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Packed With Tourists, Japan Returns to Economic Growth

The modest expansion in the fourth quarter of 2022 was driven by a recovery in private consumption, as well as spending by visitors.

By Ben Dooley and Hisako Ueno

Reporting from Tokyo

After more than two years under some of the world’s tightest border controls, Japan is once again open for business. Tourist spots are packed. Hotels are booked out well in advance. And it’s getting harder to get a seat at many of the country’s best restaurants.

While that hasn’t been ideal for the many people who flocked to Japan in late 2022 hoping to experience its famous hospitality, it has been pretty good for Japanese businesses.

The country’s economy, the world’s third largest after the United States and China, grew at an annualized rate of 0.6 percent from October to December, government data showed on Tuesday. The modest increase, driven by a recovery in private consumption and spending by visitors to Japan, lagged expectations that growth could reach 2 percent.

The uptick followed a surprise contraction during the third quarter of last year, when inflation and a weak yen drove import prices up and suppressed spending.

The latest quarterly result capped off a second straight year of economic growth for Japan, which has traced a slow and sometimes uneven path to recovery from the economic devastation of the coronavirus.

Japan’s economy expanded in 2022 by 1.1 percent in real terms, government data showed. That followed growth of 2.1 percent in 2021.

While Japan has now recovered the ground it lost during the pandemic, its growth lagged that of other countries, as lingering concerns about Covid continued to keep people in their homes and suppressed demand.

The return to growth in the fourth quarter was partly driven by a recovery in domestic consumption, said Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Research and Consulting.

One big reason for that is that people in Japan, with the government’s encouragement, have begun to adjust to life with the coronavirus. While deaths have shot up to their highest levels since the pandemic began, many people in Japan have let their guard down.

“The suppressed demand has steadily picked up,” Mr. Kobayashi said. That rebound has been supported by the return of popular government subsidies aimed at encouraging people to travel and eat out.

With tourists flooding back into the country, the yen’s weakness has also become a net positive for some business sectors that benefit from their return, said Saisuke Sakai, senior economist at Mizuho Research and Technologies.

Tourism has bounced back faster than expected, and “there’s revenge spending by people who have been waiting out the coronavirus,” he said, noting that the cheap yen had encouraged visitors to spend heavily on products like makeup and luxury goods.

Not all the news was good. The soft yen has continued to drive up prices for food and energy, both of which are highly import-dependent. Inflation was 4 percent in December, its highest level in over 40 years. That takes a big bite out of wages that have seen little growth for decades.

Mr. Kobayashi sees more room for the economy to expand as Chinese tourists begin to return in greater numbers. Japan has placed some restrictions on visitors from China because of concerns about the country’s surge in coronavirus cases since its “Covid zero” policy ended.

While there is some concern that the United States or Europe could enter a recession this year, Mr. Kobayashi expects that “demand will continue to lead modest growth for some time” in Japan.

Takahide Kiuchi, the executive economist at the Nomura Research Institute, said that many of his Japanese colleagues believed that Japan’s economy could expand faster than those of the United States or Europe this year, as consumption continues to rebound.

But for his part, he is less optimistic about Japan’s prospects.

“External factors may undermine the growth momentum of the Japanese economy,” he said, pointing to the uncertain economic situation abroad.

“I personally expect that the Japanese economy may fall into a mild recession in the middle of this year .”

Ben Dooley reports on Japan’s business and economy, with a special interest in social issues and the intersections between business and politics. More about Ben Dooley

Hisako Ueno has been reporting on Japanese politics, business, gender, labor and culture for The Times since 2012. She previously worked for the Tokyo bureau of The Los Angeles Times from 1999 to 2009. More about Hisako Ueno

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Japan's February GDP grows 1.8% on tourism recovery: JCER

Exports of goods and services, private consumption lead economy

TOKYO -- Japan's gross domestic product grew 1.8% in February from the previous month on a seasonally adjusted basis, according to estimates form the Japan Center for Economic Research, expanding for the first time in three months as inbound tourism gets back on track.

Based on the average figures for the first two months of 2023, the think tank now expects an annualized 3.0% contraction for the January-March quarter from the October-December period.

Thai, Malaysian outlooks improve on tourism, China recovery: JCER

Japan gdp suffers steepest decline in 5 months, 0.6%, jcer says, japan gdp up 0.1% in december despite weak exports: jcer, japan gdp shrinks 0.2% in november, hit by inflation: jcer, taiwan to surpass japan in gdp per capita this year: jcer, latest on economy, uzbekistan chases chemical hub dream with chinese polymer tech, bangladeshi 'india out' campaign hits ramadan sales, singapore q1 gdp growth ticks up to 2.7% on 'strong' tourism recovery, sponsored content, about sponsored content this content was commissioned by nikkei's global business bureau..

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Japanese economic growth surges on strong exports and tourism

The Nakamise shopping street to Sensoji temple is crowded with visitors and foreign tourists in the Asakusa district in Tokyo Japan, on July 19, 2023. Japan’s economic growth jumped at an annual pace of 6% in the April-June period, marking the third straight quarter of growth as exports and inbound tourism recovered.(Kyodo News via AP)

FILE - People walk at a pedestrian crossing in Ginza shopping district on March 31, 2023, in Tokyo. Japan’s economic growth jumped at an annual pace of 6% in the April-June period, marking the third straight quarter of growth as exports and inbound tourism recovered. (AP Photo/Eugene Hoshiko, File)

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TOKYO (AP) — Japan’s economic growth jumped at an annual pace of 6% in the April-June period, marking the third straight quarter of growth as exports and inbound tourism recovered.

Real gross domestic product, which measures the sum value of a nation’s products and services, grew 1.5% in the fiscal first quarter for the world’s third largest economy, the Cabinet Office said Tuesday.

The annualized pace shows what the growth would have been if what was marked during the quarter had continued for a year. The rate outpaced what analysts had forecast at 3.1% growth.

The latest quarter showed the strongest growth since October-December 2020, when Japan’s GDP grew 1.9% on-quarter, and 7.9% annualized rate.

Exports grew 3.2% in the three months through June, according to the government. Auto exports have grown lately, after a period in which they had stalled on the shortage of computer chips and other parts. Production was crimped because of social restrictions related to the COVID-19 pandemic.

Also contributing to quarterly growth was the return of tourism, as social restrictions eased, and borders opened to inbound travel. Tourism revenue contributes to export growth in such GDP data.

On the negative side, private consumption stalled, declining 0.5% compared to the previous quarter. Public demand, which includes government spending, rose 0.3%.

Some analysts think signs of recovery will prompt Japan’s central bank to take action on a policy change and move toward higher interest rates.

The Bank of Japan has taken a super-easy monetary policy for years, at zero or below-zero interest rates, to jumpstart an economy beset by deflation, the opposite of what the world is worried about lately, or inflation.

Deflation can be lethal, signaling stagnation. Japan has a shrinking population caused by an extremely low birth rate.

But recent data show the economy may be gradually picking up and wresting itself out of stagnation and deflation. Complicating matters is that high interest rates can make borrowing more expensive and contribute to a slowdown, just when the economy is starting to rebound.

“The data is likely to provide the Bank of Japan with more room for normalization, although the initial short-lived bounce in the Japanese yen seems to reflect some market expectations that patience from the central bank is still the likely stance,” said Yeap Jun Rong, market analyst at IG.

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Can inbound tourism fuel Japan’s economic growth?

Japan’s inbound tourism grew by 33 percent a year from 2011 to 2015—among the fastest rates in the world. Yet tourism still represents just 0.5 percent of the country’s GDP, significantly lower than for popular Asian destinations such as Thailand (10.4 percent) and developed countries such as France (2.4 percent) and the United States (1.3 percent). The biggest problems? Too few non-Asian international visitors; too many tourists concentrating on the major cities of Kyoto, Osaka, and Tokyo; and significant capacity constraints with regard to accommodation and transportation.

Japan’s leaders are aware of the problem, as well as the opportunity. Recognizing that inbound tourism could be a powerful economic engine, they have set an aspirational target to double annual inbound tourism to 40.0 million visitors in 2020, from 19.7 million in 2015, increasing total inbound-tourism revenue to ¥8.0 trillion ($79.0 billion), from ¥3.5 trillion, over the same period. Indeed, we believe the country’s tourism industry is at an inflection point where an effective strategy to attract international tourists could have an outsize impact for years to come. Our new report, The future of Japan’s tourism: Path for sustainable growth towards 2020 (PDF–2.08MB), investigates the challenges and potential impact of several initiatives that address obstacles to realizing the country’s inbound-tourism goals.

Tackling three major challenges

Although Japan is the world’s third-largest economy—trailing only the United States and China—it remains a mystery to many tourists. While hosting the 2020 Olympic and Paralympic Games will provide a global platform to showcase its people, culture, and landmarks, action is required now. For the tourism industry to overcome barriers and achieve its target of doubling annual inbound tourism by 2020, the country’s public and private sectors must come together to address three primary issues:

• The lack of non-Asian visitors. International travelers are attracted to destinations for many reasons, including iconic sites, proximity, and familiarity. Yet Japan has a significant imbalance in its portfolio of visitors: non-Asian visitors accounted for just 16 percent of international tourists to Japan in 2015. The country struggles to convert interest from Western tourists into actual visits, especially when compared with visitors from other Asian nations (exhibit). That may be partly because Western visitors simply aren’t sure what they can see in Japan, even though they profess interest in the country’s major tourism assets once informed about them.
• Skewed regional distribution. Three prefectures—Kyoto, Osaka, and Tokyo—dominate visitor itineraries, accounting for 48 percent of tourist stays. These three major cities account for 60 percent of inbound-tourism expenditures, despite comprising only 28 percent of the Japan’s GDP. This suggests a sizable opportunity for the country’s other regions.
• Capacity constraints. Accommodations and infrastructure in major Japanese cities are already stretched. In fact, demand simulations for 2020 indicate the country may face an accommodation shortage of up to 50 percent in Kyoto, Osaka, and Tokyo, as well as an air-capacity overflow of up to 30 percent for Tokyo’s Haneda and Narita airports.

Would you like to learn more about our Travel, Logistics & Transport Infrastructure Practice ?

Correcting Japan’s visitor-portfolio imbalance and skewed regional distribution requires addressing several root causes, including a perception of high cost, low awareness of tourism assets, and a limited service model in local regions. The common challenge is that cooperation between the public and private sectors in many areas—for example, aggregating tourism data and providing an end-to-end experience—is limited, if not nonexistent.

To succeed in meeting the country’s goals for inbound tourism, a public–private partnership (PPP) should be established, modeled on global best practices. Once formed, the PPP should pursue a road map built around five levers:

• Strengthen the Japanese destination-management-organization (DMO) model. Japan’s 80 DMO candidates can be expanded to deliver even greater impact, strengthening the service model in local regions.
• Build a platform to support tourists’ end-to-end customer experience. An integrated online data platform could serve as a mechanism to capture and analyze information about tourists, including purchasing behaviors and preferences. These data could be used to offer a rich, personalized customer experience.
• Support hotels and sightseeing spots in building inbound-tourism capabilities. Many hotels and tourism assets would benefit greatly from support by related businesses and government agencies to address issues such as the language barrier and inefficient purchase processes.
• Embed foreign visitors’ viewpoints in marketing and promotion. Members of the PPP, including the Japan National Tourism Organization and Japan Tourism Agency—which both employ nearly 100 percent Japanese staff—should ensure the viewpoints of tourists are sought out when designing and implementing marketing and promotions.
• Enhance online promotion to make tourists ambassadors. Japan can ensure its online portal showcases its tourism assets as effectively as possible and offers opportunities for the collection and dissemination of word-of-mouth praise.

By bringing stakeholders together through a public–private partnership, Japan can make progress in increasing its attractiveness to many different traveler segments while also addressing the underlying obstacles to growth in inbound tourism. The conditions and timing are right to launch the country into the top tier of tourism-oriented destinations—it just needs coordinated, strategic action.

How a private-sector transformation could revive Japan

Download the full report on which this article is based, The future of Japan’s tourism: Path for sustainable growth towards 2020 (PDF–2.08MB).

André Andonian is a senior partner in McKinsey’s Tokyo office , where Ryo Ishida is a consultant, Tasuku Kuwabara , is a partner, and Naomi Yamakawa is an associate partner.

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Japan Travel & Tourism Could Approach Pre-Pandemic Levels Next Year

Sector will boost national economic recovery

More than 680,000 jobs could be created over the next 10 years

London, UK: The World Travel & Tourism Council ( WTTC ) has revealed the Travel & Tourism sector in Japan will provide a significant boost to the nation’s economic recovery next year, with its GDP contribution set to reach near pre-pandemic levels.

The forecast from WTTC’s Economic Impact Report (EIR) shows the sector’s contribution to Japan’s GDP could reach nearly ¥40 trillion by the end of 2023, just 2.2% below 2019 levels.

The data also reveals employment will surpass pre-pandemic levels, recovering more than 23,000 jobs, to reach more than 5.8 million by the end of the year.

Over the next decade, Travel & Tourism’s GDP is expected to grow at an average of 2.6% annually, more than three times the 0.7% growth rate for the country’s overall economy, to reach more than ¥46.7 trillion (7.8% of the total economy).

The forecast also reveals the sector is expected to create nearly 683,000 jobs over the next decade, averaging more than 68,000 new jobs every year, to reach more than 6.2 million employed by the end of 2032.

By the end of this year, the report shows the sector’s contribution to GDP is expected to grow a staggering 60% to more than ¥36.2 trillion, amounting to 6.5% of the total economic GDP.

While employment levels in the sector are expected to grow at a slower rate (1.9%), by the end of this year, more than  5.6 million will work in the sector.

Julia Simpson, WTTC President & CEO, said: “After the pain suffered by Japan’s Travel & Tourism, the outlook for the future is much brighter.

“Following two years of restrictions to mobility, which damaged the sector, there are reasons for optimism as the sector is finally seeing the light at the end of the tunnel.

“But there is still work to be done. Removing testing and facilitating international travel will further boost the sector’s growth and fast-track the recovery.”

Before the pandemic, Japan’s Travel & Tourism sector’s contribution to GDP was 7.3% (¥40.8 trillion) in 2019, falling to just 3.5% (¥18.4 trillion) in 2020, which represented a shocking 54.8% loss.

The sector also supported 5.8 million jobs in 2019, falling to just below 5.3 million in 2020, when the pandemic devastated the sector.

The global tourism body’s latest EIR report also reveals that 2021 saw the beginning of the recovery for Japan’s Travel & Tourism sector.

Last year, its contribution to GDP climbed 22.9% year on year, to reach ¥22.7 trillion.

The sector also saw a recovery of more than 210,000 Travel & Tourism jobs, representing a positive rise of 4% to reach 5.5 million.

The sector’s contribution to the economy and employment could have been higher if it weren’t for the impact of the Omicron variant, which led to the recovery faltering around the world, with many countries reinstating severe travel restrictions.

Download the press release >

Saudi Arabia’s Travel & Tourism to Have Fastest Growth in the Middle East Over the Next Decade

South Korea’s Travel & Tourism Expected to Create Nearly Half a Million Jobs Within the Next Decade

Japan's hospitality and tourism industry is recovering, but there are challenges

Japan's readiness to receive tourists is not keeping pace with the speed of the recovery of visitor numbers. Image:  Unsplash/Sayaka Ganz

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• Japan's hospitality and tourism sector is recovering in earnest after reopening its border to foreign visitors and lifting mask rules after COVID-19.
• As a result, March saw visitor numbers reach nearly 2 million, equivalent to about two-thirds of tourist figures for the same month in 2019.
• Japan will need to adapt to avoid 'overtourism' and also address post-pandemic labour shortages in both hospitality and tourism.

The Japanese hospitality and tourism industry is beginning to recover in earnest after being badly hit by COVID-19.

In October 2022, Japan lifted the ceiling on the number of foreign tourists entering the country as well as the ban on the entry of individual foreign travellers, thereby significantly easing its pandemic border control measures. Furthermore, as of March this year, the rule to wear masks, both indoors and outdoors, is now left to individual discretion.

This was a tailwind, and the number of visitors to Japan in the same month quickly recovered to 1,827,500 – a figure is equivalent to 66% of the pre-pandemic March 2019 tally and 27.5 times higher than in March 2022.

By country/region, the largest number of visitors to Japan in March came from South Korea with 466,800 – or 79.7% of the figure for March 2019; followed by Taiwan with 278,900; the United States with 203,000, and Hong Kong with 144,900. In addition, since Japan eased travel restrictions from China on March 1, the number of travellers from the country almost doubled to 75,000 in February.

Takahide Kiuchi, Executive Economist at Nomura Research Institute, forecasts that "inbound demand for the year 2023 will be JPY 4,958 billion (about $36.7 billion), which could quickly surpass the JPY 4,813.5 billion (about $35.7 billion) inbound demand in 2019 before the COVID-19 pandemic”.

However, while Japan's economy is being revitalized in earnest by inbound consumption – boosted in part by the record low yen, which makes Japan an attractive destination for foreign tourists – the country is facing a noticeable challenge as its readiness to receive tourists is not keeping pace with the speed of the recovery in visitor numbers.

Severe labour shortages in hospitality

The hospitality and restaurant industries are in a particularly tight spot, unable to cope with the resurgence of inbound tourism.

According to a January survey released by Teikoku Databank, the percentage of companies feeling a labour shortage (non-permanent employees) amounted to 81.8% for inns and hotels and 80.4% for restaurants. Of all sectors, these two industries in particular are experiencing an outstanding labour shortage, with the percentage for inns/hotels at an all-time high.

Many in the hospitality and restaurant sectors have been forced to reduce their workforce and curtail new hiring due to closures, shorter hours and poor performance caused by the spread of COVID-19, and many employees have moved on to other jobs. The fact it is not easy to bring back staff once they have left the industry is the main reason for the serious labour shortage.

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Japanese industry has been trying to solve labour shortages by accepting foreign workers. The tourism sector has relied heavily on part-time jobs for foreign students. According to data from the Japan Student Services Organization in 2021, the hospitality and restaurant industries accounted for nearly 40% of all part-time jobs for foreign students. However, foreign student part-time workers have completely disappeared since the pandemic.

Furthermore, the depreciation of the yen, which has been progressing since the second half of last year, has significantly lowered wages in Japan from the perspective of other countries. Despite overcoming the COVID-19 crisis and embarking on a path of economic recovery, Japan is no longer attractive as a country to go to as a migrant worker, and it is no longer possible to expect to attract foreign staff .

In a bid to address the problem in hospitality, hotel operations are being reformed by using digital technology to increase efficiency. JTB, a major Japanese travel agency, has developed a platform that links its core system with digital tools such as ATMs to save labour in check-out and other operations, and is now offering the system to hotels.

Tokyu Hotels, which operates 45 hotels in Japan, has also introduced NEC's Smart Hospitality Service , which enables automatic check-in using facial recognition and QR codes, at 39 of its hotels nationwide. Users can check in by simply holding up their face to a tablet terminal at the front desk if they have registered their guest information and photo in advance – making operations more efficient.

Countermeasures against ‘overtourism’

Overtourism has long been a challenge for the Japanese travel industry, and local residents in key tourist areas have suffered from issues including crowding, traffic congestion, rubbish and noise. The ability to diversify the times and areas visited by tourists is key to preventing overtourism, while allowing the tourism industry to gain momentum for a resurgence.

According to a Japan Tourism Agency survey, most people travel on holidays, including major national holidays, and only 16.5% of travel volume occurs on weekdays , which account for 70% of the annual number of days.

As such, the government is working to diversify travel demand by increasing the amount of coupons granted for weekday travel in its nationwide travel support programme. Now that the spread of teleworking has made it feasible to combine work and travel on weekdays, the creation of new incentives, such as work holidays, could also help to balance out travel demand.

Diversification of tourist destinations is another important issue. Pre-pandemic, the occupancy rate of accommodation facilities in Osaka, Kyoto and Fukuoka – where tourists are concentrated – rose to nearly 80%, and the negative effects of overtourism were being called out.

However, in many prefectures located along the typical tourist routes for foreign visitors, the occupancy rate of accommodation facilities was less than 50%, resulting in regional differences. In the future, it will be important to bridge these regional differences by promoting Japan's diverse destinations, and to increase the number of people visiting non-representative tourist destinations by attracting repeat visitors.

Travel & Tourism Development Index 2021: Rebuilding for a Sustainable and Resilient Future

Looking to a new future for japan tourism.

The World Economic Forum’s Travel & Tourism Development Index 2021: Rebuilding for a Sustainable and Resilient Future ranked Japan first in the development index ranking due to the speed with which the travel and tourism industry has recovered from the devastation caused by the pandemic.

Assuming that the travel and tourism industry will play an important role in global economic and social development, the report emphasizes that investment in the drivers of the industry’s development will be crucial in the future.

Meanwhile, Atsushi Takahashi of JR East Japan Planning Inc sounded an alarm bell on the past Japanese approach to tourism and instead urged a new way of thinking. “We have long made decisions based on intuition, experience and assumptions. We have been making decisions for a long time without looking at data,” he said.

“The original marketing is to choose the best solution at the time from multiple hypotheses that emerge depending on how the data is viewed and interpreted. However, in the field of tourism, I feel that this is still too shallow.”

His observations stress his belief that data-based initiatives in Japan's tourism industry are also essential to solving issues facing the sector today, as well to providing new forms of tourism services altogether.

Pre-pandemic, China ranked first in the number of foreign visitors to Japan by nationality and region, accounting for a 25.6% share . Currently, there are restrictions on issuing tourist visas to Chinese nationals, but if these restrictions are lifted in the future, the number of visitors from China is expected to increase rapidly.

In addition, the Expo 2025 Osaka Kansai – which will be held for six months and centre around the theme of 'Designing Future Society for Our Lives' – is expected to attract 3.5 million foreign tourists.

With these expected surges in visitor numbers, the question will be how Japan can solve the problems facing hospitality and tourism, while also creating and providing services that place value on new forms of tourism.

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Japan-bound Statistics

Time series data-set related to Overseas Residents’ Visit to Japan can be downloaded.

Overseas Residents' Visits to Japan 08 March 2024

• According to JNTO, the estimated number of international travelers to Japan in January 2024 was 2,688,100 (at the same level as in 2019).

Overseas Residents' Visits to Japan (Estimated figures)

2,688,100 Visits

YOY　 +79.5％

January to January

1.1 Overseas Residents' Visits to Japan by month

Source : Japan National Tourism Organization (JNTO)

1.2 Overseas Residents' Visits to Japan by year　 Annual

Overseas residents' visits to japan by country and region 11 march 2024.

• Looking at the number of international travelers to Japan by country/region in January 2024, Korea had the highest number of foreign visitors at 857,000, followed by Taiwan at 492,300, and China at 415,900.

1.3 Overseas Residents' Visits to Japan by Country and Region

Source : Japan National Tourism Organization (JNTO) Figures until November 2023 are provisional. Figures up to December 2023 are estimate.

1.4 Overseas Residents' Visits to Japan by country or region, 2022　 Annual

Source : Japan National Tourism Organization (JNTO) *Provisional

1.5 Overseas Residents' Visits to Japan by Region　 Annual

Source : Japan National Tourism Organization (JNTO) Figures until 2021 are final. Figures in 2022 are provisional.

Download time series dataset .xlsx

Statistics of Overseas Residents' Visits to Japan (Historical figures/by Country/by purpose)

EXCEL formatted file/ 806kB Modified: 05 March 2024

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Japan’s economy gets boost from 25 million visitors in 2023

Japan welcomed 25 million tourists in 2023, the largest number since 2019, as a weak yen helped attract post-pandemic visitors in a boost to the nation’s fragile economy.

The return of large numbers of visitors to Japan is a positive development for an economy that shrank at the sharpest pace since the height of the pandemic in the summer. Weakness in the currency has helped boost tourists’ spending power, making Japan a much more affordable destination. The yen averaged around ¥140.5 against the dollar last year.

Spending by visitors totaled a record ¥5.3 trillion ($35.9 billion) in 2023, up by roughly 10% compared with the tally in 2019, before the pandemic, while spending per person increased by almost 34% to ¥212,000, according to the Japan Tourism Agency. Outlays by visitors came to ¥1.7 trillion in the final quarter of 2023, a 21% increase from the third quarter, a positive result for the economy as domestic demand wilts due to high prices.

"GDP (gross domestic product) will swing back to a positive reading in the fourth quarter with help from strong inbound tourism. I don’t see any factors that could slow down the tourism recovery,” said Mari Iwashita, chief market economist at Daiwa Securities. "But I’m not sure if domestic spending will recover into positive readings because there are some lingering effects of inflation on domestic consumers.”

Still, the annual number of visitors remains below the 32 million figure recorded in 2019. Inbound tourists from China, the largest group before the pandemic and the biggest spenders, also lag behind pre-COVID numbers at 2.4 million people compared with 9.6 million visitors in 2019, despite the end of Beijing’s ban on tour groups to Japan.

China has been struggling with its own gloomy economic data, while tensions also remain over Japan’s release of wastewater from its Fukushima nuclear reactor, a factor that has put people off visiting.

The largest number of visitors came from South Korea and Taiwan in 2023, with 7 million and 4 million, respectively. Singapore and the United States were also among the nations with more tourists visiting Japan than before the pandemic.

The Japanese government has set an ambitious goal for 2030 of 60 million visitors, and a target of ¥15 trillion for their spending, according to the Ministry of Economy, Trade and Industry.

It remains to be seen how Japan’s New Year’s Day earthquake will affect tourism, especially in the popular destination of Kanazawa in Ishikawa Prefecture, known for its picturesque historical districts and a castle that had to temporarily close after the quake.

Larger numbers of tourists pour money into the economy and fuel spending in Japan’s most visited regions, helping to prop up the nation’s sputtering recovery. A return to growth in the final quarter of last year may make it easier for the Bank of Japan to finally raise interest rates for the first time since 2007 in the coming months.

The central bank meets next week and is widely expected to keep its negative rate on hold for now.

In a time of both misinformation and too much information, quality journalism is more crucial than ever. By subscribing, you can help us get the story right.

Japan's Tourism Industry Taking Off 

Tourism is a growing industry in Japan, and it has the potential to contribute meaningfully to economic growth over the next decade as the country deregulates the industry, opens casinos, and welcomes foreign visitors to the Olympic Games in 2020.

Key Takeaways

• Tourism has the potential to be a positive economic influence in Japan
• The country is set to meet the government’s target of 40 million tourists by 2020
• The 2020 Olympics in Tokyo provide an opportunity for Japan to expand its tourist base beyond Asia

A decade ago, few tourists visited Japan in comparison with other international destinations. However, over the past five years, the number of tourists has increased by over 24% annually, and the number is expected to continue to rise. With the average tourist spending $1,321 in Q2 2018, tourism in total currently equates to approximately 0.8% of Japan’s gross domestic product (GDP), although the broader impact is estimated to equal about 2.2% of GDP. We believe tourism has the potential for robust growth, and as it expands, its impact on overall economic growth could be significant.

Promoting Tourism

The government has made tourism an important part of its goal to reach 600 trillion yen ($5 trillion) in nominal GDP by 2020. Over the last couple of years, the government has enacted a series of policy changes aimed at turning Japan into a “tourism-oriented country,” which include the relaxation of visa requirements and an increase in the number of low-cost air carrier routes. In 2018, a record 31 million tourists visited Japan, an 8% increase over 2017. 1 Visitors from Asian countries continue to dominate, with tourists from China, South Korea, Taiwan, Hong Kong, and Thailand accounting for 75% of total visits in November 2018.

Growth Potential

We believe tourism in Japan has ample room to grow, as the total number of visitors remains small compared to many other countries. For example, in France, the world’s top tourist destination with 87 million foreign tourists in 2017, the tourism industry accounted for 9% of GDP in 2017. Tokyo was ranked 9th in terms of international visitor spending in 2017. However, total expenditures of almost $12 billion were still substantially lower than the $17 billion tourists spent in London or Singapore.

Casino resorts could further boost tourism growth. In December 2016, the Japanese parliament approved a bill to legalize casino gambling, and in July 2018 authorized the construction of three resort casinos. The first is likely to open in 2025, and total gaming revenue from all three is expected to top $12 billion. The Asia-Pacific region has become the largest casino gambling market, with revenue in Macau reaching nearly $38 billion in 2018. 3 By comparison, gaming revenue in Las Vegas is expected to be about $6 billion in 2018.

2020 Olympic Games

The 2020 Summer Olympic Games in Tokyo are likely to be a big draw for tourists to Japan. In preparation for the games, it is estimated that Japan will spend approximately 6 trillion yen ($53 billion) on transportation infrastructure, including expanding ports, increasing airport capacity, and strengthening transportation hubs. 4

The 2020 Games will provide an opportunity to showcase Japan’s technological know-how. Plans include the creation of an Olympic robot village to help guests with directions, transportation, and translation. Japan plans to impress athletes and tourists with autonomous taxis, 5G wireless technology, and superspeed magnetic levitation trains and hopes to draw visitors from all over the world, including the U.S. and Europe. 5

An Opportunity to Benefit from Japan’s Growth

Tourism is one of many areas contributing to the recovery of Japan’s economy. For investors seeking exposure to Japan’s potential growth, consider the Hennessy Japan Fund (HJPNX/HJPIX) and the Hennessy Japan Small Cap Fund (HJPSX/HJSIX), both offering “best ideas” portfolios. The Japan Fund is comprised of globally oriented mid- to large-cap companies. The Japan Small Cap Fund invests in smaller-cap, more domestically focused companies.

Both Funds are sub-advised by Tokyo-based SPARX Asset Management. As one of the largest and most experienced independent Asia-based asset management specialists, SPARX’s “feet on the street” research team provides a significant and crucial advantage for shareholders.

• In this article:
• Japan Small Cap Fund

1. Japan National Tourism Organization.

2. International tourism, number of arrivals, The World Bank.

3. Bloomberg

4. Cooper, Chris and Matsuda, Kiyotaka. “Abe Plans $61 Billion Infrastructure Spending for Japan Revival,” Bloomberg.com, August 2, 2016.

5. Futurism.com.

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Japan is swamped with tourists. Now visitors are going off the beaten track

Tour operators are touting Japan’s less explored regions as surging visitor numbers put strain on popular sites.

Tokyo, Japan – When Paul Christie started conducting tours on Japan’s Nakasendo, an old trade route along the post towns of Nagano Prefecture’s Kiso Valley, few travellers frequented the trail.

Christie, who has lived on and off in Japan since the late 1980s, viewed the route as a great opportunity for tourists to see a more authentic side of Japan, allowing them to explore the country’s history, nature and geography on foot.

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Since taking over as CEO of tour operator Walk Japan in 2002, Christie has been on a mission to spread tourists more evenly across the archipelago.

“We’ve been doing this for 20 years and we tend to go to places that are not touristy, so we’re teasing out the interesting parts of Japan,” the United Kingdom native told Al Jazeera.

“This addresses the problems Japan is experiencing with ‘overtourism’.”

“Overtourism” was a common talking point in Japan’s tourism industry before the COVID-19 pandemic.

After eight consecutive years of inbound growth, Japan received a record 32 million visitors in 2019.

But the rising tide did not raise all boats. Most travellers flocked to the Golden Route, running from Tokyo through the Osaka-Kyoto-Kobe conurbation, putting historical districts, Shinto shrines, Buddhist temples and popular museums under strain.

Since Japan lifted its pandemic-era border restrictions in October last year, concerns about unsustainable tourism have returned.

Visitors have rushed back in droves: 2.3 million foreign tourists arrived in July, the highest figure for any month since 2019.

China’s decision last month to lift its three-year ban on group tours to Japan is expected to result in a further spike in arrivals.

In 2019, 9.2 million Chinese tourists travelled to Japan, accounting for nearly one-third of all visitors, spending 1.8 trillion yen ($12.2bn) in the process.

“Our head office is located in the centre of Kyoto and we feel there are as many tourists as before COVID,” Hiroshi Kawaguchi, the general manager at tour operator Oku Japan, told Al Jazeera.

“This is a similar situation where major sightseeing spots are overcrowded and public buses are lining up.”

Though Kawaguchi says his company’s vision is not focused on alleviating overtourism, Oku Japan’s business model is attuned to such concerns.

“The main part of our itineraries are off the beaten track,” Kawaguchi told Al Jazeera.

“More importantly, every tour we offer includes the element of community interactions… We call these experiences fureai, and this is particularly important not only for the enjoyment of clients but also the local community.”

Tour operators focused on less-explored regions also believe in the power of tourism to have a positive impact on rural communities and spur chiho-sosei, or regional revitalisation.

In 2007, Walk Japan launched the Community Project to reinvigorate two neighbouring valleys on the Kunisaki Peninsula, where the company is based.

Alongside conducting group tours in the region, Walk Japan carries out development projects, from helping local farmers cultivate rice and shiitake mushrooms, to providing English education for schoolchildren and refurbishing old buildings.

Revitalisation is “part of the company DNA,” Christie said.

“We want to provide an example of what’s possible and perhaps inspire others.”

As Japan’s population greys, many small villages are on the brink of extinction. For such communities, tourism can be a welcome and much-needed rejuvenating force.

“With the right support, some communities genuinely want [tourists] to experience their hospitality and their local lifestyles and find out about their region, as long as they aren’t overwhelmed by visitors and the quality of life isn’t degraded,” Alex Bradshaw, founder and chief consultant at travel and tourism consultancy Gotoku, told Al Jazeera.

“Even if a village doesn’t survive into the future, the fact that it’s been remembered by somebody is incredibly powerful; that people lived here and they had this lifestyle and we shared a little time together. That kind of human interaction is very important.”

Overtourism is not restricted to Japan’s urban areas.

Rural World Heritage sites, subtropical islands, popular hiking trails and national parks have also been negatively affected.

Fuji-Hakone-Izu, for example, receives nearly half of all national park visitors in Japan, owing to its proximity to Tokyo and as the site of Mount Fuji.

Michelle Lyons, founder of Point North, a specialist branding firm supporting businesses passionate about Japanese culture, is working on a campaign to spread tourism – and its economic benefits – more equitably among Japan’s 34 national parks.

“I wanted to find a way to promote all the parks as though it’s a network of destinations that are all equal to each other,” Lyons told Al Jazeera.

“And by presenting them in this way I’m hoping the more popular parks will help raise the profile of the less popular parks.”

Lyons is developing collectable pins and patches for each park and a trading card game. She wants these collectable souvenirs to showcase the individual merits of each park and serve as educational tools.

“The management of the parks is really fragmented, so it’s difficult for them to coordinate their efforts… There needs to be a series of different solutions that creates value for the unique groups involved; a blanket approach isn’t going to work,” she said.

“In terms of increasing expenditure in the parks, gift shops could play a big part in that if they’re more strategic with what they’re selling, and think about what tourists actually want and find appealing.”

Stereotypical images

It’s a common refrain in the industry that Japan does not understand how to market itself to foreign travellers but Bradshaw thinks Western media is also at fault for presenting stereotypical images of the country.

“I see how Japan is presented and I’m kind of confused by it. I just wonder what part of Japan that is, because they do rely on the kitsch, the odd side of it, or culture tropes… It’s all maid cafés, geisha, tea ceremonies and ninja,” he said.

“It would be my hope that people would find a deeper side of Japan. But I understand why that is difficult for the tourism industry as well. When you’ve got to prioritise what sells as opposed to what’s authentic and necessarily good for regional communities.”

Some areas have implemented initiatives to specifically tackle overcrowding.

Kyoto, known as Japan’s cultural capital, is set to abolish its One-Day Bus Pass for tourists, sales of which will cease in October.

Iriomote, widely feted as the most beautiful of the Ryukyu Islands, has limited the number of daily visitors to 1,200.

In Yamanashi Prefecture, the local government has considered restricting the number of hikers on Mt Fuji’s Yoshida trail if it becomes too congested.

Last month, Prime Minister Fumio Kishida announced that the government would devise nationwide countermeasures to mitigate overtourism this autumn.

Kumi Kato, a tourism professor at Wakayama and Musashino universities, said the government has made moves in the right direction – such as organising cross-ministry meetings on spreading the benefits of tourism – but there is much work to be done.

“Destination wellbeing should be the goal and benchmarking concept,” Kato told Al Jazeera.

“Promoting the night and early morning economy and secondary destinations will disperse tourism into regional areas but that alone cannot lead to successful regional tourism.”

“It’s critical that the target should be clearly set… high-end tourists, or tourists with wealth, are often talked about, but it should not be misunderstood that only wealthy tourists are valuable,” Kato added.

“Value should be added to high-quality products and authentic experiences [which will] raise visitor spending rather than increase numbers. The government does set a target stay – number of days – and spending per visitor, but strategically ‘what kind of tourists’ should be clearer.”

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Japan tackles overtourism with restrictions for some iconic sites

Mar 27, 2024 • 5 min read

From restricted capacity to increased tourist taxes, options are being considered to counter overtourism in Japan © Jon Hicks / Getty Images

Japan is set to limit visitors at some popular attractions so that sites don't suffer from overtourism. Here's what you need to know.

Japan’s enduring popularity for overseas visitors is bringing consequences as the country seeks to balance the benefits of tourism and the impact on the areas visited, particularly at iconic destinations . 

Recently, tourists have been banned from certain private streets in Kyoto ’s famous historic Gion district , traditionally home to the teahouses where geisha  (geiko) and maiko (apprentice geiko ) performers work, largely due to antisocial behaviour. Unruly tourists have even been blamed for harassing geisha, with the Japan Times  reporting that one had her kimono torn and another had a cigarette butt put in her collar.

What new policies are being considered?

New fees and restrictions have already been introduced on climbing specific trails up Mt Fuji , in order to combat overcrowding, reduce the environmental impact — including cleaning up all the trash that results from so many people on the mountain — and improve safety for everyone doing the climb. 

Kyoto is considering special tourist express bus routes, that will whisk visitors to the city’s most iconic sites in order to reduce overcrowding and improve efficiency on regular local buses, as well as to make what can be a complicated system easier for travelers. 

Higher pricing for tourists is also being considered, having largely been absent in Japan, where many of the most famous cultural attractions are surprisingly inexpensive to enter. For example, Kyoto's famous golden temple Kinkaku-ji costs ¥400 for adults, which is about US$2.50. Changing this would be controversial, and it seems more likely that there would be increases in tourist taxes in order to fund services for visitors.

What are tourist taxes used for?

Local tourist taxes, usually collected as an extra on top of payment for your hotel, are common across many parts of the world, although these are relatively low in Japan compared with, say, destinations in the US like Honolulu and San Francisco.

These aim to fund some of the local costs associated with visitors: Kyoto’s is on a sliding scale based on the price of your hotel room, from ¥200–1000 a night (about US$1–7). The city of Hatsukaichi, home to the UNESCO-listed Itsukushima-jinja , often known as Miyajima and famous for its torii gate standing in the water off the island, recently implemented a ¥100 (about US$0.60) fee to fund the preservation and management of the site.

Japan already has a ¥1000 (about US$7) tourist departure tax that you may have never noticed as part of your plane fare.

How is Japan likely to manage the problems of overtourism?

It seems unlikely that Japan will curtail its overall number of visitors because of overtourism. More likely, we’ll see more examples of capacity restrictions in specific places, like on Mt Fuji, where a certain number of people per day are allowed in.

This already happens in some cases in Japan: the famous Ghibli Museum in Tokyo and the new Ghibli Park in Nagoya both have a ticket maximum to maintain the quality of experience and to avoid overcrowding — the price for the former is just ¥1000 or about US$6.50, so it really is about capacity.

Some trains — specifically the fastest Nozomi and Mizuho Shinkansen between points west of Tokyo — are  not included as part of the Japan Rail Pass , even though the slightly slower trains like the Hikari are. There’s only a few minutes' difference in terms of travel time, but at peak times there can be a half-dozen of the faster trains for every one of the slower ones. This is done for a variety of reasons, including that the clockwork-like efficiency of the shinkansen’s busiest section leaves only the briefest times for passengers to get on and off the train, and confused tourists (often carting large luggage with them) have been known to disrupt operations. Overseas visitors are therefore concentrated into the slightly slower Hikari and much slower Kodama services instead.

A more recent change is the 2020 introduction of  the “Baggage 160” system , where travelers must reserve a space for larger pieces of luggage (over 160cm/63in in combined height, width and depth) on more popular bullet train lines or pay a carry-on fee. The change largely stemmed from the complications of visitors bringing large pieces of luggage onto trains that were not designed with large luggage storage. Japanese travelers tend not to bring large suitcases with them on trains, instead shipping them ahead to their destination via the excellent and inexpensive set of luggage delivery services like Yamato Transport , known as kuroneko  (black cat) after its ubiquitous logo of a black cat carrying a kitten in its mouth.

How will this impact on group tours?

Keep an eye out for capacity management caps or even outright bans to potentially affect group tours first. These can be very unpopular with local people, and indeed with other visitors.

A tour bus full of visitors descending all at once can change the character of a place instantly, and that’s certainly the case in a lot of the most famous Kyoto temples and shrines like Kinkaju-ji, Ryōan-ji or Kiyomizu-dera . These groups often have a reputation for behaving disrespectfully, like talking loudly in places where quiet is expected, not following rules, and getting in the way of local people and more respectful travelers.

You’re unlikely to be affected as an independent traveler, and a smart tactic is to visit at times when these groups are either still making their way from their hotels, have been packed off for lunch, or are heading back at the end of the day — and to plan to explore the less-traveled corners of this fascinating country.

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Japan's economy is emerging from a long winter. What could its wilderness years teach us?

Analysis Japan's economy is emerging from a long winter. What could its wilderness years teach us?

From the viewing gallery atop the Tokyo Skytree, the world's tallest tower, locals and tourists gather daily to gasp in awe at the vast expanse and sheer density of this vibrant city.

Once the capital of a nation that seemed unstoppable on the path to global financial domination, it has spent the past three decades flirting with almost constant recessions.

Suddenly, seemingly overnight, its fortunes appear to have changed.

In late February, the Tokyo Stock Exchange soared to a new record, finally rescaling the dizzying heights of 1989, in a time before the rot set in.

Then, a fortnight ago, it raised interest rates for the first time since 2007. For those who missed it, Japan's official interest rates now sit at the princely rate of zero per cent.

At a time when the rest of the developed world has desperately been battling the worst outbreak of inflation in half a century, with a torrid series of rate hikes that have seen living standards plummet, Japan for decades has been grappling with the opposite.

While long considered an economic outlier, in many respects it could be regarded as a trendsetter.

For years, there has been talk that China may be on the cusp of emulating the Japanese experience; a massive boom that initially helped fuel global economic growth only to implode with a long and steady slide into the economic abyss.

But Japan could provide a glimpse into the future for us all.

Has it finally overcome the long economic winter? Maybe not just yet.

Ageing pain, shrinking gain

The 1980s were known as the Decade of Greed. But it was really the decade of Japan.

Japanese investors and corporations scoured the globe, hoovering up businesses, office towers, mines and real estate as the yen soared on the back of a powerhouse manufacturing and trading tour de force.

At home, real estate prices headed into orbit. At one stage, the Imperial Palace, perched on a 3.36 square kilometre piece of land in the centre of the city, was worth more than the entire state of California.

It all peaked on New Year's Eve 1989, when Japanese stocks closed out the year at a record after a sixfold increase during the decade. And then the bubble burst, slowly at first before gathering pace.

Asset prices headed south as most other developed nations hiked interest rates to battle inflation. Investments soured and Japanese banks, having financed a global debt binge during the previous decade, began to unravel, led by the implosion of the Long Term Credit Bank of Japan.

As its economy shifted down a gear, many in the developed world shifted focus to China as the next great Asian miracle. Led by the United States, western economies, and even many Japanese firms, shifted their industrial base to mainland China to exploit a cheaper workforce and profit from a rapidly urbanising economy.

Japan's problems were heightened by its demographics. Some argue demographics are the root cause.

With almost no migration, and a developed world birthrate, Japanese society was stung by a rapidly aging and ultimately, shrinking workforce.

In that arena, as in many others, it appears to have been ahead of its time. China is now facing the exact same demographic problem. Most of the developed world, particularly those with lower immigration levels, are also looking ahead to a greying population.

Interestingly, while Japan's economy has shrunk as its population has fallen, individually, the Japanese people are better off. GDP per head is growing, as workers remain in the workforce far longer. Productivity outpaces that of many other rich nations.

This is almost the exact opposite of our experience. Australia has avoided recession since the pandemic largely due to a rapid increase in population. Individually, however, we're all worse off with per capita GDP sliding into reverse in four of the past five quarters .

Quantitative pleasing

It's impossible to overstate the significance of the Bank of Japan's recent interest rate decision.

Having battled deflation since 1999 – when it first sent interest rates to zero – its quest to vanquish constant price falls finally appears to have been won. Prices are now rising consistently for the first time in decades.

While the idea of cheaper prices sounds enticing, deflation is a disease that wreaks economic destruction. Why buy something now when it will be cheaper next week and even cheaper next month? Why not wait until next year?

But the battle has come at an enormous cost.

It was Japan in the late 1990s that pioneered the concept of Quantitative Easing, a form of money printing then considered radical by the rest of the world.

But when the Global Financial Crisis struck in 2008, America and Europe took the plunge. During the pandemic, everyone, including Australia, got on board.

It involves the central bank buying up government debt, to inject cash into the economy. So extreme was Japan that at one stage, the Bank of Japan owned most of the government bonds on issue. It was then forced to buy shares on the Tokyo Stock Exchange, to keep the stimulus rolling.

After decades of this, Japan boasts the biggest pile of debt in the developed world at a whopping 255 per cent of GDP. By contrast, Australia's gross debt sits at just 36.5 per cent of GDP .

How it unravels this will provide a masterclass for the rest of the developed world.

Even at rock bottom interest rates, almost 9 per cent of Japan's budget is spent on servicing its interest bill. So, it simply cannot afford to raise rates much further without crippling itself.

Housing and living costs. What crises?

It's difficult not to be captivated by the country and its people, given its rich history, incredible technology, stunning food and a culture that spans thousands of years.

That may help explain why Australians now are flocking to Japan even as our trade relationship has stagnated.

Once our biggest trading partner, in recent months, it has become the number one destination for Australians hitting the road.

Partly, that's due to a rapidly evolving shift in our perceptions. My parents' generation viewed Japan through the prism of war. My children's generation hold it in awe.

For all its economic woes, Japan has escaped the cost of living crisis that has swept most of the globe in the past two years. Similarly, it has avoided the housing affordability crisis that has afflicted most of the Western world.

Both issues are directly related to its aging and shrinking population. Older people spend less and save more. Fewer people take pressure off the housing market.

That's not the only positive. The shrinking workforce is also having an unexpected and beneficial impact on wages and society. Japanese are now working until much later in life with more than a third of all over-70s still in a job.

In addition, wages have begun to lift in the past 12 months with the biggest gain in 30 years finally flowing through to real wage rises.

Despite its travails, Japan remains the world's third-biggest economy and one of the globe's biggest investors, given the extent of its savings.

And like us, it has found itself wedged between China, its biggest trading partner, and America, its greatest ally.

Handling that delicate diplomatic issue all while forging a path back to prosperity will be no easy task. But it could be Japan that paves the way.

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Japan had a vibrant economy. Then it fell into a slump for 30 years.

Molly Messick

Emma Peaslee

Last month, Japan's central bank raised interest rates for the first time in 17 years. That is a really big deal, because it means that one of the spookiest stories in modern economics might finally have an ending.

Back in the 1980s, Japan performed something of an economic miracle. It transformed itself into the number two economy in the world. From Walkmans to Toyotas, the U.S. was awash in Japanese imports. And Japanese companies went on a spending spree. Sony bought up Columbia Pictures. Mitsubishi became the new majority owners of Rockefeller Center.

But in the early 1990s, it all came to a sudden halt. Japan went from being one of the fastest growing countries in the world to one of the slowest. And this economic stagnation went on and on and on. For decades.

On this episode, the unnerving story of Japan's Lost Decades: How did one of the most advanced economies in the world just fall down one day — and not be able to get up? Japan's predicament changed our understanding of what can go wrong in a modern economy. And gave us some new tools to try and deal with it.

The Indicator from Planet Money

What japan's "lost decade" teaches us about recessions.

This episode was hosted by Jeff Guo. It was produced by Emma Peaslee and engineered by Cena Loffredo. It was edited by Molly Messick. Alex Goldmark is Planet Money's executive producer.

Help support Planet Money and get bonus episodes by subscribing to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoney .

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Tourism's contribution to Indonesia's GDP can grow higher

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily - Kontribusi pariwisata terhadap PDB Indonesia berpeluang tumbuh lebih tinggi

19 May 2022

Jakarta – The tourism sector’s contribution to Indonesia’s gross domestic product (GDP) is still low at only 5%. The contribution is lower than other G20 countries such as Spain (14%), Italy (13%), Turkey (11%), as well as an ASEAN country Thailand (12%). To increase the contribution, more promotions, access repairs, and affordability are required.

Tiket.com CEO George Hendrata explained that digital economy in the ASEAN area reached around US$100 billion based on the data from Google and Temasek. From the amount, around 30% to 40% is contributed by travel. From the 30-40%, around 30% is from Indonesia. This shows that Indonesia is a large country, and it is expected to receive 16 million tourists this year.

“Our tourism’s GDP contribution is at 5%. So, there is a chance to match Malaysia and Singapore [with tourism] contributing around 10-12%. Moreover, we can also be like Thailand, Spain, and Italy,” George said during the Fortune Indonesia Summit (FIS) 2022 event held by IDN Media in Jakarta on Wednesday (18/5/2022).

According to George, there are at least three crucial keys to increase tourism’s contribution to the GDP. The first is attraction, as Indonesia has 17 thousand islands that can promote new locations. He explained that his company held workshops for local operators to show what can be exposed so that people know what can be seen or which location is suitable for photography.

“We have a responsibility to share how beautiful our tourism is with Labuan Bajo and Raja Ampat. This must be implemented continuously so that the places will keep on being visited by international or domestic tourists in the future,” George said.

The second is accessibility. He explained that Tiket.com was always observing the flight traffic data. So, they can provide an input on where maybe a new airport is required or where an airport needs to be renovated. 

The third is affordability. Tiket.com will try to secure as many suppliers as possible so that their prices are affordable for travellers. “We want to [increase our contribution to the GDP] faster. We carry out [efforts] with related ministries. We also have an inter-intern program with the Ministry of Tourism and Creative Economy so that we can learn from each other,” he stated.

During the occasion, Tourism and Creative Economy Minister Sandiaga Uno, in his video, explained that the creative economy was slowly but surely becoming the backbone of the national economy after the Covid-19 pandemic. This is because the sector is the most enduring since the Covid-19 pandemic occurred at the start of 2020.

“The potential is increasing because this is the sector that has been proven to endure every dynamic, including the global Covid-19 pandemic,” he stated.

Sandi revealed that, based on the forecast data from the strategic study deputy of the Tourism and Creative Economy Ministry, the creative economy contributed Rp1,273 trillion to Indonesia’s GDP throughout 2021. “Our advantage and potential in the creative economy sector makes us optimistic about the industry becoming a new economic driver in Indonesia in the future and collaborating with other sectors,” he stated.

Meanwhile, Trade Minister Muhammad Lutfi explained that the economy and the global trade was still uncertain due to a multidimensional crisis. IMF, in April 2022, corrected the global economic growth to 3.6% or by 0.8% compared to the forecast in January.

The global food and energy crisis is one of the reasons why the economic growth is slowing down. Inflation in several countries is growing uncontrollably. “However, we must be grateful as, in the first quarter of 2022, Indonesia’s economy grew 5.01% compared to last year,” he said.

The Trade Minister explained that Indonesia’s inflation from January to April 2020 was quite low at 2.1%. Indonesia’s trade balance performance continues its surplus trend for 24 months in a row. The surplus from January to April 2020 reached US$16.89 billion, sustained by the surplus from oil and gas export that reached US$24.6 billion. Lutfi explained that, amid the various challenges and complexities, Indonesia’s trade currently needed several stakeholder platforms that can synergise Indonesia’s potential in the future.

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Julian Smith

Director, PwC Indonesia

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Agung Wiryawan

Partner, PwC Indonesia

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Travel, Tourism & Hospitality

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Economic impact of tourism on output in Japan 2012-2021

Economic impact of tourism on output in japan from 2012 to 2021 (in trillion japanese yen).

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August 2023

2012 to 2021

100 Japanese yen equal 0.69 U.S. dollars or 0.63 euros as of September 2023. Values have been rounded. Figures prior to 2020 come from previous reports.

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Number of hotels and inns in Japan FY 2006-2023

Tourism expenditure of international visitors in Japan 2010-2023

Tourism expenditure by domestic travelers in Japan 2013-2022

Number of Japanese overseas travelers 2013-2022

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