In a previous post I mentioned that repeat travelers are a key sector of the Tokyo tourism market and that they are influencing investment in real estate.
This is key for investors to consider because repeat travelers are a key part of the luxury market. Repeat visitors are more likely to expand beyond Tokyo, choose private accommodation, and spend on bigger ticket services.
Travel, real estate, art and fashion all share marketing and sales expertise through staff turnover, shared marketing platforms and complementary service offerings. As the luxury sector grows, so does the level of expertise at play in the market, and that will inturn lead to more high-net worth individuals being attracted to Japan.
The big institutions are investing in this cycle already; both domestic players such as Hiramatsu and Mori Trust and international brands, including Marriott and Conrad. Each are opening new hotels and resorts in locations including Karuizawa, Nara and Nagasaki.
The Meeting, Incentive, Convention and Exhibition (MICE) market is also a key player as it brings in significant business-class travel. Japan ranks number 3 in Asia, behind Singapore and Seoul, but it is targeting the top spot with investments being made to ensure it gets there.
Domestic demand is also growing. That large number of retirees that so worries Japanese demographers also forms a significant pool of people with time and money on their hands. They are being served by new luxury train journeys, retail experiences and more.
Other examples of new businesses springing up, can be seen all around. Guntu offers luxury cruises on a custom built liner, Setouchi Seaplanes is providing charted air tours of the Japanese islands, The Ryokan Collection is setting up unique stays in traditional luxury inns.
The more this continues, the more high-net worth individuals come to the country seeking accommodation with international tastes. That will see a rise in rates and occupancy, bringing Tokyo in-line with other top-destination cities like London or New York.
Editor’s Note: Robin is the Marketing Manager for Housing Japan. He is involved with property promotion and market analysis.