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Chinese Tourists Step Up for Abe as Japanese Shoppers Falter

11/20/2014| 9:51:45 AM|

The yen’s slump to a seven-year low against the dollar is also broadening the country’s appeal globally and bolstering the Abe administration’s effort to double visitors by the 2020 Olympics.

When Jingyan Hou made her first trip to Japan in 1997, the office worker from Beijing spent 200,000 yen ($1,700) during a week-long stay on accommodation, meals, transport and souvenirs.

On her second visit this year, she spent that much on just one Louis Vuitton handbag in Tokyo’s Ginza shopping district.

The increasing wealth of travelers like Hou, 45, underscores the opportunity for Japan to expand its tourism industry as China’s burgeoning middle class holidays abroad. The yen’s slump to a seven-year low against the dollar is also broadening the country’s appeal globally and bolstering the Abe administration’s effort to double visitors by the 2020 Olympics.

“There’s a lot of room to boost the number of foreign tourists coming to Japan with these growing economies in our neighborhood,” said Daiki Takahashi, an economist at Dai-ichi Life Research Institute inTokyo. “They’ll have a big impact if the current trend continues.”

While Prime Minister Shinzo Abe’s growth strategy faces opposition on many fronts -- from farmers fighting tariff cuts to corporations against outsiders on their boards -- fostering tourism has few detractors. It’s a bright spot in an economy that dropped into recession last quarter as Japanese consumers cut spending after the government increased the sales tax in April to help rein in the world’s biggest debt burden.

Foreign visitors spent 1.5 trillion yen in Japan in the nine months through September, more than all of 2013, according to the Japan Tourism Agency. Money from inbound tourists is on course to surpass spending by Japanese travelers overseas next year for the first time in at least three decades, said Takahashi.

‘Stylish Products’

Hou is doing her part, spending about 1 million yen over a week in October, half of it on shopping.

“I can get more stylish products in Japan than what I can find back inChina,” she said, with shopping bags in each hand at the Mitsukoshi department store in Ginza.

Her purchases ranged from clothes and accessories to cosmetics and Pokemon figures.

Chinese tourists are now the world’s top spenders, forking out $129 billion in 2013, according to the World Tourism Organization. Some 2 million mainlanders visited Japan in the first 10 months of 2014, more than double the number from 2006, data from the Japan Tourism Agency shows.

They still have to take the top slot for visitors to Japan, remaining behind South Korea and Taiwan. In all, more than 10 million foreigners traveled to the third-largest economy last year.

Chinese tourists pack their shopping into suitcases before loading them onto a tour bus...Read More

Duty Free

While Japan has struggled after the sales-levy bump in April and the yen’s slumped 12 percent, duty free sales at Isetan (3099)Mitsukoshi Holdings Ltd.’s Ginza outlet have almost doubled compared with the same period a year ago, said Kayo Yoshida, a customer service manager at the company.

Mitsukoshi has almost tripled the number of bilingual sales assistants at its Ginza store to 21 this year and is increasing its range of duty free products, said Yoshida.

As Abe seeks to revitalize regional areas, Japan is also attracting foreign tourists to destinations outside the well trodden corridor from Tokyo to Mount Fuji and on to Kyoto.

Sakaiminato city, population of 36,000, is one of the beneficiaries. The west coast port is rebuilding some of the older infrastructure at its harbor as tourists visiting on cruise ships increase to a projected 16,000 this year.

On one day last month, 3,600 Chinese visitors disembarked from a liner, boarded 100 buses and set out sightseeing and shopping, said Tsuyoshi Furuhashi, a spokesman at the local tourism association.

Population Problem

“We need to attract tourists like this as our population declines in Japan,” Furuhashi said.

Japan lowered the minimum income requirements for Chinese nationals seeking tourist visas in 2010 and is considering extending the use of multi-entry visas to the whole country, from just Okinawa now, according to the foreign ministry.

Indian tourists became eligible for multi-entry visas for short sightseeing stays in July and waivers are in place for Indonesia, thePhilippines and Vietnam.

While Japan is well rated for customer service, transport and cultural attractions, it has a reputation for expensive accommodation.

Manryo Inc., the operator of nine hostels for foreign tourists in Tokyo and Kyoto, has found one solution for visitors trying to keep accommodation costs low.

Love Hotels

Three of its hostels are former love hotels, a common establishment near Japanese railway stations and expressway exits that rent rooms by the hour to couples seeking privacy.

Manryo’s hostel in Tokyo’s Asakusa district offers its cheapest rooms at 2,200 yen per day, versus about 5,500 yen to 10,000 yen for abusiness hotel.

“We had only 350,000 foreign tourists when Japan hosted the Olympics for the first time in 1964,” said Masataka Ota, chief consultant at Japan Tourism Marketing Co. “It’s amazing to think we may have 20 million next time.”

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TAGS: Japan | retail | Chinese tourism
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