Published on : Thursday, March 26, 2020
Tokyo and International Olympic Committee agreed on a one-year delay and concerns are rife about whether small and midsized business in the tourism and service industries will be able to weather the coronavirus shockwave until the events are held next year.
An inbound tourism recovery was expected by the tour operators, hotels and eateries as the tourist traffic dried up and the domestic consumption was severely hit by social distancing.
From an expected 9 million domestic and 300,000 foreign spectators coming to the capital the postponement was likely to wipe out the demand.
By foreign travelers and domestic spending of 400 billion yen including purchases of merchandise and travelling to Tokyo and other hosting municipalities Goldman Sachs has estimated that the sports events will result in inbound-related consumption of 150 billion yen ($1.3 billion).
The Japanese bidding committee for the Tokyo Olympics and Paralympics had said it secured 46,000 rooms for organizers, sports governing bodies, media and sponsors during the tournament and all these reservations for this summer could be canceled.
Shigemi Sudo, the secretary general of the Tokyo Hotels and Ryokans Association felt relieved that the Tokyo Olympics are not cancelled but was still concerned about the outlook of the industry through next summer.
A meeting was held by the hotel industry body in Tokyo along with the officials of the Tokyo metropolitan government and a government-affiliated lender Japan Finance Corp. to discuss financial support for its members.
Sudo said that medium-and small-sized hotel operators are likely to face severe financial conditions amid the spread of the coronavirus infections
As of March 25 credit research firm Teikoku Databank said the number of bankruptcies due to the coronavirus fallout stood at 15 companies , with six in the tourism industry and three in the eateries sector.
Until the rescheduled Olympics brings the expected economic benefits analysts say that the government should step up the fiscal measures and support businesses facing financial difficulties.
Analysts say that the impact of the virus may linger, but economic gains of hosting the games will not be lost.