THE OLYMPIC GAMES DID NO GOOD: A WAVE OF BANKRUPTCIES COVERED HOTELS OF JAPAN

Hoteliers hoped that the Olympics, which were postponed to 2021, would help to increase activity. However, the IOC's decision to hold the competitions without the physical presence of spectators has cast doubt on the hopes of hoteliers.

The closure of the Grand Palace Hotel, designed for 458 rooms, became a landmark.

The hotel has operated for 49 years, but the business has experienced a decline over the past decade. The control ‘shot’ for the hospitality industry was the pandemic, because of which the revenues from banquets, food and beverage sales and accommodation fell down by 70% in 2020. As a result, the Covid-19 pandemic turned out to be ‘the notorious straw that broke the back of a camel’, noted Japan Today.

The media outlet cites data from the Tokyo Shoko Research agency’s research, according to which 57.3% more hotels went bankrupt last year than in 2019. Out of the 188 hotels that filed for bankruptcy, 55 companies named losses caused by the pandemic as the cause of the financial collapse.

According to the Japan Travel Agency, the demand in Tokyo's luxury hotels (The Okura, Prince Park Tower) is still supported by IOC representatives who have come from abroad and are able to pay for their accommodation during the Olympics. The same cannot be said about inexpensive and middle class hotels, where the decline in demand has reached critical levels.

Experts note that after the holidays on July 22-25, orders for accommodation began to appear in hotels of Okinawa, Hokkaido and Kyushu.

Travelers, who are traditionally accustomed to going on holiday for a three-day O-Bon commemoration festival from 13 to 16 August, represent a significant part of the bookings.

More than half of the customers, according to sources at resort hotels in Okinawa, are from Tokyo and its suburbs. Experts have already called this process ‘Olympic evacuation’, as many are trying to leave the capital for fear of contracting COVID-19.