Tourism Overview

Tourism Overview

Japan's tourism market expected to grow again
post-corona

Japan's inbound tourism market has shown remarkable growth, with the number of foreign visitors traveling to Japan in 2019 reaching a record high of 31.88 million (2.2% more than the previous year), marking the seventh consecutive year of record high (See Figure 1). In the same year, Japan earned about 46.1 billion USD in foreign tourist expenditure from visitors to Japan, moving the country to seventh place in the world, ahead of Germany and Australia. The travel and tourism sector contributed 359 billion USD to Japan's GDP, making it the world's third-largest market in this sector after the United States and China.

The inbound market’s growth can be attributed to the government's initiatives to place tourism as a key pillar of Japan’s growth strategy, such as easing visa requirements and expanding the consumption tax exemption system for foreign visitors, as well as the private sector's initiatives such as improvement of the transportation network (including air, rail, ports, etc.) and development of a welcoming environment (including multilingual signage and inbound tourism-related promotions).

Bar graph showing the number of foreign visitors to Japan (2010-2019). In 2011, the number of visitors to Japan was 6.22 million, the lowest in the period, and it has increased every year since then, reaching a record high of 31.88 million in 2019. 8.61 million in 2010, 6.22 million in 2011, 8.36 million in 2012, 10.36 million in 2013, 13.41 million in 2014, 19.74 million in 2015, 24.04 million in 2016, 28.69 million in 2017, 31.19 million in 2018, and 31.88 million in 2019. Created based on data from the Japan National Tourism Organization (JNTO).
As per the WEF’s (World Economic Forum) Travel and Tourism Competitiveness Report 2019, out of 14 parameters to measure travel and tourism competitiveness, Japan ranked high in “Safety and Security,” “Health and Hygiene,” “ICT Readiness,” “Ground and Port Infrastructure,” and “Cultural Resources and Business Travel.” Japan’s overall ranking came to be fourth after Spain, France and Germany. These results also confirm that Japan is globally recognized and highly regarded as a tourist destination.

With the 2020 Tokyo Olympics and Paralympics (postponed to 2021) and the Expo 2025 to be held in Osaka, a further increase in tourists visiting Japan can be expected. However, with the global spread of the novel coronavirus since January 2020, inbound tourism demand has declined significantly. In particular, this has significantly impacted the local economy, confirming that tourism plays an important role in the local economy.

On the other hand, of the total Japanese travel market in 2019 (27.9 trillion yen), while the inbound market is still in the process of growth, accounting for just under 20%, domestic travel including day trips and overnight trips by domestic residents accounts for nearly 80% (See Figure 2). Therefore, it is expected that the demand for domestic travel by domestic residents will first recover, depending on the coronavirus situation.

Pie chart showing “Breakdown of travel expenditure in 2019 (overall 27.9 trillion JPY)”. “Japanese domestic overnight travel and day trips” is the largest at 78.6%, Inbound travel at 17.1%, and Outbound travel at 4.3%. Created based on the Japan Tourism Agency's Travel and Tourism Consumption Trend Survey.

As per a questionnaire survey of overseas travellers from 12 countries/regions in Asia, Europe, America, and Australia, Japan ranked first in Asia and second in Europe, America, and Australia as a potential travel destination post-corona (See Figure 3). Additionally, over 60% of Chinese, Hong Kong, Taiwanese, and Thai nationals expressed their wish to visit Japan. Therefore, it is highly likely that people who are unable to travel to Japan for the time being will plan to travel post-corona. The inbound market is also expected to recover post-corona.

Bar graph showing “Top 10 trending travel destinations (countries/regions) post-corona”. The survey covered 12 countries/regions: South Korea, China, Taiwan, Hong Kong, Singapore, Malaysia, Indonesia, the United States, Australia, the United Kingdom, and France. 5,662 respondents were counted as having multiple answers, and for each country, the bar graph shows the percentage of the respondents in the following three regional categories: “Overall,” “Asia,” and “Europe, USA, and Australia. Japan ranked first in “Asia”, and second after USA in “Europe, USA and Australia”. Created based on data from the Development Bank of Japan.

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