Japan aims to double tourist numbers by 2020, faces 9 million gap

31 October 2016 Consultancy.uk

Getting more visitors to Japan has the potential to significantly boost its GDP, spreading benefits to its provinces if carefully managed. A new report highlights that, to attract more tourists, the country will need to reduce the perception that it is costly and will need to better support key word of mouth advertising.

Japan is home to a long, rich and deep cultural tradition, it boosts a range of historic artefacts and has wide spread natural attractions. The country faces considerable economic burdens, however, with an ageing population and continued economic mire. In recent years, a number of rule changes, as well as depreciation of the Yen, has made the country a more attractive tourist destination. Visitor numbers have, since 2010, seen 33% CAGR, providing a considerable boost to GDP.

The Japanese Government, in the face of its continued economic woes, has set targets aimed at again doubling tourist visitors by 2020. In a new article from McKinsey & Company, the consultancy firm explores the tourism industry in Japan, noting a number of factors inhibiting the influx of tourists to the country’s wide variety of sites.

The 2020 tourist gap

Meeting targets

Tourists visiting Japan stem predominantly from the East Asian market, bringing almost three quarters of the total market size in 2015 (19.7 million) at 14.2 million people. South East Asia accounted for around 2.1 million visitors, while Western countries had around 2.9 million of their citizens reach the island last year.

Natural growth, in line with recent trends, are projected to see an additional 10.9 million people by 2020, of which the largest number are from East Asia at 9.3 million. Growth in the number of people from Western countries increases only slightly by 0.6%. Current organic growth levels are not, however, sufficient to meet the government target, resulting in a 9.4 million people gap.

Attracting tourists to Japan

Unconverted potential

The report notes that Japan has considerable difficulty attracting western tourists to its shores. As it stands, a considerable number of Western tourists are aware of the country as a destination to visit, with a healthy three quarters or more from Australia, the US and the UK aware of the country, also considering a visit.

Relative to East Asian visitors, however, there is a considerable disconnect between those considering a visit, and those visiting. From the UK for instance, only 41% of those considering a visit do so, with similar numbers from the US and Australia.

Western tourist display low awareness of Japanese destinations

Converting visitors

According to the survey, a number of factors affect Westerns’ appetites for Japan as a destination. Affordability ranks highly on the mind of most tourists: from any origin, the country is perceived as expensive – with key information providers, such as booking websites, reinforcing that perception by not showing lower price available lodging.

Tourists also lack awareness of the country’s rich selection of cultural and natural sites of interest and beauty. A lack of knowledge of such sites is complicit in an additional problem faced by the country – that few people visit Japan’s provinces. The research found that 48% of visitors end up staying in three key areas, Tokyo, Kyoto, and Osaka, placing considerable pressure on resources there, while not spreading the benefit of tourism throughout the country.

Additional difficulties are faced by the country’s key advertising assets. While the country’s website is highly visited, converting website visits into wider social media buzz is not working. With its 2 million website visits per month, in line with New Zealand, it has only managed to covert around 0.4 million of them into Facebook likes, compared to 2.2 million Facebook likes for New Zealand. The lack of social media strategy, hampers key word of mouth potential that many of the people that do visit Japan have of their time there.

Website attracts visitors but converts few

Getting there

According to the report, combating the country’s image as expensive with few touristic sites of interest, would both support additional people considering the trip, as well as motivate those that decide to do so, and open up the provinces to visitors seeking a wider range of cultural and environmental interest. Increased tourist numbers in the provinces would boost regional GDP and spread the considerable benefits of tourism to the country as a whole.

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