Yahoo Finance Why it feels like everyone in the world is heading to Japan right now
Tourists spent a record ¥1.75 trillion in the first quarter of the year, and that figure is likely to surge.
By: Marika Katanuma
(Bloomberg) — Japan has never seen so many tourists flood into the country so quickly.
The yen’s historic collapse, meaning a cheaper traveling experience for those with tourist dollars to spend, coupled with the post-pandemic surge in global tourism, has sparked interest in the nation like never before.
More than 14.5 million people arrived in the country in the first five months of this year, according to the Japan National Tourism Organisation’s latest figures. That’s 70 per cent up on the same period last year, and on track to beat 2019’s record 31 million visitors.
The island nation — famed for its dining, cleanliness and mix of futuristic and traditional experiences — currently feels more like a low-cost travel haven than one of the world’s most advanced economies, thanks to extraordinary currency exchange rates. The yen has been stuck at a three-decade low in recent months, making everything from an omakase sushi lunch to premium A5 wagyu steak much more affordable.
Here are six charts to unpack Japan’s unprecedented travel boom:
Lasting momentum
Japan welcomed more than 3 million visitors for a third straight month in May, with the majority coming from South Korea, China and Taiwan. More than a million Americans made the long-haul trip from the US in the first five months of the year — a 50 per cent jump on the same period in 2019.
Tourist numbers from 19 markets — including all Group of Seven nations — this year broke their records for May. Chinese tourists have lagged their global counterparts since the beginning of the year, although the gap is closing. Japan has proved to be the top pick for Chinese tourists this summer.
Based on a Bloomberg Intelligence analysis, Japan is set to receive a record 34 million visitors this year, beating by a year a government target for exceeding 2019 visitor numbers. Prime Minister Fumio Kishida has stuck by a longer-term goal of 60 million inbound visitors a year by 2030.
In contrast, a lack of overseas purchasing power has discouraged Japanese travellers, and the number heading abroad has still only reached about 60 per cent of its pre-Covid peak.
Spending surge
As the number of visitors increases, so too does the amount of cash they’re spending on their travels. The tourist dollar is going that much further thanks to the weak yen, which has slumped to the lowest level since 1986, and people haven’t been afraid of opening their wallets to snap up bargains from hotels and luxury goods to theme park trips.
Tourists spent a record ¥1.75 trillion in the first quarter of the year, and that figure is likely to surge as the number of Chinese visitors rises. They spend twice as much as the average tourist, according to the Japan Tourism Agency.
Hotel prices
Hotel prices in Japan are rising, but they’re still cheaper than their global peers.
The weak yen and the hugely popular cherry blossom season lifted national hotel prices to a near-three decade high in March. The average daily room rate was about ¥20,986 (S$177), the highest level since 1997, according to CoStar Group.
While Tokyo’s rate was higher, sitting at an average of $177 (S$240) for the year ending March 2024, the city was a bargain compared to the likes of New York, where the average room cost more than $300 a night, or Singapore, where rates exceeded $250.
Flight demand
More tourists means more transport. Some 37 million flights are scheduled to take off globally this year, according to industry data compiled by BloombergNEF. And a million of those are expected to have landed in Japan by the end of 2024. That’s not been all good news for Japan, with the spiralling number of tourists putting a major strain on local transport and infrastructure.
So, if you’re planning a trip soon, you’re certainly unlikely to be alone. But if you’re hunting for a bargain it could be the perfect moment to take that trip of a lifetime.
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