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Japan’s Inbound Tourism Boom (and the Diversity Dividend)

Japan has invariably been lauded as one of the most visited nations on the planet. Although this might sound like mere vapouring or a desperate attempt by Japan to promote her tourism sector, most of the recent travel statistics are on the affirmative. For instance, in 2017, the United Nations World Tourism Organization ranked Japan as the 12th most visited nations on earth.  Sounding good so far right. . . Read on to find out more. . .

It was during that same year that the country welcomed about 28.7 million visitors, which was 20% more than what was recorded in 2016.

The numbers keep rising. In fact, reports by the Japan National Tourism Organization indicate that during the fiscal year 2018, the number of foreign tourists shot up by 6.2 per cent, totalling 31.6 million. Earlier reports indicate that there might be a slight increase in 2019. 

Aside from winter, Hokkaido offers a high-quality life and nature in other seasons. In this piece, we will explain why investors and foreigners are moving away from land in the seas and oceans to the land on the Hokkaido mountain slopes.

According to government data, the country received 16.63 million foreign tourists during the first six months of 2019. This represented an increase of 4.6% compared to last year. In August 2019 alone, there were 2.5 million visitors, according to reports by JNTO.

If you look at previous figures, you will notice that in 2018, the country received 6 times the number of tourists it did in 2003. This is a tremendous growth that has not only made Japan the fastest-growing travel destination in the world but also boost its economy.

As a result, the Japanese government has inevitably made tourism pivotal to its growth strategy. It is so optimistic in the tourism sector that it's now setting ambitious targets for the future. For example, Japan is hoping to increase inbound tourism to 40 million visitors by 2020 (the same year the Olympic games will be hosted in Tokyo) and 60 million by 2030.

Benefits to the Economy 

While the current numbers are plausible and future projections quite ambitious, the question of how the Japanese tourism influx has helped build her economy is undeniable. While there are mixed reports regarding how tourism is affecting the Japanese economy and her GDP growth, the general consensus is that there has been significant growth.

Japan is ranked the world's 3rd largest travel and tourism economy by the World Travel & Tourism Council's (WTTC). It is estimated that JPY 40, 604.2 billion was generated by the tourism sector in 2018 and 4.6 million jobs were created. 

The Japan Tourism Agency reports that a total of ¥ 2.43 trillion was spent by international tourists by June of this year. This is 8.3% more than what was spent last year at the same time. 

According to the WTTC, 68% of the income generated in 2018 was from leisure travelers. This means that most of the foreign visitors coming to Japan are interested in leisure as opposed to business. 

Inbound Tourism boom and skiing

One of the most popular leisure activities and a huge contributor to Japan's economy is skiing. This is a winter sport that has been made popular by the famed Japow- Japan's high-quality powder snow. Most of the people who visit the ski resorts are either interested in skiing and snowboarding or just looking at the famous Japow.

Although there are over 500 ski resorts in Japan, only a few of them are popular with tourists. Some of the best resorts are located in Hokkaido with the most popular being Niseko. 

Niseko has only recently made an appearance on the skiing radar, but is now abuzz with activities as tourists from various parts of the globe treat themselves to the wonders of the white powder. 

The burgeoning ski village has attracted a lot of foreign visitors, some of whom come looking for investment opportunities. Although the national government seems to be struggling economically, Niseko seems to be doing quite well for itself. In 2017 alone, it received more than 800,000 skiing enthusiasts.

A huge percentage of skiers who visit Niseko are from China. It is believed that the number of Chinese skiers has been on the rise since Beijing was announced as the host of the 2022 Winter Olympics. As a result, the Chinese government has been aggressively promoting winter sports in preparation for the Olympics. 

The UK market has also proved to be quite valuable when it comes to skiing. According to JNTO, skiing is one of the three sectors that the Japanese government is focusing on to increase the number of tourists from the UK (The other two are wellness and cruise sectors). This has proved to be an economically prudent strategy as the number of UK tourists has been rising. For instance, Japan welcomed 333,979 UK travelers in 2018. This was 7.5% more than in 2017 and a 61% increase from 2008 when Japan received only 206,564 UK tourists. 

Most of these tourists are skiers who have significantly contributed to local economies in Japan. 

The Diversity Dividend

Even with the high numbers and tantalizing projections, the Japanese tourism sector may be taking a hit from a lack of proper diversity dividend. Although the numbers are rising every year, there is a too much overreliance on Asian countries depicting a sharp ignorance of diversity. For example, 85% of foreign travellers to Japan in 2017 were from Asia. China alone contributed 25%. Visitors from Australia, Europe, and North America accounted for only 12%, up until the first 10 months of 2018. This is excellent news for investors but Japan is looking forward to having a globally ski loving international crowd continue to enjoy the area.

This lack of diversity may be affecting such leisure activities as skiing. Most of the foreign tourists seem to be interested in the metropolitan cities of Osaka, Tokyo, and Nagoya while skiing villages don't get the same attention. However, Japan'snational tourism association and those of the specific ski towns have stepped up foreign marketing efforts to continue to capture the imaginations of the Nordic, continental, Uk European markets as well as North America. 

What ill 2019/20 season bring? We are so excited to see.

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