Swine flu slows inbound tourism for May

Figures for May tourism inbound to Japan were released on Friday on JNTO`s website – find it here.

Altogether disappointing at 34% down year on year, explained as mainly due to swine flu hitting Japan, continued slump in consumption and strong yen.   From the beginning of the calendar year through April, while huge drops in Korean visitors impacted the numbers severely, there was continued glimmering growth in visitors from certain Asian nations, in particular China, Hong Kong, Taiwan, Singapore, and Thailand – granted some of it due to seasonal effects but the April figures suggested the situation had moved into a stabilizing trend.  However, the May figures resulted from an across-the-board drop in yoy arrivals from all countries including the Asia bloc – with the one exception being continued growth from French visitors albeit a mere 1% for May.

We`ll assume the swine flu was the large majority factor for May and hope for the better as summer deals abound and the Visit Japan programme begins to produce results.   The announcement a few days ago of loosening visa restrictions for Chinese tour groups: extending the number cities from which tour groups are allowed to Japan (now only Shanghai, Beijing, and Guangdong) is a welcome move hopefully in the direction of further deregulation.  There is a lot of discussion on the pros and cons, but the government policy is gradually coming to an understanding that tourism has huge untapped potential.   Along with tourism visa deregulation, we hope the budget airline competition will be allowed to move in to the territory as quickly as possible… also likely to happen but these things take some time in Japan.

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October inbound tourism numbers mixed

Japan inbound travel took another year-on-year hit for October, 3rd month in a row now at -5.9% compared to October 2007 but year to date figures were still up 4.3% at 300,700 more visitors than 2007 and figures from four countries were at an all-time high.

See JNTO report here.

Main reasons for the decline were strong yen (especially vs the Korean won), fewer flights from many countries, continued high fuel charges, and a general slump in consumption due to global financial situation.   Visitors from Korea (-15%), USA (-14%), Australia (-10%), Canada (-8%), and UK (-8%) were affected strongest, again the rapidly strengthened yen was the most major factor.

Growth continued from Hong Kong (+42%), Singapore (+10%), Thailand (+10%), and France (+6%) inbound visitors due to the Visit Japan campaign efforts and promotion, various events, and the continued Okinawa boom.   The number of visitors from all of these countries were at all-time highs.

We expect to see increased demand from the now declining fuel charges shortly but the cost of going to Japan (due to exchange rate) from particularly Korea and Australia / NZ has risen rapidly so we expect that it may take more time for across the board growth to recover.   In the short term, growth from short-haul countries will probably increase pushing demand from Hong Kong and Singapore, and in the mid-term we expect more demand from China mainland.