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Prospects of Growth in the Number of Foreign Visitors to Japan:
- Total Numbers Set to Double Over Next 20 Years
as Numbers of Chinese Tourists Rise -

Janualy 13, 2006

Overview

Although the Japanese government sees international tourism as one of the key industries of the 21st century, the numbers of foreign visitors to Japan are low, both in comparison to the numbers of foreign visitors to other countries and to the numbers of Japanese nationals traveling overseas. However, since the second half of the 1990s, the numbers of foreign visitors to Japan, especially of visitors from East Asian countries, have been rising at a gentle pace. It is also likely that numbers of visitors from China, which has the world's largest population, will rise in years to come. This article attempts to forecast the numbers of foreign visitors to Japan between now and 2025 and considers the impact of the rise in visitor numbers on the Japanese economy together with the response required from central and local governments.

First, the historical experience of Japan, Korea and Taiwan suggests that as the percentage of nationals traveling overseas rises as overseas purchasing power (dollar-denominated per capita GDP) grows. It is highly likely that a similar trend will emerge in China in years to come, and as China's economic growth boosts its overseas purchasing power, it is possible to foresee a scenario in which the number of Chinese nationals traveling overseas and even the numbers of Chinese visitors to Japan rise.

Projections based on the assumption that China's overseas purchasing power continues to grow suggest that the numbers of Chinese visitors to Japan are set to increase almost tenfold from 0.67 million in 2004 to 6.17 million by 2025. As numbers of foreign visitors to Japan are currently (2004) around the 6.14 million mark, the increase in numbers from China alone will be enough to double total numbers. The boost to the economy provided by the increase in visitor numbers is likely to be of the order of ¥1.5 trillion. It is highly that the benefits to the economy will be felt, by sector, chiefly in accommodation, retail, food services, and transportation, and, by geographical area, in major conurbations rather than in provincial regions.

Given that numbers of foreign visitors to Japan are highly likely to see a sharp rise, led by an increase in numbers of Chinese tourists, the central government should set about the creation of both "hard" and "soft" infrastructure for the reception of foreign visitors as a matter of priority. To help grow the tourist industry, it is also important that regional governments identify attractions that will differentiate provincial regions from major cities and increase their appeal as tourist destinations.

For more information on the content of this report, please contact: Hideki Matsumura the Japan Research Institute, Limited.

Tel: 03-3288-4524
E-mail:Matsumura.Hideki@jri.co.jp

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