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Making the most of Japan’s tourism boom

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In Brief

Japan registered a travel surplus of about US$10.6 billion in 2015, suggesting its growing competitiveness as an exporter of tourism. According to the Japan National Tourism Organisation (JNTO), the number of inbound tourists increased by 47.1 per cent to 19.7 million in 2015


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, outnumbering outbound tourists for the first time in 45 years. Foreign tourists also spent a record US$32.6 billion, up roughly 70 per cent from 2014. So what explains Japan’s booming tourist industry?

The Japanese government launched its Visit Japan Campaign in 2003, which led to a steady increase in the number of foreign visitors. But to explain the rapid increase in inbound tourists in recent years, we need to focus on developments since 2013. Since then, the government has taken vigorous steps to relax relevant regulations and, along with the business community, has made considerable efforts to promote inbound tourism and favourable external conditions. 2013 also saw a sudden depreciation of the yen. Other measures include the relaxation of visa rules for visitors from China and Southeast Asia, which began in 2013, as well as increased international and domestic flight routes served by low-cost carriers.

Japan has also grown more adept at marketing its unique cultural, environmental and historical attractions. UNESCO has designated Mount Fuji as a World Cultural Heritage site and washoku — Japan’s traditional dietary culture — as Intangible Cultural Heritage. Tokyo will also be the host of the 2020 Olympic Games. So far, Japan’s promotion of inbound tourism has been delivering its intended effects.

Remarkable economic growth in Asia has also served Japan well, as more households in the middle and affluent classes bring rising income and greater tourism demand. In 2014, the government also expanded the scope of duty-free items to all general goods including consumables, prompting a rapid increase in the number of duty-free shops.

According to the JNTO, tourists from within the Asia-Pacific region accounted for 85 per cent of arrivals in 2015, with China alone accounting for 25.3 per cent. While visitors from the United States and Europe are mostly independent travellers, 40 per cent of those from China and Taiwan come on group tours concentrated in the Kanto and Kansai regions, primarily for shopping.

In 2015, Chinese tourists’ per capita spending in Japan was US$2,735, 1.6 times greater than the average foreign tourist. Overall spending by Chinese tourists was US$13.5 billion, up 153 per cent from 2014, accounting for 40 per cent of the total spending in 2015. The ripple effects of Chinese tourists’ spending sprees have spread across regions and industries. The issuance of multi-entry visas to Chinese tourists has led to a rise in the number of repeat visitors, and many will likely return as independent travellers with a greater variety of travel itineraries. Their travel behaviour undoubtedly will have a significant impact on the inbound tourism environment as well as on economic indices.

To further the tourism boom, Japan should embrace changes that can improve foreign tourists’ experiences. What is needed are multilingual signs and warnings on matters that could negatively impact tourists’ experience. This includes multilingual menus to aid those with food allergies or religious objections. The development of wearable technology or smartphone apps capable of translating scanned characters is one possible way to help reduce the number of staff members needed to attend to foreign visitors and prevent accidents caused by insufficient information. This would also enable the collection of information on the needs of travellers. Tourism is a service industry and cannot flourish without attention to tourists’ needs.

Many foreign tourists are using personal blogs, social networking media and review sites, either as a source of information or as a tool for communicating their experiences in Japan. All of this points to the importance of proactively providing multilingual information and making free WiFi services available in more areas.

One notable recent trend among foreign tourists is a growing interest in daily life in Japan, as shown in their increasing visits to local businesses and leisure establishments. Japan should therefore ensure that it does not become viewed as just another cosmopolitan country. Many of the things foreign visitors find attractive are associated with the culture and customs unique to Japan, natural landscapes and interactions with local people.

Earlier in 2016, the government announced its new aim to increase the number of inbound tourists to 40 million people per year and their related consumption to US$76.8 billion by 2020, doubling initial goals. This suggests that Japan’s inbound tourism boom has had a greater-than-expected impact.

So far this boom has been sustained in part by favourable external conditions. Going forward, though, both the government and businesses need to take more vigorous steps to make the tourism sector resilient against uncontrollable external fluctuations. Since tourism encompasses a broad range of industries including transportation, accommodation and hospitality, capturing external demand can give a big boost to the Japanese economy. While creating a tourist-friendly environment is important, it is also crucial that Japan better understands what aspects of Japan are attracting foreign tourists. The ongoing inbound tourism boom is an opportunity to attract potential parties who can help create new growth industries.

Yoko Konishi is a Senior Fellow at the Research Institute of Economy, Trade and Industry.

6 responses to “Making the most of Japan’s tourism boom”

  1. Very valid point about increasing multilingual resources for tourists. Two good friends who are very experienced travelers found the lack of English facility in out of the way places like Takayama, Nagano, the Japan Alps made for some big challenges during their trip. It was even very difficult for them to get an English language GPS for the car they rented. The government needs to do more to foster greater language capabilities in service personnel around the country if it wants to make travel in Japan easier than it is now.

    • As a regular traveller to Japan over the past few years and someone who always brings a small group of either Family or Friends along too, I would also like to stress the ongoing need for more multilingual resources. I always ensure that my itineraries include both city and country and, although there have been many improvements to date, I find that in most of the smaller towns, when visiting Museums, Art Galleries etc, the explanations attached to displays are often in Japanese only. To really appreciate the History and Culture of Japan, I would happily second the motion of many Tourism bodies that more must be done to incorporate and promote travel to rural/country areas!

      • I enjoyed reading your comment while imagine the second motion of Japan’s tourism, thank you! In particular in rural areas, there are a lot of small and medium size establishment related to tourism. I hope that they introduce tourists’ friendly environment without troublesome or high cost by using ICT technology.

    • To Richard,
      Thank you for sharing the story of your friends in Japan Alps. I could imagine the car navigation didn’t have English mode. In nature trip, it is very important to have correct geographic, road and neighborhood information to enjoy them safely. I hope that your friends will come back to Japan again and have another good experience.

  2. I appreciate the statement that “Tourism is a service industry and cannot flourish without attention to tourists’ needs” in the article titled Making the Most of Japan’s Tourism Boom. However, the acknowledgement of Japan’s problematic inability and unwillingness to present in English is understated. Ms. Konishi’s opinion that the Japanese government “has taken vigorous steps to relax relevant regulations” sadly ignores the scope and severity of Japan’s outdated, ironclad multiplicity of tourism law. This has been covered extensively in Japan Times, Nikkei Asian Review and other outlets over the years. The most significant (relevant, if you like) of the myriad of anti-tourism laws, is that of licensure for language interpreter tour guides. It can be too easy to say that over-regulation is the cause of (any economic development problem), but Japan’s licensure regime is a worst-case scenario. It prevents qualified would-be guides from providing Japan’s best tourism product.
    There is a tendency in Japan to deny the existence of a problem, then to provide blanket excuse of “cultural difference” until so much damage and loss has occurred that we have to scramble to find a work-around because it’s just too hard to face the actual cause. Those problems are almost always our own doing. This article lingers in the denial stage. With all other sectors of Japan’s economy contracting, Japan will need to learn to provide better tourism services, beyond just polite but frustrating experiences, if it wants to capture and hold that share of the world’s tourism market.

    • I appreciate that you gave another aspect lacking in my article. I follow your suggestion, I did read some of the articles related to the regulations about Japan’s tourism in the Japan Times and the Nikkei Asian Review. I will discuss about the problems of tour guide licenses system, shortage of accommodations and the variety and number shortage of optional tours in my next article. Thank you!

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