Despite being closed off from tourists for the last two years, Japan has been awarded the number one spot on the Travel and Tourism Development Index by the world economic forum for the first time (up from second place in the last survey in 2019). We’ve known that Japan is the best holiday destination in the world for a long time, but it vindicating to see our long held belief proven true through this complex set of measurements and metrics.
Out of the 117 economies covered in the 2021 index, Japan ranked extremely high for its number of cultural resources as well as its infrastructure. Apart from its transport networks and rich cultural heritage, Japan also scored well on other measures, ranking 9th for health and hygiene as well as 15th for safety and security.
Some of the sectors where Japan did not rank highly include price competitiveness (96th) – although the weaker yen will certainly help increase price competitiveness – and prioritisation of travel and tourism (42nd) – perhaps due to the pandemic border closures (though a full and expedient reopening over the summer months will improve on this metric).
STATE OF THE JAPANESE TOURISM INDUSTRY
Foreign visitors to Japan reached a peak of 31.2 million people in 2019 (earning Japan $46.1 billion in tourism-related revenue). The growth in inbound visitor numbers was nothing short of sensational having increased from only 6..22 million in 2011. However, in 2020 the number of foreign visitors shrank to 4.12 million, dipping even further in 2021 to 245,900, a decrease of 99.2% across the two years (The Japan Times).
These figures would absolutely cripple the tourism industry of most countries, but luckily for Japan, its domestic tourism revenues were still a much larger share of revenue that international tourism. Even before the pandemic, many locals preferred to travel within the country, with domestic tourism totalling $21.9 trillion yen ($167 billion) in 2019, according to government-backed Japan National Tourism Agency. As such, the majority of our favourite hotels, on the ground partners and preferred service providers are still in business and keenly awaiting serving our customers once again.
Japan considers tourism a fundamental factor in its economic growth and was investing heavily in growing its international visitors to its target of 60 million visitors in 2030 (Lapresalatina). Despite a huge set-back in the last two years, results such as the below make us more confident than ever that the industry is well positioned to bounce back strongly and get back on track towards that 60 million international visitor target.