Japan
In 2019, tourism accounted for 2.0% of Japan’s GDP. Following the COVID-19 pandemic, international visitors fell to 4.1 million in 2020, down by 87% from 2019. The inbound tourism expenditure in 2020 was JPY 1.2 trillion, a 77.1% decrease from the previous year. In 2021, international arrivals decreased to 246 000, a 99% decrease compared to pre-pandemic levels.
Asian markets remain the key source of inbound visitors for Japan, accounting for 3.4 million international tourists in 2020, or 83%.
The domestic market was relatively less impacted. In 2021, the total number of domestic overnight trips was 141.8 million, down 54.5% compared to 2019. According to the National Tourism Survey, this contributed to JPY 7 trillion, or 76.1% of total tourism expenditure.
Japan is working on the recovery of domestic demand as a first step in the recovery of the tourism economy.
The Japan Tourism Agency, an external body of the Ministry of Land, Infrastructure, Transport and Tourism, takes a leading role in tourism policy and its co-ordination. The Agency represents Japan on issues relating to tourism and the promotion of Japan as a tourist destination. It executes the Visit Japan campaign and other marketing activities through Japan National Tourism Organization (JNTO).
A Ministerial Council for the Promotion of Japan as a tourism-oriented country attended by all ministers unifies government efforts on tourism. A cross-ministerial budget has enabled numerous projects to be delivered. This budget has been maintained and now includes a subsidy to support historic landscapes, cultural tourism centres and national parks. The private sector is invited to regular Tourism Strategy Promotion Council meetings as experts in the field to give their opinion on relevant topics.
Local government’s role is to improve the attractiveness of local destinations. The national government supports regional initiatives by providing statistical data, initiating area-wide co-operation and supporting regional development. Destination management organisations, in co-operation with stakeholders, including national and local governments, formulate and co-ordinate the implementation of strategies for destinations.
The Japan Tourism Agency’s budget for 2022 was JPY 142.6 billion (twice the 2019 budget of JPY 71.1 billion). This includes JPY 8 billion from a new international tourist tax established in January 2019. The budget is broken down as follows:
JPY 10 billion is allocated to create signature products and services which are profitable and contribute to the local economy.
JPY 13 billion is allocated to preparing the receiving environment for inbound tourists (e.g. multi-language signboards, cashless systems, automation of immigration processes).
JPY 100 billion is allocated towards revitalisation and adding higher value to existing tourist destinations.
In addition, the Japan National Tourism Organization receives an operating expenses subsidy of JPY 6.5 billion from the central government to implement projects, including promoting travel to Japan.
Source: OECD, adapted from the Ministry of Land, Infrastructure, Transport and Tourism, 2022.
In December 2020, Japan formulated the Policy Plan to Prevent the Spread of Infection and Restore Demand for Tourism, focusing on the post-pandemic period. The plan includes improvements to productivity and the diversification of demand, both of which have been areas of concern for some time.
The main short-term focus is on stimulating demand for domestic travel (see box below). Key areas set out in the Policy Plan include:
The revival of hotels, traditional inns and tourist areas: a subsidy and expanded financing system, specifically for restoring tourist facilities and creating high-quality environments based on regions’ regeneration plans.
Product development: provision of a richer product to attract domestic and international tourists, enriching tourism resources using digital technology, creating tourist sites that are profitable and attractive and enabling visitors to gain a deeper experience in local areas. This involves collaboration with tourism operators and destination management organisations, together with a wide range of stakeholders such as transport businesses, the fishing industry, agriculture, and local suppliers.
Popularisation of ‘workcations’: creating travel opportunities and equalising travel demand by promoting workcations (work and vacation), bleisure (business and leisure), and the use of satellite offices by implementing model projects that improve the environment for both companies and the community.
While the number of tourism business closures increased significantly, the number of bankruptcies in the accommodation and travel sectors was fewer than during the global financial crisis (2008-09) and the Great East Japan Earthquake (2011) due to government support measures.
Additional measures for the revival of international business tourism include introducing new technology and knowledge necessary for hosting hybrid meetings, incentive, conference and events (MICE) events that combine face-to-face and online participation and the acquisition of international accreditation for infectious disease control at MICE-related facilities.
To address the issue of low productivity in the tourism sector (relative to other sectors), recovery plans involve initiatives to increase revenue through value-added services and introduce new demand while reducing the costs of digital transformation technologies. The aim is to have a stronger tourism sector with improved labour productivity and wages.
Various initiatives will be promoted in anticipation of the post-COVID era to reconstruct a tourism sector that supports local economies. Such initiatives include increasing repeat visitors and length of stay and creating a more profitable product.
The Go To TRAVEL campaign was launched in July 2020 to stimulate the recovery of domestic travel demand during the pandemic by offering discounts on travel prices and issuing coupons for use in travel destinations. The scheme subsidised 35% of accommodation and day trip expenses for domestic travel. In addition, visitors received a regional coupon for 15% of the cost of accommodation or day trips, which could be used in the travel destination.
The campaign led to at least 88 million guest nights in accommodation facilities, with financial support totalling at least JPY 540 billion. The economic effects of the campaign impacted widely throughout Japan, with many tourist facilities reporting that the coupons led to an increase in sales and customers.
Due to the dynamic health situation, Japan introduced various support measures designed to create an environment in which it is easy for visitors to cancel their plans. Operators who do not charge cancellation fees are compensated financially in lieu of cancellation fees. The compensation is calculated at 35% of travel costs, or 50% for travel around the New Year period.
The Go To TRAVEL campaign was suspended at the end of 2020. However, the Government is implementing a regional tourism business financial support scheme and a discount programme for districts where the pandemic has subsided. Moreover, the Nationwide Travel Support programme started in October 2022 as a measure to continue to stimulate domestic travel demand.