By Junko Fujita and Ritsuko Shimizu

TOKYO (Reuters) – Hoshino Resorts, an operator of luxury Japanese-style hotels, plans to shift its focus to domestic travellers after a plunge in foreign visitors amid the coronavirus pandemic and a delay in the Tokyo 2020 Olympic Games, its chief executive said Friday.

Hoshino Resorts is among the hundreds of thousands of hotel operators globally struggling with weak travel demand due to the epidemic.

The company closed four of its hotels in Japan, including Hoshinoya Tokyo in the busy Otemachi business district, which typically has an occupancy rate of about 90%, mainly driven by wealthy foreigners.

Occupancy rates in other hotels fell to between 20% and 40%, chief executive Yoshiharu Hoshino said.

“We are going to review our services, including meals, in order to accommodate more of local people’s preferences. Particularly, Hoshinoya Tokyo’s demand from foreigners was too strong. But now we want to attract residents of Tokyo to that facility,” Hoshino told Reuters in an interview.

Hoshino is betting that Japanese people will start travelling locally once the government lifts its state of emergency order on May 6.

Japanese hotel developers and operators had envisioned a potential surge in demand from foreign travellers ahead of the Tokyo 2020 Olympic Games. But organisers decided in March to delay the games for a year.

Japan’s hotel occupancy rate tumbled to 30.5% in March, according to preliminary data from global hotel research firm STR, the worst monthly average on record as the coronavirus pandemic drastically reduced the number of travellers.

That number may drop further. Prime Minister Shinzo Abe last week expanded a state of emergency to make it nationwide, giving authorities more power to encourage people to stay home and businesses to close as the coronavirus outbreak in the country spreads.

The order ends after Japan’s weeklong Golden Week holiday, meaning its tourism industry will miss a busy season.