LOOK AHEAD 2018: Olympics buoy Japan’s hot hospitality market

Trinity Investments chief executive Sean Hehir predicts the uptick in visitors to Japan ahead of the 2020 Olympics will boost the hotel landscape long-term.

Sean Hehir is one of a group he calls “Japan enthusiasts,” a term he uses to categorize the businesspeople who come to the country for work, perhaps a few days in Tokyo, then return for more work and eventually bring their families to explore different parts of the country – boosting the hospitality market with each trip.

Hehir, chief executive of Trinity Investments, has invested in the country’s real estate for 20 years, and also has taken his family to both cities and ski destinations. Ahead of the 2020 Tokyo Olympics, the investor predicts that a core contingent of the expected tourist influx will likewise become repeat offenders, returning to Japan in the years to come for what they could not see on one visit.

The Olympics themselves are expected to boost the Japanese hospitality market, with 40 million visitors predicted around the Winter Games. That tourism boost can be temporary, as seen in Rio de Janiero, but Hehir predicts a longer-term trend for sustained tourism.

“Unlike most markets where you look at a post-Olympic hangover in terms of tourism visits, Japan has become a destination,” he said. “I don’t see the Olympics as being a bookend in this demand growth.”

Nikko Style rendering

When the Olympics decision was announced, advisory firm JLL predicted that Osaka, Kyoto and Kanazawa will be the biggest beneficiaries of the tourism boom outside of Tokyo.

“Japan will be further elevated into the international spotlight post the Olympics,” the firm said. “London continues to see solid growth in its tourism industry as a direct result of the Games and Japan too will receive its fair share of international visitors after 2020.”

The tourism market has been on a long upswing, with 24 million overseas tourists in 2016, up 22 percent from 2015, the fifth consecutive year of growth over 20 percent annually, according to advisory firm Savills. With this visitor uptick, and more expected ahead of and during the Olympics, hospitality demand is strong across different segments of the industry, Hehir says. He sees specific opportunities in “true select-service” hotels, which the firm is investing in through a joint venture with a Japanese hospitality company.

“At the end of the day, you go to Japan to experience the Japanese culture and a large part of that is the hospitality. When you stay at the Hotel Okura or other hotels, that parlays into the ambience, the cuisine and everything else.”