Delayed Olympics Leaves Hotels Deserted and the Economy in Limbo

The Olympic cauldron will remain unlit and its stadium empty on Friday as the virus-triggered postponement of the Tokyo Games leaves disappointed fans wondering if its still worth holding on to tickets and hotel operators fretting over thousands of vacant rooms.

Japan will still mark the day originally scheduled for the opening ceremony with a national holiday. But there will be little to celebrate amid continued uncertainty over the feasibility of a revamped staging of the Games next year.

Dylan Crain, a resident of Tampa, Florida who had tickets to attend Friday‘s opening event, said he’d be less willing to go to a Games currently rescheduled to start on July 23, 2021.

“We‘d meticulously made a timeline, set up everything and were happy with our accommodations,” said Crain, who helped plan the trip for a group of 12. “Now, rescheduling all of that, in a compressed timeline with so many people, it’s hard to justify that. Not sure everyone would even feel safe.”

The government had expected the Games to fuel a surge in overseas visitors to 40 million this year; now, it may not even reach 5 million. Spending by overseas visitors will be a fraction of the 4.8 trillion yen ($44.7 billion) in 2019, with the failed Olympic bet threatening to re-entrench Japanese firms conservative stance on investment.

Getting Ready for Big Time

Japanese hotels spent trillions of yen in preparation for the Olympics

Source: Ministry of Finance

“This was supposed to be the busiest time for us ever,” said Naoyuki Fukuuchi, managing director at Japan Hotel Association. “Instead, we are in a dire situation like never before.”

In a central bank survey earlier this month, sentiment among large hotel and restaurant owners nosedived to a record low of -91, the worst among any business category. Zero marks the dividing line between optimism and pessimism.

Pessimism Like Never Before

Sentiment among hotel owners is much worse than in other industries

Source: BOJ's Tankan index on business confidence

A number of big hotel chains including Prince Hotels & Resorts have delayed opening new facilities. A third of the 620,000 workers in the hotel industry were still on leave as of May, according to the ministry of internal affairs. But even with staff furloughed, some hotels havent had the reserves to weather the storm.

The White Bear Family Co. and its group companies, which ran hotels and sold travel packages, filed for bankruptcy protection with 35 billion yen in debt, a record case for Japans tourism industry, according to research firm Teikoku Databank.

Illuminated Olympic rings float in the waters off Odaiba island.

Photographer: Toru Hanai/Bloomberg

Victor Warren, who played hockey for Canada at the 1964 Tokyo Olympic Games, had planned to attend the Games this year with a fellow Olympian from 56 years ago, John McBryde, who won a bronze medal with the Australian hockey team.

Warren, 82, is determined to attend next year, come what may. “The Games are a life-altering experience, and something one will never forget,” he said.

But others have scrapped travel plans altogether. Emma Chirnside, a 29-year-old market researcher in Sydney, and her boyfriend had planned to come with another couple to root for a friend on Australia‘s womens’ water polo team.

“Once we went into lockdown in Sydney it was like, no, were not doing this,” Chirnside said.

— With assistance by Jason Clenfield, Lisa Du, Kurumi Mori, Ayai Tomisawa, and Reed Stevenson