Foreign Tourists and Productivity of the Accommodation Industry: An empirical analysis using micro data

Author Name MORIKAWA Masayuki (Vice Chairman & Vice President, RIETI)
Creation Date/NO. May 2016 16-J-044
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The number of tourists from foreign countries and their consumption expenditure in Japan are increasing rapidly. This paper, using micro data from the Accommodation Survey (Japan Tourism Agency), empirically analyzes the effects of foreign tourists on the productivity of the accommodation industry. According to the production function estimations, an increase in the number of foreign visitors significantly improves the measured total factor productivity (TFPQ) of the accommodation industry. The effects come from both 1) the increase in the quantity of demand for accommodation services and 2) the temporal smoothing of demand fluctuations. However, the number of foreign tourists staying in accommodations differs markedly by facility: in some facilities, the number has greatly increased while many others still do not have any foreign visitors.

The English version of this paper is 17-E-106.