Sunday, September 15, 2024 Japan and China are emerging as top destinations for global hotel investments, driven by strong travel demand, economic optimism, and promising returns for investors. Hotels are emerging as a top choice for global investors as the appetite for travel remains strong despite ongoing economic challenges, analysts. Japan, in particular, is leading the pack, with both hoteliers and investors identifying the country of sakura, sushi, and sumo as the prime destination for hotel investments.
Key drivers behind this surge in hotel investments include the potential for higher returns, price corrections, distressed assets, and a lower cost of capital. Nearly 75% of surveyed investors expressed a strong interest in opportunistic and value-added hotel assets this year. According to Schaffer, two major factors are fueling this trend: “revenge travel,” as people seek to make up for missed vacations during the pandemic, and the younger generation’s preference for travel experiences over material ownership.
Kenneth Gaw, managing principal and co-founder of Hong Kong-based Gaw Capital, highlighted the flexibility hotels offer investors. During a panel at the International Hospitality Investment Forum, he noted that enhancements such as repositioning assets to appeal to new customer segments can be implemented with ease. Gaw Capital’s portfolio includes prestigious properties such as the Regent Hong Kong, Hyatt Regency Tokyo, and Four Seasons in Bora Bora.
Japan remains the top target for hotel investments, thanks to a surge in both local and international tourists, fueling the growth of its hospitality industry. As the world’s second-largest economy, Japan offers a unique combination of attractions – from skiing in Hokkaido to the beaches of Okinawa – alongside interest rates as low as 0.25%.
Tokyo has ambitious goals, aiming to attract 60 million visitors by 2030, with expectations that these tourists will contribute 15 trillion yen (US$106.6 billion) to the economy. In Osaka, Hilton recently opened the 308-room Canopy by Hilton Osaka Umeda, according to Clarence Tan, senior vice president of development for Hilton in Asia-Pacific.
Meanwhile, despite economic slowdowns and a lingering property crisis, China remains on the radar of major players like Radisson Hotels. The Mandarin Oriental Hotel Group also expanded its presence in Beijing this month with the opening of the Mandarin Oriental Qianmen, marking its second hotel in the capital..
