Tourists are Spending More in Japan Than Ever

Tourists are Spending More in Japan Than Ever

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Tourist spending in Japan
Pictures: bee / PIXTA(ピクスタ); Canva
Tourism to Japan is almost back to its 2019 levels - but spending is through the roof, with travelers shelling out more than ever. Find out what's driving people to give Japan their hard-earned moolah.

Travel to Japan is almost back in full swing. And consumers aren’t being shy with their yen: according to official statistics, tourists are spending more in Japan than they were even in 2019.

Tourists seek out knives (and more)

Kamata Hakensha in Taito City. (Picture: Kamata Web site)

Tourism worldwide ground to a halt in 2019. Japan, which remained cautious while the rest of the world re-opened, finally unlocked its doors in October of 2022.

For the first three months, inbound tourism was slow to rebound. But it picked up pace this year, with inbound tourists to Japan hitting over 60% of their 2019 totals by March.

Today, tourism is back to 96% of its 2019 totals. If the trend continues, Japan could not only see a full recovery but even exceed its 2019 levels.

But there’s one area where the country is already beating its 2019 records: total tourist spending.

In 2019, from April to June, tourists to Japan spent approximately 1.267 trillion yen (USD 8.363 billion) while in the country. But in the three months between July and September, they spent 1.390 trillion yen (USD 9.176 billion).

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Local companies say they’re benefiting from the uplift. Kamata Hakensha in Taito City, one of the country’s most revered knife manufacturers, says it’s setting record profits. Impressive results for a shinise shop that’s been in business for 100 years. (Also, as the owner of Kamata knives, I can see why they’re popular. I highly recommend a visit on your next trip!)

A magnificent country (with a cheap currency)

Weak yen (円安)
Picture: yakiniku / PIXTA(ピクスタ)

What explains the boom?

Partly, you can attribute it to pent-up demand. Both before and after the cessation of tourism due to public health concerns, Japan remains a popular destination for tourists worldwide.

But another driving factor is the cheap yen. Japan continues to pursue a policy of monetary easing, driving interest rates down to zero. At the same time, the US is pursuing tightening, raising interest rates in a bid to lower consumer economic costs. As a result, investors are buying USD and dumping JPY, creating the growing price disparity between the two currencies.

This is bad news if you live and work in Japan (or are thinking of doing so) and earn in yen. But it’s great news if you’re a tourist, particularly one holding USD. It means your dollar buys more yen and thus goes further.

Americans aren’t the only ones benefiting from the cheap yen, however. According to statistics, spending is most up among people from the Philippines, who’ve increased their spending by 2.18 times compared to 2019. Korean and Singaporean visitors are also spending twice their usual amount.

The extra makes up for a dip from Chinese travelers. Travel from China was only allowed recently and Chinese tourism is still only around 40% of its 2019 levels.

Mind you, the increase is still shy of the Japanese government’s aspirations. It aims to increase tourist spending to 5 trillion yen over the coming years.

The overtourism struggle

Kokedera (the Moss Temple), Saihouji, Kyoto, Japan
The “Moss Temple”, Saihouji, in Kyoto. (Picture: sonda0112 / PIXTA(ピクスタ))

Not everyone is enjoying the boom in Japanese tourism, however. Residents of tourist hot spots are complaining that it’s leading to overtourism. Symptoms of the stress include trash-strewn tourist sites and local transportation services so overwhelmed that residents say they can’t get around town.

The central government and municipalities are working to reduce the stress caused by overtourism. Proposed policies include increased rideshare services, changing transportation schedules dynamically, and opening new routes to popular spots.

Some tourist sites are also introducing ways to control the flow of visitors. Saihouji, the “moss temple” (kokedera; 苔寺) of Kyoto, charges 4000 yen for admission and requires reservation. In Yamanashi Prefecture, authorities who oversee tourism in Mt. Fuji are considering measures they can take after an overwhelming and overcrowded 2023 climbing season.

Despite the troubles, tourism to Japan likely won’t slow down any time soon. In fact, it could start setting new records as more people decide to tick a trip to Japan off of their bucket list.

Incoming JR Pass Hike Brings Consternation

Sources

東京・台東区 包丁専門店が外国人観光客に人気 インバウンド需要が回復傾向 今後の見通しは?NHK News

円安再び、151円40銭台 迫る33年ぶり水準、株・債券も安く. Asahi Shimbun

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Jay Allen

Jay is a resident of Tokyo where he works as a reporter for Unseen Japan and as a technial writer. A lifelong geek, wordsmith, and language fanatic, he has level N1 certification in the Japanese Language Proficiency Test (JLPT) and is fervently working on his Kanji Kentei Level 2 certification.

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