Inbound Tourism Boom and Beyond: Travelers exploring everyday life in Japan

Japan registered a travel surplus of about 1.1 trillion yen in 2015, marking the first black ink in 53 years. The balance of payments in tourism refers to the difference between the amount of expenditures by inbound tourists in a country (receipts) and that of its own residents on travel abroad (payments), excluding travel expenses. The fact that Japan logged a travel surplus suggests its growing competitiveness as an exporter of tourism. According to the Japan National Tourism Organization (JNTO), the number of inbound tourists increased by 47.1% to 19.7 million in 2015, outnumbering outbound tourists for the first time in 45 years. Meanwhile, the Japan Tourism Agency (JTA)'s survey found that foreign tourists spent a record 3.4 trillion yen on shopping, accommodation, meals, and so forth, up roughly 70% from 2014.

What explains Japan's booming tourist industry in recent years? The Japanese government launched its Visit Japan Campaign in 2003, which has led to a steady increase in the number of foreign visitors. But to explain the rapid increase in inbound tourists in recent years, we need to focus on developments since 2013, namely, changes in the overall economy and initiatives undertaken by the government and the private sector. A sudden depreciation of the yen in 2013 boosted expectations for a rise in the number of inbound tourists. This coincided with the government's move to relax visa rules for visitors from Southeast Asian countries and China. Other measures designed to improve the tourism infrastructure include allocating greater portions of airport capacity to international flights, increasing domestic flight routes served by low-cost carriers, and simplifying the passport inspection process for those travelling on cruise ships, which are increasingly visiting Japanese ports. Furthermore, against the backdrop of remarkable economic development, more households in Southeast Asia and China are advancing into the middle and affluent classes, and their rising income translates into greater tourism demand. In response, the Japanese government in 2014 expanded the scope of duty-free items to all general goods including consumables, prompting a rapid increase in the number of duty-free shops not only in the Tokyo metropolitan area but also in other regions across the country. These steps have improved convenience for travelers and helped them save time and money.

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