Much More Than Mount Fuji

07.11.14 Publication:

I have often been puzzled why beautiful countries seem so indifferent about tourism. Italy is one: perhaps because it has combined a good climate, wonderful landscapes and extraordinary cultural and historical treasures for two thousand years, it has felt little need to bother about promoting itself or making visits easier for foreign tourists. Moreover Italy does receive a lot of tourists: nearly 48 million in 2013. But that remains surprisingly small compared with Europe’s (and the world’s) champion tourist destination: France, with nearly 85 million tourist visitors in 2013.

The same puzzle applies to Japan. In July I visited Hiraizumi and looked in awe and wonder at the golden temple of Konjiki-do in Chuson-ji, built a millennium ago. But I also felt awe and wonder at the fact that there were so few visitors there, and at how this amazing site is so little known outside Japan.

Perhaps, like Italy, Japan has long been so confident about its cultural heritage that it has not felt any need to advertise its assets. Yet this cannot be the whole explanation. Japan in 2013 passed the number of 10 million foreign visitors for the first time. Yet that is only one-fifth as many as Italy, and one-ninth as many as France.

Location matters, of course. Both France and Italy are in the midst of an affluent, highly populated continent, so other Europeans find it easy to visit those countries. Japan is more isolated—but then so is Britain, and it received more than 31 million tourist visitors in 2013, three times as many as Japan. Perhaps it is a bit closer to its neighbours than Japan is, but that should not be enough to explain a difference of 20 million tourists a year.

There are three bigger explanations, in my view. One is the fact that until recently, Japan’s Asian neighbours have not been affluent. But that has been changing. Another is that air travel to and from Japan has been helped less by the arrival of new low-cost carriers than is the case in Europe, where low-cost airlines now dominate the aviation business. But a third explanation is that the Japanese government has shown very little interest in promoting tourism.

We now understand that this is changing. A target has been set to expand the tourism market to 20 million visitors per year by the time of the Tokyo Olympic Games in 2020. To double tourism numbers in just six years sounds like a big achievement, though in fact the arithmetic tells another story: it would need annual rises of only 10-12% to achieve a doubling in that time. The rate of growth so far in 2014 has been faster than that.

The target really should be higher than 20 million, as the comparisons with Britain, France and Italy imply. Now that Japan has a trade deficit because of the need to import oil and gas, attracting more tourists is one good way to reduce that deficit. For although tourism means that Japan imports people temporarily, this is really an export business, as when the tourists leave their money, paid for Japanese services, stays.

So what should be done? My first answer is: do not rely on the Tokyo Olympics and the Rugby World Cup. These are big events, and will give Japan a lot of publicity. But that is all: each of them will be over after only a few weeks. Neither will provide a significant economic boost to Japan. Much longer-term thinking is required.

Instead, the task of boosting foreign tourism in Japan in a sustainable way requires three big actions. One is to change the way in which the country is advertised. The second is to give a further, deregulatory push to low-cost airlines in order to reduce the cost of travelling to Japan. The third, much harder, action is to encourage a big upgrade in the infrastructure for tourism in Japan.

There are two main problems with the way in which Japan is advertised. The first is that too little money is spent on it: the Japan National Tourism Organisation has an annual budget that is less than half the budget of the Hong Kong Tourism Board. The second is that it portrays Japan in a narrow and old-fashioned way: a land just of Mount Fuji and geishas. To expand tourism, Japan needs to convince people that it is a land of many, diverse attractions, all over the Japanese archipelago.

Improving tourism infrastructure is difficult because it is mainly a job for the private sector. Transport inside Japan is not the problem: it is outstandingly good, although quite expensive. The bigger problem lies in hotels, resorts, restaurants and tourist sites. Too many are low quality, catering chiefly to domestic group travel, and not designed to persuade the foreigners to spend money. A new quality rating system, helped by government guidelines, might help.

Most of all, the puzzle is this. Why does a country such as Japan, which as well as being beautiful also is famous for the quality of service, offer rather low-grade service to tourists? There is a great opportunity to change this.