Market Overview

The domestic space designing market for FY2019 (based on the sales at businesses) was estimated to have generated 1,710 billion yen, up by 6.2% on a YoY basis. Although the annual sales performance of space designing companies tends to be significantly affected by each project, the market for FY2019 was overall thriving, as both the commercial facilities and events have shown strong demand. Especially, the events and projects related with Tokyo Olympic and Paralympic Games that were to be held in 2020 and the demand for hotels and other accommodation facilities satisfying inbound tourism demand have prospered.

Noteworthy Topics

Changes in Market Environment Affected by COVID-19 Pandemic

The COVID-19 pandemic in 2020 has seriously affected the space designing market. The space designing industry, regardless of business forms, requires people to get together by nature. Ever since the global outbreak of COVID-19, gathering of people, that is the very basis of the industry, have been totally denied, causing commercial facilities as well as stores to significantly reduce the capital investment, and most events and exhibitions to be postponed or cancelled, which completely downturned the market to serious conditions.

On the other hand, the industry has been in the phase of reform, reflected by provision of online event services and development of online spaces using VR/AR, in order to adapt to the business systems suitable for new normal. Some businesses have enhanced such attempts by establishing special department to specifically and organizationally deal with it.

Future Outlook

The domestic space designing market for FY2020 is likely to drop by 25.1% on a YoY basis to 1,280 billion yen. Because of sudden changes in the market environment stemming from the outbreak of COVID-19 causing sluggish consumption and elimination of inbound tourism demand, which inflicted a severe loss on commercial facilities and the event industry. In particular, the event industry is likely to suffer a serious damage, as it has been shaken the foundation of its nature of getting people together at one place.

There are so many uncertain factors to decide the long-term forecast, but it is at least unlikely for the COVID-19 pandemic to be completely subdued within FY2021. As economic activities have been somewhat resumed when compared with FY2020, commercial facilities as well as events are likely to recover with the establishment of new-normal-based activities. However, such an optimistic forecast is because of a comparison with FY2020, meaning that the status in FY2021 is still a predicament without any complete recovery achievable within the fiscal year. The market in FY2021 is likely to flatten out, or increase slightly.

Research Outline