Japan continues to draw record numbers of foreign visitors. In April, the number hit 1.76 million, setting new record highs for three months in a row. The number of Chinese tourists visiting the country during the popular cherry blossom season more than doubled compared to a year earlier. The number of inbound tourists in the first four months of the year surged 43 percent from the same period of 2014. If the trend continues for the rest of the year, the annual total could reach close to 20 million.
It would not be surprising if the government’s goal of welcoming 20 million annual inbound tourists is achieved well ahead of the target year of 2020, when Tokyo hosts the Summer Olympics. The Abe administration has set a new goal of boosting consumption by inbound tourists from ¥2 trillion last year to ¥4 trillion by 2020. It hopes to develop inbound tourism into a new engine of the economy that will generate 400,000 new jobs.
The government should identify what policy steps still need to be taken to make Japan an attractive destination and should steadily implement the measures so that the inbound tourism boom will become a long-term trend rather than a temporary phenomenon at the mercy of economic and other factors.
With the economy still mired in sluggish growth, the retail industry has come to rely greatly on robust demand by tourists from other parts of Asia, especially visitors from China, who buy so much that their shopping sprees have been labled “explosive.” Their total consumption in the January-March quarter surged 64 percent from a year before.
The government has introduced measures to promote inbound tourism and consumption, such as easing visa requirements and expanding the scope of goods that are exempt from the consumption tax. But the primary reason for the boom is the continuing economic growth in many other Asian economies, which boosted the income levels of people in those countries and their appetite for overseas travel, and the yen’s fall against other currencies, which made visits to Japan more affordable.
International tourism can be affected by various factors, ranging from economic conditions to tensions in relations between countries, infectious diseases and natural disasters. Inbound tourism to Japan plunged sharply when the nation was hit by the Great East Japan Earthquake and the Fukushima nuclear crisis in 2011, and the number of Chinese visitors has risen and fallen in accordance with the state of bilateral ties, which have been repeatedly strained over a series of issues.
To help maintain the upward trend, further government and private-sector efforts are needed to make Japan more attractive as a travel destination. Such efforts can start with ensuring there is enough staffing at customs and immigration checkpoints at airports to keep pace with the rise in the number of visitors.
The inbound tourism boom has pushed up room occupancy rates at many hotels, with figures topping 80 percent in Tokyo and Osaka last year — in some cases resulting in room shortages. One solution would be to diversify the destinations of foreign tourists, which still tend to be concentrated in Tokyo, Osaka and other well established tourist areas. Earlier this month, the government identified seven areas across Japan as alternative routes for inbound tourists, and plans to subsidize public-relations campaigns and other efforts by local organizations.
While attention tends to focus on the surge in the number of foreign visitors and their spending, their total consumption is still a fraction of the demand by domestic tourists, who spent ¥18.8 trillion in 2014, down by ¥1.4 trillion from the previous year. Efforts to revitalize domestic travel demand — which is forecast to be on a downward trend with the nation’s low birthrate and graying population — should also be made to sustain the travel industry. Such an effort can contribute to enhancing Japan’s attraction for all tourists.
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