will likely be true to Tokyo with an already high occupancy base.
The Olympic effect is predicted to boost overall Japan arrival numbers in 2020, with international visitors rising to just below 35 million, which would represent a 7.7% increase (source: Tourism Economics).