Japan's Tourism Recovering Faster Than Expected

Despite shortfalls with in-bound long haul international markets, Japan’s tourism industry has rebounded strongly in the second half of 2011 and more rapidly than previously expected following the Tohoku Tsunami in Japan earlier this year, the World Travel & Tourism Council (WTTC) reports. In the December update - the third of four quarterly reports about Japan’s recovery- the WTTC is optimistic.

The total negative impact of the earthquake and tsunami on travel and tourism’s contribution to Japan’s GDP will be roughly ¥0.7 trillion and confined largely to 2011, less than even the most optimistic ‘low impact’ scenario produced in the immediately after the disaster, the WTTC said.

Data from the Japan National Tourism Organization and STR Global also suggest that Japanese domestic and outbound tourism has recovered ‘losses’ to levels consistent with or better than forecasts made prior to the earthquake, WTTC said.

"Due to the dominance of domestic tourism relative to inbound tourism, this implies that total Japanese Travel & Tourism demand and GDP will have recovered by the end of 2011. For the year as a whole there is a noticeable negative effect, but this should not have any lingering impact in 2012. This recovery can be attributed to the speed of the restoration of basic infrastructure immediately after the earthquake, and has been supported by the ongoing appreciation of the yen," WTTC reports.

Airline data from Japan Airlines and All Nippon Airways suggest a quicker recovery in demand for long-haul destinations than for travel to other Asian destinations, WTTC said. This is in contrast to the inbound trends and may be due to a fundamental change in the pattern of demand.

Inbound travel has yet to fully recover and for 2011 as a whole, foreign visitor arrivals are expected to be around 25 percent lower than in 2010. Arrivals continue to be in line with WTTC’s previous low impact scenario which states that international tourist arrivals will recover in numbers by early 2012, WTTC reports.

This is partly the result of growth in short-haul arrivals, by October arrivals from Hong Kong, China and Taiwan were back to, or above, October 2010 levels; and backed by strong performance in the Indian and Thai markets, although the latter has dropped off due to the severe flooding in Thailand, WTTC says.

For long-haul markets, and especially European sources, the trend over recent months also appears to have been upwards, but improvement has been slower partly due to the eurozone debt crisis as well as some residual nervousness regarding nuclear safety, the WTTC said.

David Scowsill, president and CEO, WTTC, said, “Nine months after the devastating earthquake and tsunami which hit northeast Japan, the country’s tourism industry has exceeded even the most optimistic forecasts and is well on the way to recovery. Japan has been doing a great job in particular with marketing efforts both internally and externally and has reminded the world of the unique products Japan has to offer."

"However, there is still some work to be done in attracting previous levels of international visitors, particularly from long-haul markets where there may be residual nervousness regarding the nuclear situation, and where economic strife continues," Scowsill said.

Visit www.WTTC.org

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