The term “Integrated Resorts” (IR) is used to describe a tourist destination where a casino is incorporated and is part of an integrated development that includes hotels, restaurants, entertainment venues (such as theaters), and MICE* facilities. In an effort to introduce IRs before the 2020 Tokyo Olympics as one of the growth strategies for tourism, the Japanese Diet opened the IR Promotion Bill for discussion on September 29. Given the positive effect of the introduction of two IRs in Singapore, cities in Japan where IRs are likely to be developed could see a number of hotel and MICE facilities being developed. This in turn is expected to bring a significant increase in tourists, and have a positive impact on overall tourist consumption.
If the number of foreign tourists exceeds the government’s goal of 20 million by 2020, calculations predict a shortage of around 14,000 hotel rooms in Tokyo and around 7,000 in Osaka. Furthermore, if IRs open in Tokyo and Osaka in 2020, and foreign tourists to Japan were to increase at a similar pace to what was seen in Singapore, tourist figures could annually grow 5% nationwide, and be in line with the government’s goal of 30 million by 2030. While it is expected that a few thousand new rooms will enter the market once IRs come online, the above estimates suggest that there will be ample demand to absorb the new supply.
Tourist spending from foreign visitors to Japan stands at JPY1.4 trillion as of 2013, and is estimated to expand to JPY4.3 trillion by 2030, accounting for about 1% of 2013 nominal GDP (JPY480 trillion). The retail market, in cities where IRs might be developed, could potentially have a growth in store openings, amounting to rental increases.
*MICE: MICE: Meetings, Incentives, Conferences, and Exhibitions
Download a PDF version of the press release here.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.