Perhaps one of the mild surprises among international tour and travel industry analysts over the past two to three years has been the recovery of the U.S. inbound market from Japan, which ceded its place as the Number One overseas source market for inbound tourism to the UK in 2001 and has remained Number Two ever since then.
Absent other dynamic factors (i.e., economic), it has been generally acknowledged that the Japanese market will remain a no-growth to flat-growth market because its near-zero birth rate has created a smaller source market of travelers in key demographic groups. And those who do travel have already begun to consider the U.S. a mature destination, one that does not attract as many repeat visitors as it should have.
However, Japan’s economy—the third largest national economy in the world—has been healthy of late and consumer spending has also been healthy, while the Japanese Yen has remained stable vs. the U.S. dollar (see table below—it is almost the same as it was in 2015) even as factors such as the U.S.-China trade war and instability in different areas of the world threaten national economies.
In its latest long-term forecast for the top international tourism source markets, the U.S. Department of Commerce’s National Travel and Tourism Office (NTTO), which tends to be a bit on the conservative side in its prognostications, has total inbound traffic to the U.S. from Japan increasing at a small but certain rate through 2024. If the 2024 figure is indeed achieved, it would be the highest yearly total of Japanese visitors to the United States since 2001.
The other data set from NTTO which has caused mild optimism in the inbound tour and travel industry in the U.S. are the most recent numbers from this year.
Perhaps buoyed by last month’s 10-day Golden Week and a generally good vibe over the upcoming quadrennial Olympic Games in Tokyo later this year, Japanese travelers and the agents and operators who supply them with product are unusually optimistic about the near-term outlook for overseas travel to most international regions, according to the most recent quarterly survey of the Japanese travel trade by the Japan Association of Travel Agents (JATA).
Already one of the largest tour operators in Japan, H.I.S., has acquired another travel group in Canada as it seeks to fuel overall company growth outside a stagnant market in Japan and, in doing so, inch its way toward becoming a global inbound-outbound operator.
Sociologists and demographers who’ve been studying the subject have warned us for some time what people in the inbound tourism industry have known for about a decade: Japan’s population, afflicted with the world’s lowest national birth rate, has not grown in the new millennium, and that this is beginning to affect the nation’s ability to generate new visitors or increased numbers of visitors to the U.S. (Japan is still the second-largest source market for overseas visitors to the United States, although China will soon replace it.)
From the latest quarterly Survey of Travel Market Trends by the Japan Association of Travel Agents (JATA): “There are concerns that the political and economic policy of the U.S. government will impact overseas travel. If free trade and human exchange stagnate, this might influence overseas travel from Japan negatively.” This assessment came from an unidentified retailer cited in the JATA report, which went on to say that, although overseas travel has recovered from its lowest level of two years ago, the confidence of the Japanese travel trade that business will be good declines for the last quarter of 2018 and first quarter of 2019.
