Japan’s tourism industry has suffered a heavy blow from the COVID-19 pandemic. The government is offering travel subsidies aimed at helping local economies that are heavily dependent on tourism, but the road back to recovery for the “Tourism Nation” is likely to be a long one. Sano Kentaro reports on the growth of Japan’s tourism industry and the new challenges that lie ahead.
Experts say that Japan is right in the middle of the second wave, and the curve is trending downward, but we are unable to see yet when the COVID-19 pandemic will end (Figure 1).
The national government, local governments and experts strive to deliver information daily, giving various warnings, and at times, requesting self-restraint. As this is going on, people’s fears and anxieties towards the pandemic are not decreasing and stress is building. Even as people are told about the new normal, new lifestyle and living “with Corona,” the current situation is one in which people must still adjust to COVID-19 measures.
Even still, residents of Japan are trying to return their lives to normal while voluntarily striving to wash their hands and gargle, avoid the 3Cs, and use masks regularly, managing to make COVID-19 measures into habits.
The government, which aims for the coexistence of economic activity and control of the spread of infections, steadily relaxed restrictions on economic activity after the state of emergency was lifted, developing promotions, such as the Go To Travel or Go To Eat promotions which aim to stimulate demand for domestic tourism. However, on the receiving side, there were some who expressed concern for infection while at the same time welcoming these promotions. Further combined with seasonal influenza through winter, there are an endless amount of worries.
It must be said that it is still difficult for economic activity and control of the spread of infections to coexist. However, the coronavirus crisis raises an alarm about the state of the economy.
The breaking story presented by the Cabinet Office (CAO) about the second quarter GDP on August 17, 2020 indicated a 7.8% decrease from the first quarter and an expectation that the GDP will see an annualized decrease of 27.8% — the worst drop since the end of the Second World War. There has also been negative growth for three consecutive quarters since the increase in consumption tax in October 2019. The impact of coronavirus has eclipsed the previously largest reduction of 17.8% in the first quarter of 2009 right after the bankruptcy of Lehman Brothers. Consumer spending, which accounts for more than half of Japan’s GDP, has decreased by 8.2% compared to the previous quarter, and this is the largest cause of the drop, according to the CAO. Spending in a wide range of fields, including leisure and dining, has dropped due to the state of emergency, requests for staying in, and requests for business closure.
Realizing a “Tourism Nation”
The Japanese government declared Japan a “Tourism Nation” in January 2003. Included in the Basic Policies for Economic and Fiscal Management and Structural Reform 2002 from the previous year was a bias towards a rejuvenation of the tourism industry: “Build out Japan, which is charming to people both within Japan and abroad, and revitalize the tourism industry,” “Promote the creation of tourist areas utilizing international public relations on unique Japanese culture, the natural environment, etc., regional features, and ingenuity,” “Foster a tourism industry of experiences and objective achievement utilizing local features, and showcase this within Japan and abroad,” and, “Ease regulations on the issuance of visas to attract tourists” (Strategy to increase the number of foreign tourists visiting Japan); “Prepare information for foreign tourists, such as guidance written in foreign languages,” and, “Foster a welcoming atmosphere for foreign tourists in tourist areas, etc.” (Strategy for hosting foreign travelers); “Support business operators planning to develop new tourist projects and support the strengthening of cooperation in industries related to tourism” (Strategy for developing the tourism industry); and “Move forward with these strategies while the public and private sectors cooperate, constantly assess the level of achievement in goals for each program, and create new strategies” (Strategy for promotion). Upon accepting the Basic Policy 2002 in December of the same year, the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) published the Global Tourism Strategy and Visit Japan Campaign policies.
These policies indicated travel spending of 20.6 trillion yen and 1.81 million new jobs as a direct result and a further 48.8 trillion yen (5.4% of the approx. 906 trillion yen in domestic production) and 3.93 million new jobs (5.9% of the total approx. 66.61 million jobs) as a ripple effect on production, all through stimulation of the domestic tourism industry. However, there were other issues related to the travel industry in Japan. In other words, the balance of international payments for travel. The number of foreign travelers to Japan in 2001 was about one-fourth the approximately 16 million Japanese travelers who went abroad, with the international travel balance being in the red at approximately 3.6 trillion yen. The Global Tourism Strategy established the goal of correcting this difference between the number of foreign travelers to Japan and the number of Japanese travelers going abroad as quickly as possible by having the number of foreign travelers to Japan reach the 8 million mark in 2007 from the approximately 4.77 million in 2001 and creating an economic ripple effect from 4 trillion yen in 2007 to 6.7 trillion yen for the time being.
The “Visit Japan Campaign,” a specific policy of the Strategy to increase the number of foreign tourists visiting Japan from the previously mentioned Basic Policy 2002, was a project to invite people through utilizing the knowledge of the private sector and through unifying the private and public sectors. The Visit Japan Campaign Headquarters was established on April 1, 2003, with the Minister of Land, Infrastructure and Transport as head. Relevant government agencies and private organizations and corporations joined, with workers from JTB, Japan Airlines, All Nippon Airways, Kinki Nippon Tourist, Japan Travel, Prince Hotel, East Japan Railway, Japan Tourism Association, and JNTO being sent to offices as implementation units, developing invitations to visit Japan and public relations from overseas offices.
The Visit Japan Campaign defined “target countries and areas” and carried out public relations campaigns to meet the characteristics of each.
Korea, Taiwan, USA, China and Hong Kong were designated as target countries and areas in 2003, with this designation expanded to the UK, Germany and France (FY2004), Thailand, Singapore, Australia and Canada (FY2005), Malaysia, India and Russia (FY2010), and Indonesia, the Philippines and Vietnam (FY2012), further expanding the number of foreign travelers to Japan.
At the same time, appropriate strategies were reexamined, and various policies were worked out to strengthen these strategies. Thanks to the “All Japan” initiative, the goal of reaching the 8 million mark in 2007 was achieved.
Abenomics of 2012
The establishment of the Second Abe Cabinet at the end of 2012 came to propel the idea of the Tourism Nation. Through the working out of the so-called Abenomics, the value of the yen was further depreciated, and with that a rapid increase in the number of foreign travelers to Japan, mainly from within Asia, began (Figures 2 and 3). This number exceed 10 million in 2013 and 19 million in 2015, reversing the number of foreign visitors to Japan and the number of Japanese people leaving Japan for the first time in forty-five years.
Following this, the original goal of 20 million visitors by 2020 was changed at the Meeting of the Council for the Development of a Tourism Vision to Support the Future of Japan in March 2016, establishing new goals to “increase the number of foreign tourists to Japan to 40 million by 2020, and to 60 million by 2030,” and to “increase the amount of money spent by foreign tourists to Japan to 8 trillion yen by 2020, and to 15 trillion by 2030.” At this meeting, Prime Minister Abe said, “Tourism is one of the major pillars of the growth strategy of Japan. It is also the trump card for regional revitalization, as well as the engine for growth towards achieving a GDP of 600 trillion yen.”
Prime Minister Abe spoke of his determination as follows.
“[…] towards building a new Japan that is a ‘tourism-oriented developed nation,’ I am determined that the Government will stand at the forefront and always proactively make the first move to take all possible measures to achieve our goals.”
He also announced a direction towards the support of repairs, implementation of explanations in foreign languages, and more for the 200 cultural properties across Japan which were the target of serious consideration for preservation, as well as the utilization of these properties as resources for tourism. Specifically, the prime minister said, “We will boldly open appealing governmental facilities for public viewing such as the Akasaka Palace State Guest House and the Kyoto State Guest House, to act as a spark for tourism. ‘Japan’s national parks,’ where abundant nature is concentrated, will be reborn as ‘national parks’ of a world standard.”
Helping with these kinds of preparations at tourist spots, the number of foreign travelers to Japan exceeded 24 million in 2016, and reached more than 31 million in 2019 (Figure 2). If we look at the travel spending of foreign travelers to Japan during this time, the 1.14 trillion yen from 2014 had expanded to 4.81 trillion yen in 2019 (Figure 4). However, if we look at the breakdown of spending per person, the spending towards entertainment and other services was only 4% on average, and this will continue to be a significant issue (Figure 5).
However, COVID-19 slammed on the breaks to this growth. The number of foreign travelers in May 2020 fell to 1,700 (estimate), recording a 99.9% decrease compared to the previous year.
People have disappeared from tourist locations throughout Japan, tourism and related industries have suffered a devastating blow, and there have been a string of bankruptcies. Even so, people involved in these industries are taking measures while continuing to wait for the day when things are restored.
The Tourism-based Country Promotion Basic Act for Japanese tourism was put into effect on January 1, 2007, and the government abolished the MLIT’s departments related to international tourism and decided to establish the new Japan Tourism Agency, which was inaugurated the following year in October 2008.
During an interview with our publication at the time, the first Commissioner, Honpo Yoshiaki, stated that he wanted travelers to learn about the value and charm of Japanese tourism and at the same time, he wanted “omotenashi,” a word that expresses the spirit of welcoming guests, to spread around the world, like “kawaii,” for example.
Tokyo Olympics bid ambassador Takigawa Christel introduced this word unexpectedly at the International Olympic Committee (IOC) general meeting in Buenos Aires held in September, 2013, and through this, the word came to be known widely around the world. The following is a part of her speech.
“We will offer you a unique welcome. In Japanese, I can describe it in one unique word: omotenashi. It means a spirit of selfless hospitality… One that dates back to our ancestors… Yet is ingrained in Japan’s ultra-modern culture.”
According to one theory, this omotenashi began with concern and consideration for guests and important people at tea ceremonies. For example, sweeping the area around the house clean, sprinkling the ground with water, garnishing the entrance way or sitting room with a blooming flower from the garden, and then waiting for the guest. Whether noticed or not, this was a spirit of and preparation for welcoming an important guest. That is, “selfless hospitality,” in a sense.
In 2018, the Japanese government laid out a course for travel to Japan through 2020, targeting the Tokyo Olympics and Paralympics. This included the promotion of further trips to Japan for repeat visitors in Asia, proposals for various travel themes responding to the needs of diverse solo travelers, and the advancement of promotions using digital marketing techniques to raise awareness of Japan as a destination for extended travel aimed at Europe, North America and Australia. However, the Tokyo Olympics and Paralympics were delayed a year in May due to COVID-19.
There is a survey of travelers to Japan from Asia, Europe, North America and Australia concerning travel to Japan conducted each year since 2012 by the Development Bank of Japan Inc. (DBJ) and the Japan Travel Bureau Foundation (JTBF). From the survey from June 2020 (presented in August of the same year), we can see that there is a strong desire to enjoy traveling abroad once COVID-19 ends: 86% from Asia and 74% from Europe, North America and Australia. Furthermore, there was a strong tendency for relatively large budgets and long stays. Of the countries and areas that respondents said they wanted to travel to, Japan was number one in Asia and number two in Europe, North America and Australia (Table).
This is because the following were rated highly both in Asia and in Europe, North America and Australia: a continuation of measures against the virus, including considerations for hygiene, cleanliness and disinfecting; shopping; food; and good public safety. However, Japan was rated lower when compared to the minimal COVID-19 damages in Taiwan, and there were many who requested improvements in access to tourist spots and tourist facilities and more reasonable prices for Japanese restaurants and lodging. Evaluation of multilingual support, still a weakness for Japan, fell further.
What we must not overlook from the results of this survey are the conditions for travelers to be able to travel abroad. That is, travel once the threat of COVID-19 has disappeared through development of antiviral drugs, etc. (32%), travel after the desired destination has been declared safe (30%) and travel after a declaration by the WHO that the pandemic has ended (28%).
Everyone awaits the day when COVID-19 will end without further delay through the efforts of every person and through international cooperation. Even if we cannot return to life as it was before COVID-19, and even if there are restrictions based on the new normal, we will want to protect our families, cherish our friendships, eat and drink together, travel and live rich lives.
In August 2020, the Director-General of the WHO said that, while it took two years for the Spanish Flu of 1918 to end, we have advanced technology and knowledge today, and surely we can end COVID-19 in a shorter time period.
We are all waiting for that time.
SANO Kentaro is a freelance writer.
Note: This article first appeared in the September/October 2020 issue of the Japan Journal.