Japan Added Thousands of Hotel Rooms Ahead of the Olympics: Now What?

Smart hotel developers wouldn’t hinge the financial success of a project on a multi-week event, but Japan’s decision to not allow international spectators to this summer’s rescheduled 2020 Summer Olympics takes a major bite out of anticipated hotel demand at newly opened hotels. Developers were on a hotel-building whirlwind in the years leading up to the Olympics. Since Tokyo was first announced as the 2020 Summer Olympics host city in 2013, Tokyo added 250 hotels, or a little more than 53,000 rooms, to its hotel supply, according to Lodging Econometrics. Inbound international tourism was growing about 25 percent annually in the years leading up to the 2020 Summer Olympics, according to an International Monetary Fund working paper. International tourism as a portion of Japan's overall tourism sector grew from just shy of 5 percent in 2009 to a little more than 17 percent in 2018. Hotel construction in Tokyo hit its peak at the beginning of 2018 when there were 73 projects, or