Tourist spending up in Japan as foreign travelers take in more cultural experiences

JIJI

Consumption by inbound tourists in Japan has started picking up as retailers and the tourism industry encourage spending on unique experiences and personal items, rather than souvenirs.

Department store operators had been ringing up big sales from foreign tourists, especially Chinese travelers, in a phenomenon that came to be known as “bakugai” — literally, “explosive shopping” — in which they snapped up products such as home appliances for families and friends.

According to the Japan Tourism Agency, travel-related spending, including hotel and meal charges, by foreign tourists totaled ¥1.08 trillion in the April-June period, a quarterly record.

Of that total, spending on shopping grew 15 percent from the year before to ¥414.6 billion.

But spending per person dropped 5 percent to ¥57,420, sharply lower than the ¥77,000 for April-June 2015, when bakugai demand was brisk.

The figures suggest that a fall in the amount of per-visitor spending has been more than offset by growth in the number of overall foreign visitors to Japan, industry sources said.

“There have been changes in how foreign tourists use their money during their stays in Japan, compared with the period when bakugai demand was strong,” an official of the Japan Tourism Agency said. “An increasing number of tourists are spending much on items such as cosmetics and cameras for their own use.”

Four major department store operators enjoyed double-digit growth in their sales of duty-free items in July.

“Demand was especially high for skin-lightening cosmetics,” noted an official of Isetan Mitsukoshi Holdings Ltd.

Sogo & Seibu Co., a unit of Seven & I Holdings Co., posted strong sales of duty-free goods after some outlets started accepting payments from the Alipay electronic settlement service, the largest such settlement platform in China, in late June.

The government has set a goal of increasing spending by foreign tourists to ¥8 trillion in 2020, more than double the amount spent in 2016.

One key to achieving the target is stimulating spending on leisure services.

According to a survey by the tourism agency, spending by foreign tourists on leisure services totaled ¥34.3 billion in the April-June period, up 24 percent year on year but accounting for only some 3 percent of overall expenditures by tourists from overseas.

“There is room for further growth in such spending, while (leisure services) are expected to help increase the number of repeat tourists” to Japan, an agency official said.

The tourism industry is also boosting efforts to encourage foreign tourists to spend more.

This summer, Izuhakone Railway Co., a unit of Seibu Holdings Inc., started offering services at a tourist facility in the hot spring resort town of Hakone, Kanagawa Prefecture, to help foreigners experience Japanese culture, such as wearing a kimono.

The number of users has been growing steadily, with foreign tourists accounting for more than 70 percent of the total.

In late July, major travel agency JTB Corp. started selling coupon books through a subsidiary with vouchers for discounts on items such as rickshaw tours and kimono rental services.