Call for Thai investors to cash in on Tokyo Olympics in 2020

Thai investors are being urged to put their money into Japanese property, especially in hotels and elderly care centres, as demand is forecast to surge with the Tokyo 2020 Olympics.

Yoshihiko Oda, president of Kagaya Hotels Corporation, which operates five ryokans (traditional inns), said Japan still needs more investment to accommodate growing tourism.

Japan aims to attract 27-28 million international arrivals this year, up from 24 million last year. The country expects foreign visitor numbers to nearly double to 40 million in 2020, when it hosts the Olympic Games, and will therefore need more facilities to accommodate them.

But Mr Yoshihiko warned the hotel business in Japan has faced difficulties over the past several years due to weak domestic consumption, while many condominium and private houses have increasingly offered accommodation services to tourists.

Ryokans are one of the favourite forms of accommodation for Thai tourists when visiting Japan, so Thais should start thinking more seriously about investing in them, said Takashi Shinmei, president of J-Will International Thailand, part of Japan’s J-Will International, an investment and consultant company that also operates ryokans and elderly care centres.

“The best way for foreign investors to enter the ryokan business in Japan should be through mergers or acquisitions, as this will help enable them not to have to start from zero,” said Mr Takashi.

Currently, J-Will operates 17 hotels and ryokans plus 19 elderly care centres across Japan. So far, 10 companies in Thailand have expressed interest in investing in elderly care services in Japan, he said.

Takao Ikado, managing director of Ikado Tourism and Research and Consulting Inc, said it is a good time for foreign investors to look at Japan because of the extremely low lending rates.

The Japanese government is soliciting investment at home and abroad under the campaign “Invest Japan,” to restore the economy and strengthen long-term tourism growth.

“Thai investors have been advised to invest in some popular tourist areas like Hokkaido, Takayama and Tokohu, as well as other snow zones that are still short of rooms,” said Mr Takao.

Many Chinese firms have been investing in Japan for years, but the Japanese government believes Thai hospitality and real estate companies can offer tourists better services.

Since 2013, Japan External Trade Organization’s (Jetro) Bangkok Office has been inviting Thai businesses to expand into Japan. Jetro has given assistance to 110 Thai companies to that end, but only 15 of them have successfully established businesses in Japan, including three this year.

Thai outbound investment in real estate has been limited over the past 30 years, even as Thai investors have sufficient funds to actively participate abroad, but the trend has slowly started to change.

With the country’s economic outlook set to be subdued in the medium term, limiting opportunities for local property development, and with a growing desire among domestic firms to diversify their asset holdings, local players are increasingly exploring international opportunities for property investment, said CBRE Thailand.