On July 1st, the Japanese yen fell to 160 yen against the US dollar, reaching a 38-year low. This significant drop in the value of the yen has attracted tourists from around the world to Japan, spurring a widespread shopping spree.
According to a report from Bloomberg, based on the latest data from the Japan National Tourism Organization, over 14.5 million people have visited Japan by May this year, marking a 70% increase compared to the same period last year. The number of tourists is expected to exceed the record-breaking 31 million visitors in 2019.
Traditionally, Japan has attracted tourists for its culinary delights, cleanliness, and traditional cultural experiences. However, the current allure of Japan is more akin to a low-cost shopping paradise, where tourists can indulge in value-for-money experiences such as omakase meals or premium A5 Wagyu beef steaks.
From March to May this year, Japan has welcomed over 3 million visitors for three consecutive months, with the majority coming from South Korea, China, and Taiwan. The number of American tourists visiting Japan in the first five months of this year has surpassed 1 million, marking a 50% increase compared to the same period in 2019. In May, visitors from the Group of Seven (G7) countries also set a new record.
Chinese tourists have been lagging behind other countries since the beginning of the year, but the gap is narrowing. Japan has emerged as the top choice for Chinese tourists this summer.
According to analysis by Bloomberg Intelligence, Japan is set to welcome a record-breaking 34 million visitors this year, surpassing the government’s short-term target one year ahead of schedule. Prime Minister Fumio Kishida’s long-term goal is to host 60 million inbound tourists annually by 2030.
In contrast, the decreased purchasing power abroad has deterred Japanese tourists from traveling overseas, with only about 60% of the peak number of outbound travelers before the pandemic.
As the number of tourists increases, so does their spending during their travels. With the weakened yen hitting its lowest level since 1986, people are opening their wallets to splurge on hotel rooms, luxury goods, and theme park tickets.
In the first quarter of this year, tourist spending reached a record high of 17.5 trillion yen. With the increasing number of Chinese tourists, this number is expected to surge further. According to data from the Japan Tourism Agency, Chinese tourists spend twice as much as the average visitor.
Hotel prices in Japan are on the rise but still remain cheaper compared to other countries. Since March, the weakened yen and the allure of cherry blossom season have driven hotel prices in Japan to a 30-year high, with the average daily room rate at around 20,986 yen (136 USD), the highest since 1997.
Hotel room rates in Tokyo are even higher, averaging 177 USD. Nevertheless, compared to cities like New York, Japan’s hotel rooms are still relatively affordable; the average nightly rate in New York exceeds 300 USD.
The surge in tourists also necessitates an increase in flight frequencies. According to a report from Bloomberg New Energy Finance (BNEF), there are approximately 37 million flights globally this year, with 1 million of these flights set to land in Japan by the end of the year. While this influx of visitors is beneficial for Japan’s economy, the spiraling increase in tourist numbers poses significant pressure on transportation and infrastructure.
If you are planning a trip to Japan soon, rest assured you won’t be alone. Tourists from around the world are joining you in the frenzy of shopping in Japan, drawn by the country’s attractive offerings.