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After over two years of hiatus due to the pandemic, Japan’s tourism sector was expected to rebound after the country partially reopened its borders on June 10. However, the move has received a tepid response even as the island nation is now accepting tourists from more than 100 countries and has doubled the daily entry limit to 20,000 visitors.
Japan’s tourism sector topped the World Economic Forum’s 2021 Travel and Tourism Development Index, a first for the country. Japan beat 117 economies covered by the index, ranking high for its number of cultural resources as well as infrastructure.
However, only 252 tourists entered the country between June 10 and June 30 under its new travel scheme, according to preliminary figures from the Japan Tourism Agency. At present, all foreign tourists visiting Japan must obtain private insurance that covers Covid-19-related medical expenses, travel as part of an organised tour group led by a recognised operator and wear a mask indoors and on public transportation. Independent tourists are not currently permitted entry but are expected to be allowed by the end of 2022. Japan’s current border rules for foreign tourists are one of the most restrictive in Asia except for China’s zero Covid policy.
Incidentally, foreign arrivals fell to 120,400 in June, down 18% from 147,000 in May when the borders were sealed, according to data released by the Japan National Tourism Organization (JNTO). Most visitors came from Vietnam (39,000), followed by China (17,600) and South Korea (8,700). Japan has been unable to attract more tourists despite having the lowest exchange rate in 24 years (136 yen to the US dollar).
Japan tourism pre- and post-pandemic
In 2019, Japan’s tourism industry drew a record 31.9 million foreign visitors. The travel and tourism sector collectively contributed $359 billion to Japan’s GDP that year.
“Tourism-related industries affect not only the lodging, activities, and food and beverage industries but also the agriculture industry,” Satoshi Yoshida, head of the Kutchan Tourism Association, told The Japan Times. Considering the current tourist figures and impact on the economy, the stakes seem to be high for Japan as the country seems determined to hit 60 million foreign visitors by 2030.
“We are not changing the 2030 goal and are trying to figure out how we will be able to achieve it,” said Kyoji Kuramochi, executive vice president of JNTO during an interview in 2021. He further expressed optimism that Japan’s high level of hygiene and diverse range of outdoor activities will be major selling points in the post-Covid era.
Japan’s travel and tourism sector could reach pre-pandemic levels by 2023, as estimated in the World Travel and Tourism Council (WTTC)’s Economic Impact Report (EIR). The sector’s contribution to Japan’s GDP could reach nearly 40 trillion yen ($292 bn) by the end of 2023, 2.2% less (in yen terms) than in 2019. Separately, a Development Bank of Japan survey for potential travel destinations post-Covid found that travellers from Asia ranked Japan at the top, whereas tourists from Europe, America and Australia ranked the country their second choice.
“After the pain suffered by Japan’s Travel & Tourism, the outlook for the future is much brighter,” said Julia Simpson, WTTC President and CEO, while adding that, “Removing testing and facilitating international travel will further boost the sector’s growth and fast-track the recovery.”
– reporting by Sakshi Dahiya, edited by Sumeet Gaikwad
