TOKYO – A weaker yen and the sway of social media influencers has turned Japan into one of the hottest holiday destinations for Americans and Europeans.
For residents, the surge in high-spending, itinerary-hungry visitors has opened up a new income stream: experiential tours.
Former UBS Warburg securities trader-turned-DJ Laurence Takeshi Jeffers left his health-tech sales job to guide tourists through Japan’s underground sports-car scene.
Then he shifted gears to add lessons in drifting, a motorsport technique born in Japan and glamorised by the Fast & Furious movie franchise.
Meanwhile, Mr Ryota Maruoka, a 24-year-old Nagoya University student and founder of Trip Port, saw an opportunity closer to home.
Watching guides lead foreign travellers on pub crawls through Tokyo’s vibrant Shibuya, he decided to tap the nightlife economy himself.
“The first tour we offered was the bar hopping tour in Shibuya. That’s because I like drinking and I was based in Shibuya,” he said in an interview with a smile.
A record 37 million people visited Japan in 2024 – an increase of nearly 50 per cent from 2023 – and their spending hit an all-time high of 8.1 trillion yen (S$70.5 billion).
The number of visitors from North America increased by 59 per cent and from Europe by 20 per cent, compared with pre-Covid-19 levels in 2019.
This influx of foreigners exposed gaps in the tourism industry – especially in personalised experiences – opening the door for enterprising residents to build businesses that fill the demand for offbeat activities.
It comes as the nation’s tourism sector undergoes a transformative shift – evolving from mass-market sightseeing to highly personalised travel experiences, market research and consulting company Future Market Insights said in a report.
It estimated that customised travel will capture 68 per cent of Japan’s tourism market in 2025.
If inbound tourism spending reaches the Japanese government’s 2030 target of 15 trillion yen, it will become the country’s leading industry, on a par with the automotive sector, according to EY Strategy and Consulting.
It is a trend that has only accelerated in recent months, with Japan becoming a target for consumers seizing on a weak yen to fly across the world and seek out novel experiences.
That demand mixed with the low cost to start up a tour business were among the drivers that prompted Mr Kensuke Ko and his co-founder to form Yatra.
Following months of taking tourists to bars every night after clocking out from his IT job, Mr Ko had a steady stream of clients and decided to quit his day job and focus on tourism.
The company has expanded to offer tours across Japan, working with part-time guides to conduct tours every day.
“This is a very asset light business; we don’t have to invest a lot of money to do the new tours,” he said in an interview.
While Mr Jeffers was working full-time in a sales role at a health technology company, he was spending his nights and weekends taking foreigners to the Daikoku Parking Area.
It is a legendary spot for weekend and late-night meet-ups, where locals can show off their cars, many of them models built exclusively for the domestic market and rarely seen in other countries.
The 45-year-old, who built Matnero&Co’s offerings after getting his start at UBS, was inspired by a television news report about the lengths tourists would go to catch a glimpse of the cars.
The parking area is essentially a rest-stop area on a highway, which can be difficult for foreigners to access.
The business was doing so well that Mr Jeffers quit his job to do it full-time and has since added offerings like drifting lessons with his business partner and team on a racing circuit.
The business brought in about 20 million yen in sales for the three months to June, and he is optimistic it can reach 100 million yen in annual sales “pretty quickly”.
For Mr Maruoka, the 24-year-old leading Trip Port, the growing business paired with a desire to expand its offerings helped it bring on a venture capital investor who cut them a cheque in June.
The company has been spending money on bicycles to offer tours led by college students, and they offer a calligraphy class in a recently renovated space.
“We’ve been adding activities like cycling because there’s a shortage of things for foreign tourists to do,” he said.
The number of repeat visitors to Japan is likely to grow, said Mr Hiroshi Kurosu, a fellow at JTB Tourism Research & Consulting, which is important because returning tourists tend to spend money on things beyond accommodation, meals and transportation, such as activities.
“As the proportion of core repeat customers increases, so will business opportunities in areas like local cultural experiences and nature-based adventure tourism,” Mr Kurosu said. “This kind of guided tourism is currently experiencing something of a boom.”
This demand from visitors to find new and unique activities has created plenty of room for sales and upstarts with ambitions to turn side hustles into full-time businesses.
However, there is a risk that the market may turn, the yen may strengthen – or a generation that uses ChatGPT and TikTok to plan every facet of their day could find a new destination.
“A key challenge for the tourism sector is its lack of stability and future prospects,” Mr Kurosu said. “Things may seem fine now, but what will happen after 10 years?” BLOOMBERG
AloJapan.com