National

Chinese tourists step up for Abe as Japanese tighten belts

Bloomberg

When Jingyan Hou made her first trip to Japan in 1997, the office worker from Beijing spent ¥200,000 during a weeklong stay on accommodations, meals, transport and souvenirs.

On her second visit this year, she spent that much on just one Louis Vuitton handbag in Tokyo’s Ginza shopping district.

The increasing wealth of travelers like Hou, 45, underscores the opportunity for Japan to expand its tourism industry as China’s burgeoning middle class goes on vacations abroad.

The yen’s slump to a seven-year low against the dollar is also broadening the country’s appeal globally and bolstering the Abe administration’s effort to double visitors by the 2020 Tokyo Olympics.

“There’s a lot of room to boost the number of foreign tourists coming to Japan with these growing economies in our neighborhood,” said Daiki Takahashi, an economist at the Dai-ichi Life Research Institute in Tokyo. “They’ll have a big impact if the current trend continues.”

While Prime Minister Shinzo Abe’s growth strategy faces opposition on many fronts — from farmers fighting tariff cuts to corporations against outsiders on their boards — fostering tourism has few detractors. It is a bright spot in an economy that dropped into recession last quarter as consumers cut spending after the government increased the consumption tax in April to help rein in the world’s biggest debt burden.

Foreign visitors spent ¥1.5 trillion in Japan in the nine months through September, more than all of 2013, according to the Japan Tourism Agency. Money from inbound tourists is on course to surpass spending by Japanese travelers overseas next year for the first time in at least three decades, said Takahashi.

Hou is doing her part, spending about ¥1 million over a week in October, half of it on shopping.

“I can get more stylish products in Japan than what I can find back in China,” she said, with shopping bags in each hand at the Mitsukoshi department store in Ginza.

Her purchases ranged from clothes and accessories to cosmetics and Pokemon figures.

Chinese tourists are now the world’s top spenders, forking out $129 billion in 2013, World Tourism Organization figures show. Around 2 million mainlanders visited Japan in the first 10 months of 2014, more than double the number from 2006, according to the Japan Tourism Agency.

And yet for visitors to Japan, they remain behind South Koreans and Taiwanese. In all, more than 10 million foreigners traveled to the third-largest economy last year.

While the Japanese economy has struggled after the consumption tax bump in April and the yen has slumped 12 percent, duty-free sales at Isetan Mitsukoshi Holdings Ltd.’s Ginza outlet have almost doubled compared with the same period a year ago, said Kayo Yoshida, one of its customer service managers.

Mitsukoshi nearly tripled bilingual sales assistants at its Ginza store to 21 this year and is expanding its range of duty free products, Yoshida said.

As Abe seeks to revitalize regional areas, Japan is also attracting foreign tourists to destinations outside the well-trodden corridor from Tokyo to Mount Fuji and on to Kyoto.

The city of Sakaiminato, Tottori Prefecture, population 36,000, is one of the beneficiaries. The port is rebuilding some of the older infrastructure at its harbor as tourists visiting on cruise ships increase to a projected 16,000 this year.

On one day last month, 3,600 Chinese visitors disembarked from a liner, boarded 100 buses and set out sightseeing and shopping, said Tsuyoshi Furuhashi, a spokesman at the local tourism association.

“We need to attract tourists like this as our population declines in Japan,” Furuhashi said.

Japan lowered the minimum income requirements for Chinese seeking tourist visas in 2010 and might extend the use of multiple-entry visas to the whole country rather than just Okinawa, as it is now, according to the Foreign Ministry.

Indian tourists became eligible for multiple-entry visas for short sightseeing stays in July and waivers are in place for people from Indonesia, the Philippines and Vietnam.

While Japan is well rated for customer service, transport and cultural attractions, it has a reputation for expensive accommodations.

Manryo Inc., the operator of nine hostels for foreign tourists in Tokyo and Kyoto, has found one solution for visitors trying to keep lodging costs low.

Three of its hostels are former love hotels.

Manryo’s hostel in Tokyo’s Asakusa district offers its cheapest rooms at ¥2,200 per day, versus about ¥5,500 to ¥10,000 for a business hotel.

“We had only 350,000 foreign tourists when Japan hosted the Olympics for the first time in 1964,” said Masataka Ota, chief consultant at Japan Tourism Marketing Co. “It’s amazing to think we may have 20 million next time.”