Overview of the Japanese Lodging Industry and Its Investment Trends – Past, Present, and Future

Topics: Hotel, Hotel chains, Lodging Pages: 15 (4161 words) Published: November 14, 2013
Overview of the Japanese Lodging
Industry and Its Investment Trends
– Past, Present, and Future
Emily U. Smith
Consulting and Valuation Analyst


June 2008

New York San Francisco Boulder Denver Miami Dallas Chicago Washington DC Atlanta Boston Newport RI Vancouver Toronto London Madrid Athens New Delhi Mumbai Singapore Hong Kong Shanghai São Paulo Buenos Aires Mexico City

HVS, Mineola, New York

Overview of the Japanese Lodging Industry 1

Overview of the Japanese Lodging Industry and
Its Investment Trends – Past, Present, and Future

Despite widespread waves of Westernization that have infiltrated modern Japanese culture in the post-World War II era, the Japanese lodging industry has generally managed to keep its shroud of “foreignness” intact. While neighboring Asian countries have boasted a host of American and European lodging developments in the past twenty years, Japan has predominantly stuck with the Japanese lodging model of ryokans (traditional inns), Japanesebranded hotels, and its own invention of capsule hotels. However, recent changes in the second half of the present decade have indicated a changing tide of sentiment, as investors reassess their traditionally held views of Japanese real estate, seeing the potential of tapping into the third-largest economy in the world. The barriers to entry into this decidedly Eastern and Western hybrid market are beginning to erode, and Western hoteliers and investors alike are poised to benefit from this opportunity. External Factors

The Influences of Culture
It is essential to understand the impact of Japan’s unique culture upon its economy and travel trends. Prior to Commander Perry’s trip in 1853, demanding that Japan open itself to the Western world, the country led a traditionally isolationist life, typical of several island nations of the same time period. Under Emperor Showa’s rule in the first half of the 20th century, Japanese citizens were schooled in their unique heritage, and nationalist sentiments reached their apex during World War II. Japanese school children are still taught about Japan’s unique cultural heritage dating back thousands of years, which is a far cry from most Western cultural traditions that are present today. This has led to an inherent belief of the Japanese race’s unique needs, which pervade key aspects of daily life such as food and lodging.

Emily U. Smith

HVS, Mineola, New York

Overview of the Japanese Lodging Industry 2

Western businessmen in Japan have often commented upon the interesting hybrid of East-meets-West culture that is found in Japan: Japanese businessmen wear Western-looking suits, drink beer, and sing popular Western songs at karaoke like typical Western businessmen (perhaps save for the karaoke tendencies); however, business “bonding” often takes place while sitting cross-legged and shoeless on a tatami (woven bamboo) mat floor as beer is poured for sempais (seniors in the office seniority poll), and a Western meal is ended with a bowl of rice. And heaven forbid the blatant clashing of cultures when that Western businessman is asked to join his Japanese colleagues in the nice, relaxing comfort of the onsen, a hot spring bath where no clothing is permitted (although, in an effort to be more aware of Western traditions, some Japanese businessmen have been taught to offer a small washcloth for modesty). The jokes abound as to interesting and regaling tales of the miscommunication between cultures that have resulted from this meeting of two worlds; however, one fundamental difference that must be noted is the adherence to Japanese custom and tradition. Japanese people believe strongly in their ancestry, which they trace back thousands of years. Furthermore, there are very few places that are as homogeneous as the island nation of Japan. The shared history, culture, and ancestry for these thousands of years of the common populace have bred a strong sense of pride...
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