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New Series: Growing Inbound Tourism Attracting Inbound Tourists to Local Regions Current status of inbound tourism and related initiatives Kunihiko Moriya Senior Researcher Japan Travel Bureau Foundation [Date of Issue: 31/Octoer/2016 No.0260-1024]

Date of Issue: 31/October/2016

New Series: Growing Inbound Tourism
Attracting Inbound Tourists to Local Regions
Current status of inbound tourism and related initiatives

Kunihiko Moriya
Senior Researcher
Japan Travel Bureau Foundation

Tourism can be a major force in regional revitalization, and the area of inbound tourism in particular is not only currently booming but also promises further growth. The various local regions around Japan need to commit to tourism initiatives that take advantage of their respective local features.

With regional populations and economies continuing to shrink, Japan is looking to harness tourism as a means of stimulating consumption by visitors and boosting local employment. Inbound tourism (referring to non-residents or foreigners visiting Japan) is attracting particular attention even at the national level in light of its rapid growth in recent years as well as the promise of more growth to come.

Government stepping up tourism efforts

The government’s ongoing efforts to boost inbound tourism began in 2003 with the Visit Japan campaign, which included overseas promotions and development of the necessary regional infrastructure to deal with inbound tourists visiting local regions. Japan was then attracting around five million inbound tourists per annum, a figure which the government subsequently began working to increase to 10 million. That goal was reached a decade later in 2013 when 10.36 million tourists visited Japan, and since 2014, the weak yen, strong economic growth elsewhere in Asia, and policy initiatives such as relaxing visa requirements and increasing tax exemptions have triggered a real inbound tourism boom. In 2015, 19.74 million tourists came to Japan, while the total for the January-August 2016 period alone was 16.06 million, with an annual figure of 20 million now well within view.(*1)

Figre1: Trends in inbound tourism
Riding on that trend, the government drew up a new strategy in March 2016 entitled “Tourism Vision to Support the Future of Japan,” which seeks to grow tourism into a key industry and position Japan as a forerunner in international tourism. The government aims to boost the number of inbound tourists to 40 million per annum and tourist spending to eight trillion yen by 2020, and then to 60 million tourists and tourist spending of 15 trillion yen by 2030. The Tourism Vision lays out three angles and 10 reforms designed to achieve these targets, including encouraging the use of public facilities, cultural assets and national parks, revisiting old regulations, working to attract more affluent tourists and develop MICE tourism (an acronym for Meetings, Incentives, Conferences and Exhibitions that refers to a specialized niche of group tourism dedicated to planning, booking and facilitating conferences, seminars and other events), and improving Japan’s “soft” infrastructure (providing more free WiFi and facilitating credit/debit card payments, for example). These reforms have already begun, and the government is expected to continue to proceed with urgency in the years ahead.

Changing markets

Finally recovering from the impact of the Great East Japan Earthquake, the surge in inbound tourism which Japan has enjoyed since 2012 has been driven above all by the steep rise in the number of Chinese visitors. Figure 2 shows the moving annual total (MAT) through to August 2016, taking as 1 the December 2012 MATs for Korea, China, Taiwan, the United States (as the source of the most inbound tourists to Japan in North America) and the United Kingdom (as the source of the most inbound tourists from Europe).(*2) We can see that the total MAT as at August 2006 rose 2.7 times on the December 2012 level, but that the MAT for China grew 4.3 times over the same period, climbing particularly sharply since 2014.

Figre2: Rate of increase in inbound tourism by country
Not only has the number of Chinese tourists skyrocketed, but these tourists have been engaged in such massive spending as to merit a special term in Japan—bakugai, or “explosive buying.” As a result, inbound tourist spending as a whole rose around 1.7 times on the previous year in 2015 from 2.278 trillion yen to 3.4771 trillion yen.(*3) Most of that spending was on consumer electronics, cosmetics and pharmaceuticals purchased from department stores and mass retailers. In 2016, however, spending on souvenirs and other products has slackened slightly as a result of the stronger yen and slower economic growth in China and elsewhere in Asia, as well as China’s April 2016 hike in the duties levied on products purchased abroad.

Among the many inbound tourists are a growing number of repeat visitors—those coming to Japan for the second or third time. The more travel experience that repeat visitors to Japan have, the more they tend to change their travel patterns from travelling as part of a group to private travel, and from simply visiting famous spots and shopping to seeking out various experiences in the places they visit. In other words, a shift occurs from consumption of things to consumption of experiences.

Key points for local regions in attracting inbound tourism

First-time visitors to Japan tend to stick to the “Golden Route” of Tokyo, Mt. Fuji, Kyoto and Osaka, but as they gain experience, they start to travel further afield. Even in 2014, one out of two inbound tourists was visiting somewhere outside the Tokyo and Osaka metropolitan areas.(*4) If local regions approach tourism with an emphasis on their respective special features, they have every chance of benefiting from the growing number of inbound tourists expected to visit Japan in the coming years. Key points in attracting tourists will be as follows.

First, the right market needs to be identified for the particular region. Because regions can’t change as easily as products, rather than forcing the region to change, it will be important to look for the market that suits the particular region. For example, in the township of Minakami in Gunma Prefecture, a New Zealander who saw potential in the rapids of the Tone River launched a rafting operation that also offers canyoning and other activities, successfully drawing many foreigners to the area. In the process, the company has focused its efforts on the educational travel market, targeting international schools in Asia and elsewhere in the world.

Second, regions need to be true to themselves. Trying to take advantage of the current fashion does not draw customers for long, so it is important to commit to tourism initiatives that exploit unique local features, even if these take a little longer to get off the ground. For example, the Setouchi Shimanami Kaido Expressway which links Hiroshima Prefecture with Ehime Prefecture has taken as its point of difference the fact that it traverses the world’s only strait that can be crossed by bicycle. Word of the area has gradually spread among cycling lovers, and today many foreigners visit the area to enjoy a unique experience.

Third, tourism initiatives must be spearheaded by local promotion bodies. With not only many Western tourists but also a growing number of Asian visitors now travelling privately, local promotion bodies need to lead the way in developing tourist experiences that will appeal to these visitors. For example, in Tanabe City in Wakayama Prefecture, the Tanabe City Kumano Tourism Bureau has achieved great results as a gateway to the experiences offered by various local tourism operations, acting as an information point and a reservation agency for inbound tourists.

These are only a few examples of the many inbound tourism initiatives underway in local regions. Rather than simply copying other areas’ efforts, each area needs to pick out those particular elements relevant to its own circumstances and formulate a strategy tailored to its own particular capabilities.

*1. Annual figures for the number of inbound tourists as announced by the Japan National Tourism Organization (JNTO)
*2. Moving annual total (MAT): The 12-month total inclusive of the current month. For example, the December MAT is the total for the 12 months from January to December 2012, while the August 2016 MAT is the total of the 12 months from September 2015 to August 2016. MATS reveal monthly trends while excluding the impact of monthly fluctuations.
*3. According to the 2015 revised annual figures as reported in the Japan Tourism Agency’s “Consumption Trend Survey for Foreigners Visiting Japan.”
*4. According to the Japan Tourism Agency’s October 2015 “Consumption Trend Survey for Foreigners Visiting Japan Topic Analysis: Status of Visits to Local Regions by Inbound Tourists in 2014.”

(original article : Japanese)
(For the Japanese version of this article)

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