Local and international hotel chains are seizing the opportunity to jump in as tourist numbers dipped in 2016 after an earthquake in nearby Kumamoto, but recovered to a record high in 2017.
Famed as Japan’s largest hot springs resort, the city of Beppu in western Japan has been stepping up efforts to attract the boom in foreign tourists as the number of Japanese visitors plateau.
Local and international hotel chains are seizing the opportunity to jump in as tourist numbers dipped in 2016 after an earthquake in nearby Kumamoto, but recovered to a record high in 2017.
South Koreans have been driving the 130% increase in foreigners staying in Beppu over the last five years, according to a report by Bloomberg.
InterContinental Hotel Group is among the businesses looking to capitalise on the inbound tourism boom. It has a joint venture with All Nippon Airways to open a new 89-room luxury hotel next year.
“Beppu is one of the world’s most famous hot springs resorts, but it didn’t have a luxury hotel of international fame,” said Hans Heijligers, CEO of ING ANA Hotels Group Japan. “The wealthy Japanese market is very attractive, and inbound tourism is also booming.”
In the last five years, the significant increase in foreign tourist numbers has helped shrink Japan’s chronic deficits. This is amid five years of economic revitalisation efforts that have seen a boom in inbound tourism and produced mixed results in areas such as wage growth and inflation.
Hoshino Resorts, a luxury domestic hotel chain, is building a new hotel, while Oedo Onsen refurbished an older hotel and opened it in July last year.
The hotel boom is expected to increase the number of rooms in the city to 5,030 in 2019, from the current 4,400, according to the Beppu City Ryokan and Hotel Association. Demand for hotel rooms is expected to rise with five matches for next year’s Rugby World Cup being played in neighbouring Oita City.
The city’s largest hotel, the 647-key Suginoi Hotel and Resort, welcomes the new investment and competition.
"We can make money if they come and make it even more attractive," said Koichi Sasaki, general manager of Suginoi Hotel and Resort. The hotel has had an occupancy rate of 100% since 2014, and is renovating its conference space.