Japan: Accommodation Business Bankruptcy Related to The Covid-19

İn Japan the number of bankruptcies in the accommodation industry was 100 for the first time in 7 years, 1.5 times the previous year, about half of which are related to the new corona.

In November 2020, the third wave of new corona infection began, the “GoTo Travel” campaign stopped nationwide, and the accommodation industry was once again in trouble. There are many cases in which the lodging company that went bankrupt in 2020 went bankrupt due to the corona wreck that was originally in a state of sluggish performance and excessive debt.

In 2021, the number of newly infected people per day exceeded 7,000, and on January 7, a state of emergency was issued again in each of the three prefectures. While the exit of the corona wreck is not visible, there is a concern that the lodging company, which has been supported by the government’s subsidy and the emergency loan system of financial institutions, may be short of breath due to the reissue of the state of emergency.

The accommodation industry in the equipment industry with limited areas and facilities will take a considerable amount of time to recover. At the same time as measures to attract customers involving the local community, it is also necessary to provide flexible support for business continuity and business transformation.

Accommodation business bankruptcy 118 cases, 100 cases for the first time in 7 years
In 2020 (January-December), there were 118 bankruptcies in the “accommodation industry” (up 57.3% from the previous year), an increase of 1.5 times from the previous year. Since 2013 (118 cases), it has reached the 100 level for the first time in 7 years.

The number of bankruptcies in the accommodation industry in the last 10 years was the highest in 2011 (134 cases) when the Great East Japan Earthquake occurred, and 2020 was the second highest level along with 2013.

Total debt was 58,012 million yen (down 54.0% from the previous year), falling below the previous year’s level for the first time in two years. It was a reactionary decline due to two bankruptcies in the 40 billion yen range in the previous year.

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