MARKET OVERVIEW
70
ANNUAL REPORT 2015
FRASERS HOSPITALITY TRUST
(12.2%), South Korea (11.9%), and
the U.S. (4.8%). The surge of foreign
visitors is backed mostly by the
increase in the number of tourists
from Asia, as the top four countries
account for 74.9% of the total
inbound tourists in Hyogo.
Famous for its unique culture and
exotic streetscape, Kobe has gained
high recognition and has maintained
a competitive position in the nation.
Because of its long history of trading
with the West since the end of the
closed-door policy in 1853, Kobe is
regarded as a modern city that fuses
together Western and Japanese
cultures. Even now, many foreigners
reside in Kobe. The city is attracting
more domestic and inbound visitors
with its international atmosphere
and varied attractions including Kobe
Port and Chinatown. Kobe’s skyline
and views of the city’s landscape
by night are also praised as one of
Japan’s three greatest night views.
Furthermore, Kobe is one of Japan’s
top destinations for MICE. Plenty of
attractions and convenient access
through Kansai Airport, Kobe Airport
and Kobe Port, provide Kobe with
an advantage to host participants
from all over the world. In 2014,
Kobe was ranked as the seventh city
in Japan in terms of the number
of international MICE organised
(15 meetings in total) according
to the International Congress and
Convention Association (ICCA).
Hospitality Industry Performance
Both Kobe and Japan’s hotel
markets have been performing
well due to a sharp increase
in the number of international
tourists. According to STR, 1H 2015
occupancy for Kobe was 82.7%, an
impressive 9% increase on 1H 2014.
For the full year of 2014, occupancy
was 80.3% in 2014, up by 3.6% from
2013.
ADR in 1H 2015 was ¥$12,363
(USD103.13), an impressive 10%
increase on 1 H 2014. For the
full year of 2014, ADR achieved a
2.2% increase, reaching ¥$11,929
(USD99.29).
With these robust increases in both
occupancy and ADR, RevPAR in 1H
2015 was ¥$10,224 (USD 85.29).
For the full year of 2014, RevPAR
improved to ¥$9,050 (USD75.33),
5.9% higher than 2013.
Mainly driven by the growing room
business, most hotels have seen
improvements in both revenue
and profits. However, with the
shrinking population and the young
generation’s budget-conscious
mood, the wedding business is
struggling to expand.
In 2014, the number of marriages
in Kobe was 7,767, a 2.9% decrease
from the previous year according
to the Ministry of Health, Labour
and Welfare (MHLW). Compared
to 2000, the number of marriages
decreased by 18%, and the number
is expected to keep declining. The
wedding business is a shrinking
industry all over Japan, and Kobe is
not an exception. The competition
among hotels and wedding houses
is becoming fierce, more unique and
value-added weddings are necessary
in order to stay in the market.
Existing Supply
The international tourism boom
has been positive for the most
part; however, domestic business
travellers have found difficulties
booking rooms for business trips.
There are occasions, especially in
the Kansai Area, where the ADR
for budget hotels in Osaka and
Kyoto are too high for business
travellers who usually have
limited company budgets for their
accommodation. Even for travellers
with a generous budget, there are
room shortages in some cases due
to block reservations for inbound
group tourists. In some cities,
hotel demand is growing much
faster than supply, and more hotel
developments are needed to meet
the influx of tourists.
According to MHLW, there are 128
hotels and 12,655 rooms in Kobe
as of 2013. The number of hotels in
Kobe has been steadily increasing
over the past 13 years. Since the year
2000, 22 hotels and 2,222 rooms
were added to the inventory. The
number of hotel rooms peaked in
2008 at 13,077 rooms; however,
after the financial crisis affected
Japan, the number of rooms
dropped to 12,307 rooms in 2009.
Since then, the number of rooms
has been gradually increasing, and
the trend is expected to continue
as Kobe receives more recognition
among international tourists.
Hospitality Market Outlook
Kobe has set a goal of welcoming
1 million international tourists per
year by the end of 2015. In order
to achieve this goal and attract
more inbound travellers, the city
has started providing multi-lingual
guidance and free wi-fi services
throughout the city. In June
2013, Kobe was selected as the
Global MICE Strategic City by the
government as part of an initiative
to strengthen Japan’s promotional
power to cope with the intensifying
competition of MICE promotions on
an international scale.
Though the growth rates of the
tourism and hotel markets are not
as robust as Osaka and Kyoto, Kobe
is gaining more popularity as one of
the major destinations in Kansai. The
growth is expected to accelerate
as inbound tourists start to explore
beyond the Golden Route, the most
common route for tourists passing
through the six cities from Tokyo to
Osaka.
