Hotel development, openings and revenue management in Japan are in a world of uncertainty due to the ongoing saga over whether the postponed Tokyo Summer Olympics will even take place in 2021.

The Tokyo games are now scheduled July 23 through Aug. 8, but a final decision to go ahead is expected later this month. It is unlikely the event would be moved to 2022 or beyond.

Paris will host the 2024 Summer Olympic Games.

One possibility is that the Olympics go ahead this year but without spectators, a decision that would be of no use in filling hotel rooms and helping investors recoup investment.

Kiyoshi Tsuchiya, director and head of hotels at business advisory CBRE Japan, said it is virtually impossible for him to state categorically what will happen in a “quite confusing market and situation.”

According to January data from Tokyo Shoko Research, 118 hotels filed for bankruptcy in Japan in 2020, a 57.3% year-over-year increase and the first time hotel bankruptcies in Japan have surpassed 100 since 2013. These bankruptcies leave liabilities of 58 billion Japanese yen ($531.7 million).

Twelve bankruptcies were in Nagano prefecture, which contains numerous spa and ski resorts. Another 11 bankruptcies were filed in Tokyo, and nine in Shizuoka prefecture.

Hiroyuki Mizuno, executive officer and SVP of sales and marketing at Tokyu Hotels, said his firm is preparing with the understanding that the Olympics will be held, but the working scenario is difficult.

“Regarding the efforts of the Tokyo Metropolitan Government and the government of Japan, there is no policy yet on whether or not the [Olympic] stadium will be closed to spectators. Therefore, it’s not a situation where the attraction of spectators can be actively promoted, domestic and international sponsor companies included,” he said.

Nevertheless, he said he believed the hotel investment environment in Japan, including Tokyo, is good.

“Investments from 2020 to 2021 have fallen through amongst some investors before hotels have even opened or due to hotel openings being delayed. However, large-scale hotel projects in Tokyo have had no cases of the projects disappearing, even if the opening of the hotel is postponed. We at Tokyu Hotels Group also plan to open new hotels in Kyoto and Tokyo in 2023 and keep moving the projects forward towards opening as planned,” he added.

Tokyo-based Tokyu has three brands — Tokyu Hotel, Excel Hotel Tokyu and Tokyu REI Hotel — and 47 properties with 12,000 rooms and 3,400 employees. All but five of its hotels are in Japan.

In June 2020, it opened the 230-room Yokohama Tokyu REI and 200-room Fujisan Mishima Tokyu.

According to CoStar’s hospitality analytics firm, STR, Japan's hotel occupancy for full-year 2020 was down 52% year over year to 39.6%. Average daily rate for the same period declined 17.8% to 12,274.37 Japanese yen ($112.56), and revenue per available room declined by 60.5% to 4,860.91 yen ($44.58).

Hotel performance declines were more pronounced in Tokyo for the same period. Occupancy dropped 63.5% to 31.5%, ADR decreased by 19.7% to 15,779.97 yen ($144.71) and RevPAR fell 70.6% to 4,974.55 yen ($45.62).

Tokyu’s Mizuno said one major problem is the near-total absence of international travelers, although occupancy on the books is high around the rescheduled dates for the Olympics.

Inbound travel decreased by 99% in 2020, he said. It was mostly resorts that maintained high occupancy, in part due to the government’s "Go To Travel" campaign. However, hotel occupancy rates dropped significantly after the campaign’s suspension and the issuance of a second state of emergency.

"Due to this decline in occupancy, some hotels in the chain are temporarily closed until early March, and the business situation remains extremely difficult,” he said.

The reservations made for the original 2020 dates have been re-booked, he said.

"The reservation status for hotels in Tokyo and areas where the competition will be held during the Olympic game period is good," he said.