Japan has fully opened its doors to visitors after more than two years of pandemic isolation.
On Tuesday, the country restored visa-free travel to dozens of countries, ending some of the world’s strictest Covid-19 border controls. Japan also lifted the entry cap of 50,000 people and ended the requirement for tourists to travel as part of tour groups, the Kyodo news agency reported.
Prime Minister Fumio Kishida is counting on tourism to help revive the economy and capitalize on the yen’s fall to its lowest level in 24 years – but hopes of a tourism boom are facing headwinds: a shortages of hospitality workers, lingering pandemic concerns and economists’ forecasts that tourist returns would be gradual.
Kishida said last week that the government aims to attract 5 billion yen ($34.5 billion) in annual tourism spending. This goal may be too ambitious for a sector that has withered during the pandemic.
Spending by foreign visitors will only reach 2.1 trillion yen by 2023 and will not exceed pre-Covid levels until 2025, economist Takahide Kiuchi wrote in a Nomura Research Institute report.
Since June, Japan has allowed tourists to visit in groups accompanied by guides, a requirement that has been further relaxed to include self-guided package tours.
Just over half a million visitors have come to Japan so far in 2022, up from a record 31.8 million in 2019.
Arata Sawa is among those keen to bring back foreign visitors, who previously accounted for up to 90% of customers at his traditional inn.
“I hope and anticipate that many foreigners will come to Japan, like before Covid,” said Sawa, the third-generation owner of the Sawanoya ryokan in Tokyo.
Airline Japan Airlines Co has seen inbound bookings triple since announcing the easing of borders, Chairman Yuji Akasaka told the Nikkei newspaper last week – but demand for international travel won’t fully recover until around 2025 .
“I don’t think there will be a sudden return to the pre-pandemic situation,” said Sawato Shindo, chairman of Amina Collection Co, a 120-store gift and souvenir chain.
Hopes of a meteoric return to tourism are also tempered by a labor shortage. Nearly 73% of hotels nationwide said they lacked regular workers in August, up from about 27% a year earlier, according to market research firm Teikoku Databank.
Akihisa Inaba, general manager of the Yokikan hot spring resort in Shizuoka, central Japan, said understaffing during the summer meant workers had to give up time off.
“Naturally, the labor shortage will become more pronounced when inbound travel returns,” Inaba said. “So I’m not sure we can be overjoyed.”
Whether foreign visitors will wear face masks and adhere to other infection controls common in Japan is another concern. Tight border controls have been widely popular for most of the pandemic, and fears remain about new virus variants emerging.
On Friday, the government approved changes to hotel regulations so operators can turn away guests who fail to meet infection controls during an outbreak.
“Since the start of the pandemic until now, we’ve only had a few foreign guests,” Tokyo innkeeper Sawa said. “Almost everyone wore masks, but I really don’t know if people visiting from here will do the same.”
One of the forces likely to favor the return of visitors is the fall in the yen: the yen has weakened sharply against the dollar, which gives some visitors much higher purchasing power and makes Japan attractive to bargain hunters targeting electronics, luxury goods and retail districts.
In Tokyo’s Akihabara electronics district, Hideyuki Abe’s shelves are filled with watches and memorabilia like samurai swords and bobble-headed toy cats. Abe employs around 50 people and had resorted to layoffs after the pandemic hit in 2020. Some stores in Akihabara have since closed, but he has bided his time.
“Holding on is where the power lies,” Abe said. “Now I’m a bit worried about a labor shortage.”
With pandemic restrictions easing and the dollar at a three-decade high of around 145 yen, he thinks tourists will be back.
“This time,” he said, “it’s a perfect opportunity.”
Reuters and Associated Press contributed to this report