Japan

Tourism in the economy

Overall, the size of the tourism economy in Japan increased by 4% in 2016 to JPY 25.8 trillion.

The number of international visitors to Japan has risen from 6.2 million in 2011 – the year of the Great East Japan Earthquake – to 24.0 million in 2016. Consumption by international visitors increased from JPY 813 billion to JPY 3.8 trillion, during this period.

Arrivals grew by 21.8% between 2015 and 2016. Of the 20 main overseas markets, all except Russia set new visitation records. Foreign tourists from other Asian countries totalled around 20.4 million, a 22.7% increase over the previous year, accounting for 85% of the total number of foreign tourists visiting Japan.

The three top inbound markets are China, Korea and Taiwan. All have seen growth, although there has been some fluctuation in arrivals from Korea owing to the influence of the Kumamoto earthquakes in 2016.

Domestic tourism accounts for around 80% of the tourism economy in Japan. The number of Japanese people who travelled within Japan in 2016 reached 641 million, up 6% from the previous year. In 2016, the total spending on domestic travel was JPY 20.9 trillion, an increase of 2.7% over the previous year. The main drivers of domestic tourism are hot springs, fine cuisine, nature or theme parks, and visiting historically or culturally significant sites. Social media is having a considerable impact on domestic choices along with the availability of low cost flights.

Tourism governance and funding

Established as an external organ of the Ministry of Land, Infrastructure, Transport and Tourism in 2008, the Japan Tourism Agency takes a leading role in tourism policy and represents the Government on issues relating to tourism and the promotion of Japan as a tourist destination. The Japan Tourism Agency is headed by a Commissioner.

The Japan National Tourism Organisation is in charge of executing the Visit Japan Project and other marketing activities, including promotion to the MICE market. This includes attracting visitors to Japan through overseas media campaigns and exhibitions at overseas tourism fairs.

Local governments improve local tourism resources, organise events and promotions, and manage the development of human resources. The National Government offers support to boost such regional initiatives including consulting services, providing statistical data, initiating area-wide co-operation and supporting regional development initiatives.

The Japan Tourism Agency budget for 2017 is JPY 25.6 billion (more than double its 2015 budget of JPY 10.4 billion), broken down as follows: JPY 9.4 billion for policies to promote inbound tourism; JPY 8.6 billion to support the development of tourism infrastructure; JPY 2.8 billion to support the development of tourism in regions and JPY 4.6 billion to help regenerate the Tohoku region.

Japan: Organisational chart of tourism bodies
picture

Source: OECD, adapted from the Ministry of Land, Infrastructure, Transport and Tourism, 2018.

A Ministerial Council for the Promotion of Japan as a Tourism-Oriented Country was established in March 2013 to unify government efforts on tourism. A cross-ministerial budget has yielded many projects and this budgetary policy has been maintained until this year, including the International Tourism Support for Historical Landscapes subsidy. The Japan Tourism Agency plays a co-ordinating role on tourism issues with the relevant government ministries.

Tourism policies and programmes

The main factors behind the very positive growth in international arrivals in the last few years include relaxing visa restrictions and expanding the tax-free system for foreign tourists along with infrastructure improvements and better promotion.

Some of the main issues and challenges are: the creation of tourist areas of international appeal, the development of human resources for the tourism industry, and investing in additional appropriate infrastructure.

Tourism policy and planning is led by the overarching national strategy for economic growth, the Japan Revitalization Strategy 2016 – Towards the 4th Industrial Revolution. This has a target of achieving the “Biggest Post-War Goal: 600 trillion Yen GDP” by focusing on the following three challenges:

  • The strategic creation of new promising growth markets,

  • An “Industrial Revolution” to overcome the lack of workers and wage restrictions resulting from a decreasing population,

  • The development of personnel to support the new industrial framework.

With respect to new promising growth markets, 10 Public-Private Strategic Projects have been established, with the realisation of Japan as a tourism-oriented country included as one of the projects. Tourism is the trump card for regional revitalisation and is seen as a key pillar in the growth strategy.

To realise the policies to become a tourism-oriented country, a new “Tourism Nation Promotion Basic Plan” was approved by the Cabinet, defining those policies to be enacted by the entire government. The plan, which runs from 2017-2022, establishes four basic national policies:

  • The development of the private sector economy,

  • The furtherance of international mutual understanding,

  • The increased stability of civilian life,

  • Countermeasures against the risks of fires and accidents.

In addition, the government’s action plan for tourism policies in the “Tourism Vision Realisation Programs 2017” expresses more concrete policies for the coming year and moves towards realisation of that vision.

With the 2020 Tokyo Olympics/Paralympics approaching, Japan is working on various initiatives with a view to becoming a world-class tourist destination. This involves preparing additional infrastructure to accept the expected increase in foreign tourists, dispersing tourists to local areas, revitalising tourism in disaster-struck areas, and dealing with the changing needs of tourists.

Accommodation capacity is an important issue in parts of Japan. Extra capacity is being provided by new accommodation platforms, but these need regulation. In response, a Private Lodging Business Act was introduced in June 2017, which will be enforced from June 2018. This new law defines a set of rules for operating a private lodging. It provides notification and registration systems specifically for operators of private lodgings and for agencies that act as intermediaries between the guests and the operators (Box 1.19).

Statistical profile

Table 1. Japan: Domestic, inbound and outbound tourism
picture

 http://dx.doi.org/10.1787/888933640500

Table 2. Japan: Enterprises and employment in tourism
picture

 http://dx.doi.org/10.1787/888933640519

Table 3. Japan: Internal tourism consumption
Million JPY
picture

 http://dx.doi.org/10.1787/888933640538