Invincible Investment Corporation Expects Lower Revenue Per Available Room Despite Japan’s Easing Restrictions
May 26, 2020 — Invincible Investment Corporation reported that its domestic hotel portfolio performance for the month of April 2020 has shown year- over- year declines in Occupancy of 60.8pt and revenue per available room (RevPar) of 83.4% due to travel restrictions arising from the global pandemic.
The performance for April 2020 stems primarily from the pronounced impact of the coronavirus (COVID-19) pandemic that has caused a significant reduction in demand for hotels due to the sharp decline in domestic and global travel.
Japan National Tourism Organization (JNTO) reported that inbound visitors declined by 99.9% in April (year-over-year). Domestically, the Government enacted State of Emergency has caused widespread voluntary restraints significantly reducing business trips and leisure travel. Prime Minister Abe has subsequently extended the nationwide State of Emergency through the end of May 2020.
The State of Emergency has been lifted by the national government for 42 of 47 prefectures on May 21.
However, since the declaration remains in effect for areas such as the Tokyo metropolitan area and Hokkaido, where many INV’s hotels are located, voluntary restraints on cross-prefecture travel and non-essential movement are still expected to continue.
Therefore, demand for hotels will continue to be sluggish for the time being, and we are forecasting RevPAR in May 2020 to decrease approximately 90% year-over-year.
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