Travel in Japan

Japan maintains positive growth in tourism

While a low birth rate and ageing society are exerting a negative impact on the travel industry, Japan saw positive growth at the end of the review period. Rising sales were driven in part by the strong promotional activities of national and local governments and travel companies.

OTA expansion and the entry of newcomers intensify competition

The online channel continues to grow strongly in Japan, as OTAs expand and growing numbers of players look to develop online travel operations. E-commerce and video on-demand company, DMM, and communications app operator, Line, were amongst the players looking to enter the online travel market at the end of the review period.

Brand loyalty and customer experience key to growth

With competition intensifying across all areas of the travel industry, there is increasing pressure on players to provide distinctive points of differentiation and encourage brand loyalty by enhancing the customer experience. Japan Airline Corp (JAL), for example, has established the JAL Innovation Lab with the aim of utilising new technologies to increase the number of things that travellers can do onboard its aircraft, as well as successfully expanding its Dokokani Mile loyalty scheme.

The new short-term rental legislation removes many outlets but allows more companies to enter the business

While the new law regulating minpaku (a Japanese term for short-term rentals) led to a significant decline in the number of outlets in 2018, this was in large part due to the fact that owners had yet to gain the necessary permission to operate as short-term rentals. Moreover, the greater legal clarity encouraged several new companies to enter the business.

Positive outlook

Supported by significant investment in infrastructure and promotional activities from national and local government and travel companies, as well as major events including the 2019 Rugby World Cup and the 2020 Tokyo Olympics and Paralympics, the Japanese travel market is expected to see an ongoing rise in inbound tourists over the forecast period. Expanding tourism beyond the major metropolitan areas through investment in new accommodation, promotional activity and the development of new travel products such as nature-orientated tours will play a significant part in attracting new visitors and generating growing sales between 2018 and 2023.

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