The travel and tourism industry in Japan had a stellar performance in 2024, improving on numerous records set in the previous year. This included, among others, all-time high metrics in overall market value, inbound traveler number and expenditure, and
. In doing so, it continued its growth trajectory from previous years.
Travel and tourism is a hub industry
Travel and tourism is a highly interconnected hub industry. Tourism demand directly feeds into numerous industries to various degrees, including accommodation, transportation, gastronomy, entertainment, and retail. Additionally, several satellite industries, such as outdoor goods manufacturing and wellness services, partially or fully depend on tourism. Consequently, the travel and tourism sector occupies an important position in Japan’s economy from a macroeconomic perspective. The overall impact of tourism on the economy was estimated at roughly 58 trillion Japanese yen in 2023, while tourism-related jobs accounted for about 9.1 percent of the entire labor market.
Domestic tourism is the core of Japan’s tourism industry
Domestic tourism constitutes the largest segment in Japan’s travel and tourism industry. With about 123 million inhabitants, the majority of whom belong to the middle class and have a high aptitude for travel, domestic tourism is substantial. Generated expenditure comprises roughly three-quarters of the total market value of the tourism industry. Domestic tourism generates stable and sustained demand, with hundreds of millions of trips recorded annually.
Inbound tourism is the second-largest segment and is the rising star of the industry. With sheer endless potential, initial investments have started to pay off as the government has succeeded in attracting inbound visitors. The number of inbound tourists accelerated gradually starting in 2012, setting a record every year after, except during the COVID-19 period. The segment is regarded as a driver of growth, with prospects to contribute substantially to Japan’s economic invigoration in the future.
The golden era of tourism in Japan
Japan has undoubtedly entered a golden era of tourism. Domestic travel demand is steady despite a population decline, supported by a gradual change in the lifestyle and mentality of people in Japan, who are increasingly valuing leisure over work. The unprecedented increase in inbound tourism is the main trigger for this golden age, leading to a substantial expansion of the travel and tourism market.
The future of the industry certainly looks rosy, but it also has to deal with challenges. Domestic tourism faces the looming threat of a shrinking population, which will eventually lead to reduced travel volume, while the inbound tourism segment is plagued by overtourism in especially popular places.
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AloJapan.com