Over 14.6 million international visitors went to Japan between January and May, in accordance with the Japan National Tourism Organization. In March alone, almost 3.1 million people visited the country, the highest Monthly total since records began in 1964.
If this trend continues, Japan will surpass its record of 31.9 million tourists set in 2019, just before the COVID pandemic.
Total incoming tourism expenditure rose to 1.75 trillion yen ($10.8 billion) in the primary quarter of the yr, making tourism Japan’s second-largest “export,” just behind cars and ahead of products resembling semiconductors, in accordance with Fortunes Calculations and data from Oxford Economics.
It’s the primary time for the reason that last quarter of 2019 that tourism spending has are available in second, notes Norihiro Yamaguchi, senior Japan economist at Oxford Economics. Domestic travel nearly ground to a halt in the course of the pandemic, but quickly recovered after Japan began easing its COVID controls in September 2022. Japan lifted all restrictions in April 2023.
Tourists in Japan currently have high purchasing power because the yen has hit record lows against the U.S. dollar, making hotels, sightseeing and family meals cheaper for foreign visitors than before the pandemic.
But Jeremy Bek, global head of Japanese travel platform Rakuten Travel, believes that the boom in Japanese travel isn’t just resulting from a weak currency.
Visitors today want unique, social media-friendly experiences, not only food and shopping. “It’s because of Instagram culture, right?” says Bek. “It’s not about what you eat or do. It’s about what people see when you eat and do. And Japan is beautiful. There are so many beautiful things to post on Instagram.”
How does a weak yen help tourism?
The yen, long a refuge for investors in times of crisis, has lost value against the dollar. A yr ago, one US dollar was price 140 yen; today it’s price around 161 yen.
The US Federal Reserve’s “higher for longer” rate of interest policy is making the US dollar more attractive to investors and putting pressure on many Asian currencies.
Japan has resisted raising rates of interest in its decades-long battle against deflation. The Bank of Japan kept its benchmark rate of interest in negative territory whilst other central banks tried to follow the Fed’s moves in the course of the rate-hiking cycle between 2022 and mid-2023.
In March, the Bank of Japan raised its benchmark rate of interest above zero for the primary time in 17 years. The hike got here after Japanese corporations agreed to large wage increases, raising hopes that Japanese consumers could spend more and stimulate the economy.
Japanese corporations have previously viewed a weak yen as a positive, because it lowers the price of exports and increases the worth of profits repatriated abroad. But now the yen could also be too weak for Japanese corporations’ liking, as expensive imports squeeze margins and depress consumer spending.
Even Japan Airlines – an organization whose revenue relies on travel – is increasingly suspicious the weak yen, as overseas travel becomes prohibitively expensive for a lot of Japanese.
Why does Japan complain about overtourism?
Rakuten Travel is benefiting from the boom in Japanese travel. Bookings increased by 75% in the primary quarter of 2024 in comparison with the identical quarter in 2019, before the COVID pandemic, says Bek. Gross transaction value also increased by 200% in the identical period.
According to Japanese government data, most tourists come from South Korea, mainland China, Taiwan and Hong Kong.
According to Bek, tourists are in search of authentic and more immersive experiences quite than the large attractions of Tokyo and Osaka. Off-subway bookings are increasing faster than on-subway bookings as travelers search out experiences resembling kaiseki dinners, hot springs and nature experiences in second- or third-tier cities, Bek says, citing data from Rakuten Travel.
Some Japanese grumble in regards to the travel boom, complaining about overcrowding and bad manners amongst tourists. (Several other tourist destinations, resembling Spain and Greece, are also experiencing a backlash against “overtourism”).
In Kyoto, a serious tourist attraction, a mayoral candidate even won office because of complaints about tourists. Koji Matsui opposed Overtourism refers back to the dissatisfaction of tourists who drag their suitcases into overcrowded public transport.
In one other case, the Japanese city of Fujikawaguchiko erected a barrier blocking a famous photo spot of Mr Fuji. Locals were angered by the ever-increasing variety of tourists littering, trespassing and ignoring traffic laws of their pursuit of a social media-worthy photo.
Nevertheless, tourists should not deterred and proceed to look for the right photo. People drill holes within the barrier to take photos, says Bek.
Due to the influx of holiday makers, some attractions and businesses are considering introducing dual pricing: a typical price for Japanese residents and the next price for tourists.
Himeji is consider asking Foreigners are being asked to pay more to go to the 400-year-old Himeji Castle, a UNESCO World Heritage Site, ostensibly to finance obligatory maintenance work.
Kyoto Mayor Matsui urges for higher tariffs for tourists to alleviate public transport; the town has also introduced Express sightseeing buses that stop only on the major tourist attractions.
However, Bek believes that concerns about overtourism are mainly limited to big cities like Tokyo, Kyoto and Osaka. Lesser-known cities should not yet “overpopulated,” he says.
Fortunately for tourists, the hotels he works with should not desirous about imposing higher prices on foreigners. Bek notes that hotels still have enough capability to serve each incoming and domestic tourists. Despite the travel boom, he believes Japan’s hotels are playing it secure in relation to capability.
“They don’t want a repeat of the COVID situation,” he says. “If they rely too much on international tourists and then everything closes, they’ll be left without customers.”
