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Tourism is increasingly playing a significant role in Japan’s economy. According to government data, spending by foreign visitors in the country totalled an annualised $45.1 bn (7.2 tn yen, nominal) for the first quarter of 2024. This puts direct purchases in the domestic market by nonresident households in second place in terms of exports, behind cars and ahead of electronic components.
According to the numbers, foreign tourists’ spending in Japan has quintupled over the past decade. Before the Covid-19 pandemic, the annualised figure reached 4.6 tn yen for the quarter ended December 2019. The rebound started in the April-June quarter of last year, and the number has since risen.
Meanwhile, the number of foreign travellers in Japan has also exceeded the peak before the Covid-19 pandemic. According to government data, the monthly total exceeded the 3-million mark for the first time in March and has since been above it. In May, 3.04 million foreigners came to the country, 60.1% more than a year earlier.
For the first five months of the year, 14.64 million foreigners came to Japan, up 6.5% from the same period in 2019 before the pandemic. The largest number of visitors came from South Korea, followed by China, Taiwan and the US.
At the same time, foreign guests in Japan also spend more and differently. The latest White Paper on Tourism by the Japanese government revealed that inbound travellers spent an average of 204,000 yen (about $1,270 as of 28 June 2024) per capita in 2023, up 31% from 155,000 yen in 2019.
According to the whitepaper, tourists spent 52% more on experiences like sporting events, museums, and other entertainment and services compared to 2019. Lodging and transportation also increased (59% and 47%, respectively), while shopping decreased slightly by 1%.
The weak yen is boosting foreign arrivals and spending. In 2023, the currency was around 30% weaker (against the US dollar) than in 2019.
