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Coronavirus

Hotels in Japan slash prices as occupancy rates plunge

Kyoto and Fukuoka see discounts of up to 25% during normally busy season

The Imperial Hotel in Tokyo: Occupancy rates plunged to near half in February. (Photo courtesy of the company)

TOKYO -- As Japan suffers a coronavirus-induced drop in travel, hotel chains are slashing room rates for about 30% of stays during the normally busy early spring season, a Nikkei analysis of online booking sites shows.

Prices were down on average about 20% on Monday from those offered on Feb. 26 as shown on the Rakuten Travel and Jalan.net online booking sites for 1,087 of the 3,624 stays covered.

The average discount was deepest for hotel stays in Fukuoka, which dropped 25%, followed by Kyoto at 24%. Prices for many stays in central Kyoto have more than halved in the last five days.

In Tokyo, where the average price dropped 22%, stays in the foreign-tourist-heavy area of Ueno-Asakusa showed steep declines.

Prime Minister Shinzo Abe last week called on Japan to cancel, postpone or reduce the size of nationwide events for the next two weeks, and urged a similar closure at public primary, middle and high schools.

The move reverberated through travel websites. Nikkei tracked prices of one-night stays for two adults in Tokyo, Kyoto, Osaka, Sapporo and Fukuoka on March 28 -- the last Saturday of the month and traditionally a busy day due to the spring school break.

Although March 28 is about a month away, many hotels apparently expect demand to remain weak to that date. Price cuts were particularly steep on Feb. 27 and Feb. 28.

"Normally, it's unusual to see price cuts a month before the travel rush," a representative from a major Tokyo hotel said.

Hotel prices in the Ueno-Asakusa area, which is popular with foreign tourists, showed a steep decline in the survey. (Photo by Karina Nooka)

The event cutbacks have eroded demand for business travel as well. The price of a nonsmoking double room at an APA Group hotel in Tokyo's central Chuo Ward plunged roughly 70% to just 5,000 yen ($46).

"There have been reservation cancellations related to events being called off" in the greater Tokyo and Osaka areas, a company representative said.

The occupancy rate at the Imperial Hotel in Tokyo for February plunged 30 percentage points on the year to 51%, and management is bracing for a similar or steeper drop in March.

Hotel & Associates, which operates 10 hotels across Japan, has been hit with a wave of cancellations since Thursday. A location in Osaka's bustling Namba district lost bookings for roughly 1,050 rooms in March -- 15% of its monthly capacity -- amid concert cancellations and a decision Sunday to hold the spring basho sumo tournament without spectators for the first time.

Another of the company's hotels in Tokyo has been hit by the temporary closure of Tokyo Disneyland and Tokyo DisneySea, and a Kyoto hotel saw canceled bookings from a school trip from Canada.

Meanwhile, February sales at many Japanese department stores recorded double-digit drops from levels a year earlier.

Preliminary same-store sales in February announced on Monday by Japan's five major department store chains all fell. Four of the chains suffered double-digit drops, with Daimaru Matsuzakaya Department Stores marking the biggest decline at 21.8%. Takashimaya recorded an 11.7% drop, while Isetan Mitsukoshi fell 15.3% and H2O Retailing 14.3%.

"Japanese people have started to avoid going out," said a representative of Daimaru Matsuzakaya, owned by J. Front Retailing. The chain's cosmetics sales have plunged 44.5%, while sales of food, which had stayed solid even after last October's consumption tax increase, sank 14.2%.

The outbreak is forcing store operators to adjust strategies. Daimaru Matsuzakaya is closing 16 locations for four days this month, and Isetan Mitsukoshi Holdings and Takashimaya are shortening hours.

Such measures mean that "sales will slump more in March," a representative from department store operator Sogo & Seibu said.

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