According to Reuters news agency, the number of tourists to Japan in July increased to the highest level since the Covid-19 pandemic.
Official data released on August 16 showed that the weak yen has helped boost tourism and contributed to Japan's economic growth.
The number of foreign visitors for business and leisure reached 2.32 million in July, up 12% from the previous month, according to the Japan National Tourism Organization (JNTO).
However, the number of arrivals in July was still 22% lower than in July 2019, before the Covid-19 pandemic broke out.
Tourists are flocking to Japan, taking advantage of a slide in the yen that has made vacations the cheapest in decades. The number of visitors from the United States, Europe, Australia and the Middle East is already above pre-pandemic levels, JNTO data shows. The industry is expected to rebound after China lifted restrictions on group travel to Japan this month, unleashing what has been Japan’s largest and most-spending tourist market ever.
Tourism has become a key pillar of Japan's economic growth plans over the past decade.
Tourists bring revenue to struggling regions as young people flock to big cities, and full flights to Japan are helping the economy avoid recession.
Tourism spending in cities and regional attractions combined with chronic labor shortages are also supporting the wage and price gains that Bank of Japan (BoJ) Governor Kazuo Ueda wants to see before he can consider changing his stimulus policy.
In addition, three-quarters of hotels said they were short of full-time workers in April, the highest among all industries surveyed, according to a report released in March by Teikoku Data Bank. About 85% of restaurants said they did not have enough part-time workers, which experts say will be a factor in rising service prices and wages.
“Tourism contributed about 0.8% of GDP in 2019, so its contribution to economic growth in a few quarters will be significant,” said CLSA Japan strategist Nicholas Smith.
Japan welcomed a record 32 million visitors in 2019 and Prime Minister Fumio Kishida is hoping the industry's revival will add 5 trillion yen ($34.4 billion) a year to the economy.
Tourism to Japan has been virtually at a standstill for more than two years due to the Covid-19 pandemic, but arrivals have steadily increased since the government resumed visa exemptions for many countries and lifted all Covid-19 control measures in May.
More than 13 million tourists visited Japan in the past seven months, and an increase in international flights helped boost arrivals in July 2023, JNTO said.
Visitors from mainland China rose to 313,300 in July 2023, up 45% from the previous month, although still well below 2019 figures.
The return of Chinese tourists will significantly boost tourist spending, which accounted for 37% of total domestic tourism spending before the pandemic in 2019, according to the Japan Tourism Agency.
Chinese tourists are helping boost cosmetics sales this summer at department store operators such as Isetan Mitsukoshi Holdings 3099.T and Takashimaya 8233.T, although not yet at pre-pandemic levels, according to Jefferies analyst Mitsuko Miyasako.
Experts say the positive impact of ending the ban on Chinese group tours could start to show up in late September, around China's National Day.
Minh Hoa (t/h)
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