In Kyoto recently for business, I was struck by how much happier the residents seemed than a year ago, despite the ancient city being in the middle of a pandemic. Even owners of businesses that supposedly benefit from inbound tourism appeared to be enjoying a break from the hordes of overseas visitors who previously crowded the city’s streets and temples.
The economic benefits of inbound tourism are typically overstated for two reasons. First, most measures fail to split out domestic tourism, which in Japan is a bigger contributor to the economy than visitors from overseas. Second, the measures generally don’t consider the “crowding out” effect: When tourist attractions become overcrowded, some domestic tourists choose to stay home instead. Adjusting for these factors, an analysis shows that even with last year’s record arrivals, inbound tourism contributed less than 1 percent of Japan’s gross domestic product in 2019.
Conversely, the costs of inbound tourism are generally understated. Noise pollution, strained public transport and antisocial behavior are just a few of the typical complaints, with costs borne by local residents who usually receive little benefit from the visitors. This has fueled a growing backlash against mass tourism around the globe, from Spain to the Philippines.
Japan should use the current break in inbound arrivals to design a better tourism policy. The government should abandon numerical volume targets for tourist arrival numbers and instead focus on attracting a smaller number of high-spending visitors. Discounts and subsidies to attract tourists (for example, the Japan Rail Pass) should be avoided. Hotel capacity in overcrowded cities like Kyoto should be capped. The domestic tourism industry should be supported and encouraged.
A better approach to tourism policy in Japan will not only ease the burden on residents; it will also ensure a better experience of Japan for inbound visitors.
Ross Cameron
Chiyoda Ward, Tokyo