Japan's regional tourism must be transformed to make it a more profitable industry, as surging post-pandemic demand has highlighted staff shortages and low productivity, a government report said Tuesday.
The government's call in its annual white paper on tourism comes as companies, which reduced their workforce amid coronavirus pandemic-prompted movement restrictions, are now seeing a rebound in travelers. Tourism is a key driver of local economic activity and employment.
From October, the government lifted its pandemic-induced ban on individual, nonprearranged trips from abroad and introduced a national travel discount plan for residents.
In a sign of recovery for the accommodation industry, the Japan Tourism Agency said that foreigner hotel stays in April exceeded 10 million nights for the first time since January 2020. The figure is equivalent to about 92% of the total for April 2019.
Despite a rebound in tourism, labor shortages and increased workloads are regarded as concerns that need to be addressed.
The Bank of Japan's tankan report on the key index measuring confidence of major firms in March found that the hospitality and food services industries were three times more concerned about staffing than manufacturing firms were.
The white paper also raised the issue of pay.
A 2022 government survey on wages showed that the average salary in the hotel industry was ¥3.46 million ($24,800), well below the ¥4.97 million average figure for all industries.
While pay across all industries on average rose for two straight years, wages in the hotel sector have fallen.
To improve wages, the government has recommended ways to increase each customer's average spending. A government-backed added value scheme that provides funding for works such as renovating rooms was cited as one way to increase sales.
The agency said, following interviews with 89 tourism facilities, that they were able to charge an average of 54.2% more for renovated rooms.