By Jeff Wynkoop
The Japan Tourism Agency announced yesterday that as of October 30th, 2016, for the first time ever in a calendar year the number of foreign visitors to Japan exceeded the 20,000,000 mark. The increase in Japan tourism is attributable to the continued strong demand by travellers from East Asian countries as well as a growing interest in tourists visiting regional towns and villages. This is a step in the right direction for the Japanese government in trying to meet its much publicized goal of increasing the number of annual tourists to 40,000,000 by 2020.
In 2013, the number of foreign tourists to Japan exceeded 10,000,000 for the first time ever, and over the last several years the number of foreign tourists continued to grow steadily, with 13,410,000 foreign visitors in 2014 and 19,740,000 in 2015. Although tourism to Japan temporarily slowed after the Kyushu earthquake in April this year, on an annual basis the number of foreign visitors has nevertheless kept increasing unabated. There is even potential for the number of tourists to eclipse 24,000,000 by year end.
Almost one third of all foreign visitors to Japan come from China, with the next highest home countries being South Korea, Taiwan, and Hong Kong. Tourists from these four countries make up over 70% of all foreign tourists to Japan. This is at least in part due to the rise of low cost airlines in East Asia and a marked jump in the number of cruise ships landing in Japan, which has outpaced last year over 1.5 times on a year-on-year basis.
The most popular destinations for foreign tourists are Tokyo and Osaka and everything in between, the so-called “Golden Road” that links Japan’s two biggest metropolitan areas. It is noteworthy, however, that the growth in tourism in these areas (up 58% over the last two years) has been overtaken by growth in the number of foreign tourists staying in Japanese regional towns and villages (up 69% over the last two years).
Not Enough Hotels
Regardless of the trend, the government still has much to do to help the country reach the ambitious 40,000,000 per year target. According to the Development Bank of Japan, there is a possibility that by 2020 Japan will still lack enough hotel rooms and places to stay for over 18,800,000 annual foreign visitors. To combat this, the government is considering relaxing restrictions on floor-area ratios for hotels and opening up the entire country to Airbnb-style private renting.
Getting Repeat Visitors
Furthermore, the government is concerned about effecting measures to encourage repeat tourists, since growth in the number of repeat visitors is the key to reaching the 40,000,000 per year goal. Whereas tourists used to come to Japan primarily to buy electronics and brand-name goods, there is a perceptible shift in foreign visitors being more interested in learning about Japanese culture and experiencing traditional Japan.
Accordingly, there are still significant hurdles the government and private enterprise face to stimulating latent tourist demand.
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