Market Size of Hospitality Industry in Japan
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 24.79 Billion |
| Market Size (2029) | USD 26.29 Billion |
| CAGR (2024 - 2029) | 1.18 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Japan Hospitality Market Analysis
The Hospitality Industry in Japan Market size is estimated at USD 24.79 billion in 2024, and is expected to reach USD 26.29 billion by 2029, growing at a CAGR of 1.18% during the forecast period (2024-2029).
In Japan, hotel performance remained weak for most of 2021. However, slightly recovering occupancy rates from the previous half-year are almost at the levels seen in 2H/2020, even without the help of the 'Go To' Travel campaign. Moreover, hotel revenues have also improved slightly. In 2H/2021, the average daily rates (ADR) index increased by 0.8 points half-year-on-half-year (HoH), and the revenue per available room (RevPAR) index increased accordingly by 3.8 points HoH.
With the COVID-19 pandemic drastically decreasing revenue from accommodation and other key revenue streams, such as corporate events and banqueting, the hospitality industry in Japan has been struggling over the past two years. 2020 saw a rapid increase in the number of bankruptcies, exceeding 120 cases, more than half of which resulted from the pandemic. While the number of bankruptcies in 2021 has fallen, more than two-thirds were due to the pandemic, showing its lingering effects.
Budget hotels, in particular, have been hit harder by the pandemic due to the large supply in the market. The small room sizes of such hotels appear to be an issue for both customers and operators, especially after the pandemic.
Overseas investors have also been looking at the Japanese hospitality industry. For instance, Baring Private Equity Asia acquired The B Osaka Midosuji, a large hotel in Chuo ward, Osaka, in a transaction estimated at over JPY 10 billion (USD 74 million). Overall, while 2021 has seen large transactions in the hotel sector, transaction volumes have been relatively low considering the pandemic.
