International travel bans and a State of Emergency have savvy investors on the hunt for distressed hotel sales in Okinawa. According to the Ryukyu Shimpo newspaper, desperate hotel and resort owners are finding plenty of demand from corporate investors from the mainland and even overseas.
A Naha-based hotel operation consulting firm received as many as 60 inquiries from corporate buyers in May seeking to purchase hotels in Okinawa. The buyer profiles were large developers from the mainland as well as private investors. The director of a tourism advisory company in Okinawa reported an increase in inquiries from out-of-prefecture and overseas investors looking to buy whole-villa holiday rentals that offer both privacy and allow for social distancing.
Although the operating ratio of hotels has fallen dramatically since the start of the pandemic, some sitting low as 10%, and with inbound tourism off the table for some time, these investors are banking on Okinawa to draw on the domestic tourism trade in the short-term with an eventual recovery in the long-term.
The Okinawa Prefectural Government declared a State of Emergency on July 31 due to a sharp rise in coronavirus cases. On August 29 they announced it would be extended until September 5. The declaration was made just before the peak summer holiday season and Obon holiday, dealing another blow to the prefecture’s struggling tourism operators. Tourist numbers in August are expected to be down 70% from last year, with September forecast to see a 65% fall, and October to see a 55% drop.
Sources:
Travel Voice, August 27, 2020.
The Ryukyu Shimpo, June 9, 2020.
