Japan gears up for a rugby uplift

 —  Article by JLL Staff Reporter
Japan play England at rugby union
Image credit: Shutterstock

Japan’s hotel sector is already prepping for the 2019 Rugby World Cup (RWC), which in addition to drawing thousands of visitors to the country’s biggest cities is expected to pull groups of rugby-mad spectators further off the beaten path.

Cities like Tokyo, Kyoto and Osaka have for years been big draws for tourists, especially as visitor numbers from China have shot higher in recent years.

But the rugby tournament will take place in 12 cities around Japan between September and November, tapping into a wider trend that has seen greater numbers of visitors who have already been to well-trodden urban centers head to provincial cities.

“There will be a magnet effect for hosting cities and we expect this will encourage people to explore Japan more widely,” Tom Sawayanagi, head of Hotels & Hospitality Group at JLL Japan. He adds that the spread of tourism to a wider range of cities is expected to lead to more hotel development.

Less-known cities hosting the tournament include Toyota, a city of about 425,000 people around four-hours away from Tokyo, and Kumagaya, a smaller city 90-minute drive from the capita on the south western island of Kyushu, home to one of Japan’s most impressive castles.

Overall, Japan is expected to welcome 400,000 extra visitors for the tournament, bringing in an extra ¥216.6 billion (US$1.92 billion] to the economy, according to tournament director Alan Gilpin.

Expanding tourism sector set for boost

Even before of the tournament, Japan’s hospitality sector has been expanding for years amid a tourism boom.

“The inbound tourism boom started in 2013, when the new government of Shinzo Abe weakened the yen and deregulated visa requirements for Asian visitors,” Sawayanagi says.

At first, the tourists flocked from China, with most visitors being first-timers that signed up to a group tour. “Now half the tourists are return visitors who have seen Tokyo, Kyoto and Osaka and are looking for somewhere different,” Sawayanagi says. “More are independent travellers and often go to more rural areas.”

The city of Sapporo – where England will play a Rugby World Cup match against Tonga – saw revenue per available room rise 8.6 percent to July this year, while Fukuoka, also a RWC 2019 host city, saw RevPAR rise 5.2 percent in the same period, according to JLL.

The hotel effect

Part of the Rugby World Cup’s attraction in 2019 is that the tournament is widely expected to be among the most competitive in rugby history. While the crown has typically been won by a handful of competing nations, next year six teams are considered serious contenders.

International tourists pouring into the country to see their team play for the title are expected to reinforce the strong demand from hospitality real estate investors as of late.

Ko Iwahori, deputy general manager at Mitsubishi Estate Investment Management, made Japan hospitality his top property pick for 2019. “There are untapped markets all over Japan, with hot springs, landscape and good local food,” Iwahori said while speaking at a recent Urban Land Institute conference in Shanghai.

The increased numbers will be a valuable boost for Japan’s tourism industry. Overall visitor numbers in the year to September hit 23.47 million, up 10.7 percent from a year earlier, according to JTB Tourism Research & Consulting.

Most visitors to Japan come from elsewhere in Asia Pacific. However, the Rugby World Cup will bring many tourists from Britain and Ireland – as England, Wales and Ireland are expected to perform well in the tournament – and France. England and France have the largest supporter bases in the tournament.

The cache of European visitors bodes well for visits further afield from Tokyo, Sawayanagi says.

“European tourists tend to stay for longer when they visit Japan and therefore spend more money on each visit,” he says. The Rugby World Cup “is going to be something that will impact the hospitality sector across the country.”

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