Personnel shortage in the tourism industry:
Current situation and challenges

Even though tourism demand in Japan remains below pre-COVID levels, the accommodation, eating and drinking service sectors are already experiencing a growing shortage of personnel. This is because workers who left the accommodation and eating/drinking service sectors due to the COVID pandemic have not returned.

Even before the pandemic, the accommodation and eating/drinking service sectors tended to have high worker turnover rates because of the lack of holidays and vacation days and the low wage levels, which present employment challenges as they make it difficult to hire and retain personnel, as well as the harsh working environment and the fact that the sectors employ large numbers of non-permanent workers. Furthermore, in the accommodation sector, the workforce is aging, and the COVID pandemic have heightened concerns about the stability and future of the sector. There are fears that the personnel shortage could become even more serious in the future.

For the accommodation and eating/drinking service sectors to overcome the personnel shortage, they will need to fundamentally transform their approach to employment and work styles, with the aim of adding more value with fewer workers than before. Specifically, it will be important for them to 1) improve labor productivity through digitalization and DX (digital transformation), 2) stabilize employment, 3) pursue region-based initiatives, and 4) support from the national and local governments.

A full recovery in tourism demand in Japan is likely to be some way off. The sectors should view this situation as a golden opportunity to reform work styles and press ahead with action.

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