Chapter

4Part Ⅱ
Part ⅢPart Ⅳ

The COVID-19 pandemic had an unprecedented impact on both the economy
and people’s flow, its effects on Japan being even more profound than thoseof the 2008 Global Financial Crisis or the 2011 Great East Japan Earthquake.
Countries around the world imposed strict border enforcement measures tolimit the spread of the virus, which also led to severe restrictions on people’s
flow. Despite experiencing steady growth prior to the COVID-19 outbreak, inbound tourism demand in Japan in general and Kansai in particular has virtually
evaporated due to the disruptions in both international and domestic travel, andprospects for recovery are not yet in sight.
In last year’s Economic Outlook (Chapter 4, Section 1) we argued that “although
the current COVID-19 pandemic has caused a crisis in inbound tourism, it also
provides an opportunity to review past strategies and reshape the tourism industry into a more sustainable one.” In other words, inbound tourism must transition from its volume-driven mindset to a more sustainable one. With that inmind, this year’s Economic Outlook will shed light on the realities that underpin
the inbound tourism industry and its strategies.
This chapter is structured as follows. In Section 1, we take a look at key statistics
in order to analyze how the absence of inbound tourism demand has affected
the economy. In Section 2, we discuss the findings of a survey targeting the tourism departments of the Kansai prefectures. Thus, we identify the main issues
that DMOs (Destination Management/Marketing Organizations) are facing interms of inbound tourism strategy, and shed light on their role in regional tourism. In Section 3 we focus on DMOs in the Kansai prefectures, summarizing
their activities and policies, and examining their characteristics from multiple
perspectives. Section 4 provides a quantitative overview of the tourism industry in Japan based on the travel and tourism satellite accounts. In addition, we
conduct an original analysis of the tourism industry using the extended 2017
Input-Output table. We clarify the position of the tourism industry in the national
economy in terms of the employment and income it generates, and of its impact
on other industries.

Part Ⅰ

Inbound Tourism in Kansai: A FY
2020 Retrospective and Outlook

200

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook

Lastly, in Section 5, we conduct an inter-industry relationship analysis of thepandemic impacts on the tourism industry in 2020. We estimate the decrease in
consumption by foreign visitors as well as the decline in domestic travel, including the ripple effect of the “Go To” travel campaign.

Section 1
A FY 2020 Retrospective: The COVID-19
Pandemic and Its Impact on Each Prefecture
INADA, Yoshihisa; NOMURA, Ryosuke; OSHIMA, Hisanori

1. Introduction
In this section we will first review the state of the tourism industry, therein including inbound tourism, which was severely hit by the COVID-19 pandemic.
Subsection 2 examines inbound tourism-related trends for 2020 and 2021, while
Subsection 3 examines domestic tourism trends. In addition, we discuss the
economic effects of anti-COVID-19 measures. Lastly, in Subsection 4 we review
the analytical perspectives required by future inbound tourism strategies as apreparatory step toward the analysis in the next section.

2. Trends in inbound tourism
In this subsection we provide a timeline of the border enforcement measures
imposed by the Japanese government starting with 2020, which affected mainly
foreign travelers. Then, we analyze the impact of these measures on the numberof foreign visitors (including the number of foreign arrivals at Kansai International Airport, hereinafter referred to as KIX), and on travel consumption.
(1) Border enforcement measures in Japan
Table 4-1-1 shows the chronology of Japan’s border enforcement measures targeting foreigners since 2020. Hubei (China) was the first province to be added
to Japan’s entry ban list on February 1, 2020, after the first reports of COVID-19
infections had emerged. It was soon followed by other regions in Asia, and thenEurope. By August 30, 2020 the entry ban list covered 159 regions and countries. This led to an almost complete disappearance of foreign visitors and inbound tourism demand.
While strict border control is still the norm, starting with the second halfSection 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture

Feb 1, 2020

Border enforcement measure
An entry ban is imposed on travelers from Hubei Province, China.

Jul 29The Residence Track framework is implemented in collaboration withThailand and Vietnam.

Aug 30Japan expands the entry ban list from 146 to 159 countries.

Sep 1

Resident card holders are allowed re-entry.

Sep 8

Cambodia, Taiwan, Malaysia, Myanmar, and Laos are added to the
Residence Track framework.

Sep 18The Business Track framework is implemented in collaboration with
Singapore.

Sep 30Singapore is added to the Residence Track framework.

Oct 1

New entry permits can be issued for medium and long-term residents
such as employees and foreign students, provided that their respective companies/institutions can guarantee they respect the quarantine
measures.

Nov 1

Japan removes the following territories/countries from the entry ban list:
Australia, South Korea, Singapore, Thailand, Taiwan, China (including
Hong Kong and Macau), New Zealand, Brunei, and Vietnam.
Vietnam is added to the Business Track framework.

Dec 28Japan decides to temporarily ban new entry for all foreign nationals.

Jan 14, 2021

The Business Track and Residence Track frameworks are suspended.

Part Ⅰ

Implementation date

Border enforcement measures

Part Ⅱ

Table 4-1-1

2011) The Residence Track framework, despite allowing entry for citizens from certain partnercountries, does not exclude them from the two week-long self-isolation period. This system
is mainly for long-term residents such as expatriate staff.
2) The Business Track entrants are allowed to conduct business activities within a limited
scope during the 14-day self-isolation period under certain conditions such as submitting a“Schedule of Activities in Japan.” This system is mainly for short-term business travelers.

Part Ⅳof 2020 some measures were relaxed, mainly for exchange students and business travelers. On July 29, 2020 the government announced the implementationof a “Residence Track” framework1) targeting long-term residents from Thailand and Vietnam, where the epidemiological situation had stabilized. Startingon September 1, 2020, resident card holders were allowed re-entry. In addition,
during the same month, Singapore was added to the aforementioned Residence
Track scheme, while a “Business Track” framework2) was introduced for shortterm residents. Since October 1, 2020, it has been possible to issue new entry
permits for employees of companies and organizations that can guarantee quarantine measures, such as 14 days of self-isolation, and on November 1, 2020
entry restrictions for business travelers from Singapore, Thailand, and South
Korea were lifted under certain conditions. Despite some requirements suchas self-isolating and refraining from using public transportation for 14 days afterPart Ⅲ

Source: Prepared based on press releases by the Ministry of Justice, and the Ministry of Foreign Affairs.

202

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook

entering Japan, quarantine measures at arrival or departure have been relaxed.
Despite gradually lifting the border restrictions, starting with December 29,
2020 the government decided to suspend new entries for all foreign nationals
due to the worsening epidemiological situation around the world. Moreover, as
the virus continued to spread, a new state of emergency was imposed startingwith January 8, 2021, and the Business Track and Residence Track frameworks
were halted starting with January 14, 2021.
(2) Trends in the number of foreign visitors and their expenditure
As already mentioned, in 2020 the lack of foreign visitors due to strict border
restrictions led to an almost non-existent inbound tourism expenditure. Next,
we will analyze the data regarding the number of foreign visitors and their expenditure while comparing it to the pre-pandemic figures.
Figure 4-1-1 shows the annual evolution of the number of foreign visitorssince 2010. Until the pandemic outbreak, the number of foreign visitors wason a steady upward trend despite the 2011 Great East Japan Earthquake andthe natural disasters that hit Japan in 2018. However, in 2020 it reached only
4,115,828 (-87.1% YoY, provisional figure), as the COVID-19 pandemic brought
severe restrictions on international mobility. The number of East Asian visitors,
who comprise approximately 70% of the total of foreign visitors, also saw a sharp
decline (Table 4-1-2).
While foreign visitor numbers saw an overall sharp decline, there are certain differences depending on the category. Figure 4-1-2 shows the monthly
evolution of foreign visitor numbers by purpose of travel (tourism, business,（％）（Unit: 10,000）
3,500

60.0
40.0

3,000

20.0

2,500

0.0

2,000

-20.0

1,500

-40.0

1,000

412

500

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

-87.1
2010

0

-60.0
-80.0
-100.0

Number of foreign visitors: left axis
Growth rate: right axis

Figure 4-1-1

Evolution of foreign visitor numbers and annual growth rate:
2010-20

Source: Prepared based on Foreign Visitors Statistics, published by the Japan National Tourism Organization (JNTO)

Section 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture

2020
Share
(%)

Number ofvisitors

Change(%, YoY)

Share
(%)

Total

31,882,049

2.2

100.0

4,115,828

-87.1

100.0

South Korea

5,584,597

-25.9

17.5

487,939

-91.3

11.9

China

9,594,394

14.5

30.1

1,069,256

-88.9

26.0

Taiwan4,890,602

2.8

15.3

694,476

-85.8

16.9

Hong Kong

2,290,792

3.8

7.2

346,020

-84.9

8.4

Thailand

1,318,977

16.5

4.1

219,830

-83.3

5.3

Singapore

492,252

12.6

1.5

55,273-88.8

1.3

Malaysia

501,592

7.1

1.6

76,573-84.7

1.9

Indonesia

412,779

4.0

1.3

77,724-81.2

1.9

Philippines

613,11421.7

1.9

109,110

-82.2

2.7

Vietnam

495,051

27.3

1.6

152,559

-69.2

3.7

India

175,896

14.2

0.6

26,931

-84.7

0.7

UK

424,279

27.0

1.3

51,024-88.0

1.2

France336,333

10.3

1.1

43,102-87.2

1.0

Germany

236,544

9.8

0.7

29,785

-87.4

0.7

Italy

162,769

8.5

0.5

13,691-91.6

0.3

Russia120,043

26.6

0.4

22,260

-81.5

0.5

Spain

130,243

9.5

0.4

11,741

-91.0

0.3

USA

1,723,861

12.9

5.4

219,307

-87.3

5.3

Canada375,262

13.5

1.2

53,365-85.8

1.3

Mexico71,745

4.8

0.2

9,528

-86.7

0.2

Australia

621,77112.5

2.0

143,508

-76.9

3.5

Source: Prepared based on Foreign Visitors Statistics, published by the Japan National Tourism Organization (JNTO)

and other purposes).3) Between February 2020, and February 2021, the numberof foreign tourists and business travelers saw a consistent YoY decline which
exceeded -90%. On the other hand, the drop rate of the number of visitors in the“other purposes” category fluctuated substantially, after bottoming out in May
2020 (-99.1% YoY). These fluctuations are partly the result of border relaxation
measures implemented since July 2020 such as “Residence Track,” which allowed entry for mid- to long-term residents such as foreign students and technical trainees. Due to the gradual easing of entry requirements, the rate of decline

3) According to JNTO, the number of tourists is obtained by deducting the number of business travelers from the total number of short-term visitors and it also includes those whoare visiting relatives of friends. “Other purposes” refers to purposes other than tourism andbusiness, including studying and training, as well as diplomatic and official ones.

Part Ⅰ

Change(%, YoY)

Part Ⅱ

2019
Number ofvisitors

Part ⅢCountry/
RegionForeign visitor numbers by nationality: 2019-2020 comparison

Part Ⅳ

Table 4-1-2

203

204

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook(unit: 1,000）
3,500

（％）
40.0

3,000

20.0

2,500

0.0

2,000

-20.0

1,500

-43.9

1,000
500

-84.7

-60.0
-80.0

-94.4

-100.0Jan-2019
Feb-2019
Mar-2019
Apr-2019
May-2019
Jun-2019
Jul-2019
Aug-2019
Sep-2019
Oct-2019
Nov-2019
Dec-2019
Jan-2020
Feb-2020
Mar-2020
Apr-2020
May-2020
Jun-2020
Jul-2020
Aug-2020
Sep-2020
Oct-2020
Nov-2020
Dec-2020
Jan-2021
Feb-2021

0

-40.0

-51.8
-59.0

Tourism: left axis

Business: left axis

Other purposes: left axis

Tourism growth rate: right axis
Business growth rate: right axis
Other purposes growth rate: right axis

Figure 4-1-2

Foreign visitor numbers by travel purpose

Source: Prepared based on Foreign Visitors Statistics, published by the Japan National Tourism Organization (JNTO)（Unit: JPY 100 million）
14,000（％）
100.0

12,00080.0
60.0

10,000

40.0
7,071
20.0

8,000
6,000

0.0

4,000

-20.0

2,000

-38.6
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Q1-2018
Q2-2018
Q3-2018
Q4-2018
Q1-2019
Q2-2019
Q3-2019
Q4-2019
Q1-2020

0

-40.0
-60.0

Expenditure by foreign visitors: left axis
Growth rate: right axis

Figure 4-1-3

Evolution of expenditure by foreign visitors: 2014-2020

Note: Due to methodological changes applied in 2018, there may be some inconsistencies in comparisons withdata from 2017 and earlier.
Source: Prepared based on Consumption Trends of International Visitors to Japan Survey, published by the Japan Tourism Agency (JTA).

shrank to -51.8% YoY in December 2020. However, after Japan decided to suspend the Business Track and Residence Track schemes on January 14, 2021,
the decline deepened once again to over -90%.
Figure 4-1-3 shows expenditure by foreign visitors and its evolution. Between 2014 and 2015, Japan experienced an inbound tourism demand boom, andSection 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture

205

Part Ⅱ
Part ⅢPart Ⅳ(3) Number of foreign arrivals at Kansai International Airport: 201920
Like the rest of Japan, Kansai was not spared from the lack of foreign visitors.
Table 4-1-3 shows a 2019-2020 comparison in terms of the number of foreign
arrivals by nationality at Kansai International Airport (hereinafter referred to
as KIX). In 2019 the total number of foreign arrivals was 8,378,039, the highest
number on record since the airport opened. Considering the geographic proximity, the share of arrivals from East Asia is higher than on a national level.
Particularly, the share of Chinese arrivals was as high as 39.4% in 2019, surpassing the national average of 30.1% by 9.3% pt. However, in 2020 the total number
dropped substantially to 1,011,186 (-87.9% YoY) as a result of border closures. By
nationality, the largest number of arrivals was from China (370,923, -88.8% YoY),
decreasing to a mere tenth of the 2019 level.

Part Ⅰ

as a result of so-called “shopping sprees” (bakugai) expenditure saw quarterly
increases of over 80%. Subsequently, despite the impact of exchange rate fluctuations4) and natural disasters, inbound tourism expenditure recorded a record
high of JPY 4.8135 trillion in 2019 (see Figure 4-1-4 in the Annex). However, in2020 Q1 expenditure was only JPY 707.1 billion (-38.6% QoQ) due to the pandemic-induced border closures. We anticipate that it will take time for expenditureby foreign visitors to return to its pre-pandemic levels.

4) As we pointed out in the 2019 Japanese-language edition of APIR’s Economic Outlook(Chapter 5, Section 1), in 2015 the exchange rate was 1 USD=120 JPY, but in 2016 the yen
strengthened against the dollar, reaching 1 USD=110 JPY. In general, as the yen appreciates, goods and services in Japan become more expensive; therefore expenditure is expected to decrease.

206

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook

Table 4-1-3

Country/
RegionForeign arrivals numbers at KIX: 2019-2020 comparison
2019

Number ofarrivals at KIX

2020

Change(%, YoY)

Share
(%)

Number ofarrivals at KIX

Change(%, YoY)

Share
(%)

Total

8,378,039

9.6

100.0

1,011,186

-87.9

100.0

South Korea

1,510,776

-30.2

18.0

134,522

-91.1

13.3

China

3,302,710

43.6

39.4

370,923

-88.8

36.7

Taiwan1,098,555

4.2

13.1

152,469

-86.1

15.1

Hong Kong

604,787-1.9

7.2

76,090-87.4

7.5

Thailand

310,615

18.6

3.7

42,645-86.3

4.2

Singapore

114,459

25.7

1.4

11,024-90.4

1.1

Malaysia

150,760-1.5

1.8

19,919-86.8

2.0

Indonesia

85,64312.5

1.0

18,396-78.5

1.8

Philippines

198,265

50.4

2.4

41,318-79.2

4.1

Vietnam

148,24755.9

1.8

37,263

-74.9

3.7

India

21,599

17.7

0.3

2,470

-88.6

0.2

UK

59,632

34.5

0.7

6,849

-88.5

0.7

France61,340

18.7

0.7

6,532

-89.4

0.6

Germany

35,255

15.3

0.4

4,093

-88.4

0.4

Italy

24,571

22.1

0.3

1,830

-92.6

0.2

Russia

9,496

81.5

0.1

1,640

-82.7

0.2

Spain

28,072

10.8

0.3

1,625

-94.2

0.2

USA

220,341

24.6

2.6

21,903-90.1

2.2

Canada55,437

15.7

0.7

5,567

-90.0

0.6

Mexico

4,574

18.8

0.1

467

-89.8

0.0

Australia

94,75217.9

1.1

18,068-80.9

1.8

Source: Prepared based on Immigration Control Statistics (Ministry of Justice).

3. Domestic tourism trends in 2020-21: COVID-19 response
As already mentioned in the previous subsection, both inbound tourism demand, which until the COVID-19 pandemic had experienced steady growth, andJapan’s outbound tourism demand have virtually disappeared and their recovery is not yet in sight. Under these circumstances, encouraging domestic tourism becomes all the more important. Figure 4-1-4 compares Japan’s total travel
expenditure in 2019 with 2020. In both years, Japan’s domestic tourism generated the largest share of the total. In 2020, the restrictions imposed on people’s
flow during the states of emergency led to a significant drop in domestic tourism
expenditure, which was approximately JPY 9.9 trillion (-54.5% YoY). In order tostimulate demand for domestic travel, the Japanese government decided to start

Section 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture

207

the “Go To Travel” subsidy program in the second half of 2020. In the following,
we will look at the dynamics of domestic travel during the COVID-19 crisis andthe “Go To Travel” program as a measure to stimulate demand.

Domestic travel expenditure
Expenditure by foreign visitors

Figure 4-1-4Part Ⅰ

2020（Unit: JPY 1 million) Domestic travel
expenditure:
Domestic travel
9,973,761
expenditure:
21,931,195
Outbound travel expenditure

Travel expenditure: 2019-2020 comparison

Note: Outbound travel by Japanese nationals is counted as services imports and it includes overseas travel-related payments. Moreover, due to the COVID-19 pandemic, collecting data for Q2, Q3, and Q4 of 2020
was suspended. For this reason, the expenditure generated by foreign visitors in 2020 is an estimate
calculated using the travel expenditure per capita in Q1 2020.
Source: Prepared based on Travel and Tourism Consumption Trend Survey and Consumption Trends of International Visitors
to Japan Survey, published by the Japan Tourism Agency (JTA).

(1) Trends in the total number of Japanese overnight guests
We will begin our analysis of domestic tourism during the COVID-19 pandemic by looking at the trends in the total number of Japanese overnight guests.
Figure 4-1-5 shows the total number of Japanese guests nationwide and in the
Greater Kansai area5) as reflected in the Overnight Travel Statistics Survey, published by the Japan Tourism Agency (JTA). The number of guests has bottomedout both nationwide (-81.6% YoY) and in Kansai (-84.6% YoY) in May 2020, during
the state of emergency (April 7-May 25).
After the state of emergency was lifted and economic activities resumed,
the rate of decline started to shrink. Partly due to the “Go To Travel” campaign,
which was launched in July 2020, by November the situation further improved(nationwide: -16.1% YoY, Kansai: -14.8% YoY). However, in December, when the
campaign was temporarily suspended due to the virus resurgence, the rate of
decline expanded once again. By February 2021, the effect of the “Go To Trav5) Greater Kansai include the following 10 prefectures: Fukui, Mie, Shiga, Kyoto, Osaka, Hyogo, Nara, Wakayama, Tottori, and Tokushima.

Part Ⅱ

2019（Unit: JPY 1 million）

Expenditure byforeign visitors:
744,600

Part Ⅲ

Outboundtravelexpenditure:
4,841,220

Outbound travel
expenditure:
971,744

Part Ⅳ

Expenditure by foreign visitors:
4,813,500

208

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlookel” campaign wore off, and the rate of decline returned to a level similar to July
2020, when the campaign first started (nationwide: -46.5% YoY, Kansai: -48.0%
YoY). In addition, Figure 4-1-6 shows the total number of overnight guests
by residence. In April and May 2020, the ratio of guests from other prefectures
decreased, while the ratio of guests from the same prefecture increased bothnationwide and in Kansai, due to restrictions imposed on inter-prefectural travel
during the state of emergency. Since June 2020, the ratio of guests from otherprefectures returned to an upward trend due to restrictions on inter-prefectural
travel being relaxed and the “Go To Travel” campaign. However, the ratio ofguests from the same prefecture still increased as a result of the fact that anincreasing number of tourists preferred to avoid regions where the virus was
spreading, choosing instead to travel closer to home.6)
（％）
40.0
20.0
-14.8

0.0

-16.1

-20.0

-46.5

-40.0
-60.0

-48.0

-81.6

-80.0

-84.6

Jan-2014
Apr-2014
Jul-2014
Oct-2014
Jan-2015
Apr-2015
Jul-2015
Oct-2015
Jan-2016
Apr-2016
Jul-2016
Oct-2016
Jan-2017
Apr-2017
Jul-2017
Oct-2017
Jan-2018
Apr-018
Jul-2018
Oct-2018
Jan-2019
Apr-2019
Jul-2019
Oct-2019
Jan-2020
Apr-2020
Jul-2020
Oct-2020
Jan-2021-100.0Nationwide

Figure 4-1-5

Greater Kansai

Growth rate of total number of Japanese overnight guests: Jan
2014-Feb 2021

Note: the figures are final for the period up until 2019, and preliminary for 2020-21.
Source: Prepared based on Overnight Travel Statistics Survey, published by the Japan Tourism Agency (JTA).

6) Campaigns ran by each prefecture to stimulate intra-prefectural travel also played an important role. For more details, see the 2021 Japanese-language edition of APIR’s Economic
Outlook (Chapter 5, Section 1).

Section 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture
（％）
100.0
90.0

209

Greater Kansai
6.0 5.1 5.9 5.8 4.9 4.9 4.7 3.4 4.4 4.1 4.5 4.1 4.1 5.2

80.0
70.0
60.0
50.0

74.7 69.3 65.3 66.0

Within the prefecture: Japanese nationals
Outside the prefecture: Japanese nationals
Foreigners
Unknown（％）
Nationwide
100.0 5.4 5.3 5.2 5.4
6.0 4.3 4.6 4.1 4.1 4.9 3.9 4.3 4.0 4.5
90.0
80.0

50.0
40.0

53.6

62.2

66.4

61.3

61.062.3
62.3 63.8 65.8 68.1 63.860.1 61.7
56.8 60.4 61.0

30.0

Feb-2021

Jan-2021

Dec-2020

Oct-2020

28.5 26.7 30.1 33.2 32.6
Nov-2020

Sep-2020

Jul-2020

Aug-2020

35.6 34.1 33.3
32.8 31.5
33.332.8
Jun-2020

Apr-2020

Feb-2020

Mar-2020

0.0

Jan-2020

31.2
10.0 18.5
18.519.6
19.6 23.7

May-2020

20.0

Within the prefecture: Japanese nationals
Outside the prefecture: Japanese nationals
Foreigners
Unknown

Figure 4-1-6

Ratio of overnight guests by residence: Jan 2020-Feb 2021

Note: The figures for 2020-21 are preliminary.
Source: Prepared based on Overnight Travel Statistics Survey, published by the Japan Tourism Agency (JTA).

(2) Trends in domestic travel spending
Next, we review the trends in domestic travel expenditure. Due to the measurestaken to contain the spread of the virus, both the number of domestic travelers
and travel expenditure decreased sharply. Figure 4-1-7 shows the expansion
rate of domestic travel expenditure in Japan in general and Kansai in particular.
Both across the country and in Kansai, the effects of pandemic started to be felt

Part Ⅲ

60.0

Part Ⅳ

70.0

Part Ⅱ

Part Ⅰ

Jan-2021

Feb-2021

Dec-2020

Oct-2020

Nov-2020

Sep-2020

Jul-2020

25.2 29.8 26.6 25.8 26.1 24.1 23.1 19.324.0 27.5 27.7
Apr-2020

Feb-2020

Mar-2020

12.4 14.6 17.6
Jan-2020

0.0

Aug-2020

20.0
10.0

69.6 70.8 72.0

50.8

Jun-2020

30.0

66.767.7
67.7
66.7 63.4 66.7

May-2020

40.0

64.5

69.1

210

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook

in Q1 2020. As a state of emergency was imposed in Q2, the growth rate slumped
to -83.2% YoY nationwide, and to -87.2% YoY in Kansai, both surpassing the -80%
threshold. In Q3, due to the reopening of economic activities and the start of
the “Go To Travel” campaign, the rates of decline began to shrink, reaching-56.6% YoY nationwide, and -52.4% YoY in Kansai after bottoming out in Q2. The
recovery trend continued in Q4, when the rate of decline reached -45.0% YoY nationwide, and -42.7% YoY in Kansai. However, the “Go To Travel” campaign was
suspended in December, and a new state of emergency was declared in January
2021, which prompted a downward trend in Q1 2021. As a result, the nationwide
rate of decline was 50.1% YoY, while in Kansai it was -54.6% YoY, also due to thefact that the state of emergency covered Kyoto, Osaka, and Hyogo prefectures.
（％）
60.0
40.0
20.0
0.0
-20.0

-21.7

-40.0

-17.8
-52.4
-83.2

-60.0
-80.0

Q1-2021

Q4-2020

Q3-2020

Q2-2020

Q1-2020

Q4-2019

Q32019Q2-2019

Q1-2019

Q4-2018

Q3-2018

Q2-2018

Nationwide

Figure 4-1-7

-50.1

-45.0
-54.6
-56.6

-87.2
Q1-2018-100.0-42.7

Kansai

Domestic travel expenditure growth rate: Q1 2018-Q1 2021

Note: The figures for Q1 2021 are preliminary.
Source: Prepared based on Travel and Tourism Consumption Trend Survey, published by the Japan Tourism Agency(JTA).

(3) “Go To Travel” campaign
In order to stimulate the depressed travel demand, the government initiatedthe “Go To Travel” campaign. In this subsection, we review the effects of thecampaign, while looking at its development and performance.7) The campaign,
which initially excluded Tokyo, started on July 22, 2020, and by the end of the7) In Chapter 2, Section 1, Subsection 5 of this issue, the economic effects of the “Go To Travel” campaign are analyzed by using the Family Income and Expenditure Survey. In addition,
in Chapter 4, Section 5 we analyze the pandemic-induced decrease in tourism expenditureand the economic effect of the “Go To Travel” campaign by using the input-output table.

Section 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture211

month it had generated approximately 2,140,000 overnight stays. After Tokyo
was included on October 1, the number grew to 51,860,000 at the end of October, an increase of 22,050,000 from the end of September. On December 14, thecampaign was temporarily suspended, but counting guests who checked out on
December 28 brings the total number of overnight stays to at least 87,810,000(Figure 4-1-8).8)（unit: 10000）
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
214
0
Up to

Up to

Up to

Up to

Up to

Up to

Jul. 31

Aug. 31

Sep. 30

Oct. 31

Nov. 30

Dec. 28

8,781

Part Ⅰ

5,186
2,981
1,563

Number of overnight stays by “Go To Travel” campaign participantsPart Ⅱ

Figure 4-1-8

7,7528) According to the Japan Tourism Agency, the number of “Go To Travel” campaign participants who tested positive for COVID-19 was 411 (as of the end of May 2021). In addition,
there are no report of the virus spreading to hotel or tourist facility employees. In November 2020, the Novel Coronavirus Infectious Disease Control Subcommittee declared that“As of now, there is no evidence that the Go To Travel campaign is a major factor in the
spreading of the virus.”

Part Ⅳ

Next, we look at the discounts offered by the “Go To Travel” campaign. By
September 15, 2020 the campaign had offered JPY 73.5 billion in discounts, andafter Tokyo was included, the sum rose to JPY 188.6 billion by October 31. Until
the campaign’s temporary suspension, the amount of discounts provided cameto a total of JPY 408.2 billion. In addition to discounts, regional coupons also
became available, which increases the total amount of subsidies to JPY 539.9
billion (Figures 4-1-9 and 4-1-10).

Part Ⅲ

Note: The figures include estimative preliminary numbers and are not definitive.
Source: Prepared based on Performance of the Go To Travel Campaign by the Japan Tourism Agency

212

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook（Unit: JPY 100 million）
4,500

3,831

4,000
3,500

3,215

3,000

2,509

2,500
2,000

1,397

1,500
1,000

4,082

1,886

735

500
0

Figure 4-1-9

Up to

Up to

Up to

Up to

Up to

Up to

Up to

Sep 15

Oct 15

Oct 31

Nov 15

Nov 30Dec 15

Dec 28Amount of discounts offered by the “Go To Travel” campaign

Note: The figures include estimative preliminary numbers and are not definitive.
Source: Prepared based on Performance of the Go To Travel Campaign by the Japan Tourism Agency.

（Unit: JPY 100 million）
1,400

1,317

1,200

1,011

1,000

848

800
571

600
400
200
0

Figure 4-1-10

201

Oct 1-Nov 9

Oct 1-Dec 1

Oct 1-Dec 21

Oct 1-Dec 28* Oct 1-Dec 28**

Amount of regional coupons used

Note: The figures include estimative preliminary numbers and are not definitive. * counts the redemption requests received by the Go To Travel Office by January 4, while ** counts the redemption requests received by
February 1.
Source: Prepared based on Performances of the Go To Travel Campaign by the Japan Tourism Agency.

The “Go To Travel” campaign also had an impact on prices. Figure 4-111 shows the YoY change of accommodation fees as reflected by the Ministryof Internal Affairs and Communications’ Consumer Price Index. While in July
2020, at the beginning of the campaign, the change was -4.5% YoY, in October
the decline deepened to -37.1% YoY. The campaign offers discounts of up to 35%of the accommodation fee, so since Tokyo was included, the increasing travel
demand drove the fees down. However, since then the campaign was suspended
and the effect of discounts wore off, so in April 2021 the rate of decline shrankback to -5.7% YoY.

Section 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture
（％）
20.0

Apr-2021, -5.7%
Go To
TravelPeriod

10.0
0.0
-10.0
-20.0
-30.0

Jul-2020, -4.5%
Oct-2020, -37.1%

4. The future of inbound tourism
As already stated, inbound tourism demand is expected to require more time torecover. While the government’s measures to stimulate demand were effective
to a certain extent, their positive effect faded once the “Go To Travel” campaign
was suspended due to the resurgence of COVID-19. The progress of vaccination
is important when considering the prospects for recovery of inbound tourism
demand.9) In July 2021 the EU, where the vaccination rate is relatively high, has
adopted a “Digital COVID Certificate,” which facilitates travel for vaccinated individuals. On the other hand, despite its higher vaccination rate, Japan still maintains strict border enforcement measures, and the outlook for border relaxation
remains uncertain. The absence of foreign visitors provides a good opportunity
to review past strategies and identify their issues. Considering that, in last year’s
Economic Outlook we provided new analytical perspectives for future inboundtourism strategies (see the Venn diagram A below). This year we further examined these analytical perspectives, and interviewed each prefecture’s tourism
authority, while having in mind the concept of “tourism regionalization.” The
next section compares and examines each prefecture’s tourism strategy basedon those survey results.

9) For details about the vaccination rollout situation, see Section 5 of “COVID-19 Chronology.”

Part Ⅱ

Note: 2020 average=100.
Source: Prepared based on Consumer Price Index by the Ministry of Internal Affairs and Communications.

Part Ⅲ

Consumer Price Index: accommodation fees (YoY):
Jan 2015-Apr 2021

Part Ⅳ

Figure 4-1-11

Part Ⅰ

Jan-2015
Apr-2015
Jul-2015
Oct-2015
Jan-2016
Apr-2016
Jul-2016
Oct-2016
Jan-2017
Apr-2017
Jul-2017
Oct-2017
Jan-2018
Apr-2018
Jul-2018
Oct-2018
Jan-2019
Apr-2019
Jul-2019
Oct-2019
Jan-2020
Apr-2020
Jul-2020
Oct-2020
Jan-2021
Apr-2021

-40.0

213

214

Chapter 4 / Inbound Tourism in Kansai: A FY 2020 Retrospective and Outlook

Box1

An analytical perspective for future inbound tourism
strategies
In the 2020-21 edition of Kansai and the Asia Pacific Economic Outlook,
Chapter 4, Section 5, we examined inbound tourism strategies in anticipationof the post-pandemic era. As illustrated in Figure 4-1-12, we pointed out thatan inbound tourism demand analysis must take into consideration safety, security and comfort as fundamental factors, in addition to brand power, innovation, and tourism regionalization. We defined safety as “a physical conditionin which there is no imminent danger to the visitor and his or her property,”
security as “a condition in which there is no cause for concern for the visitor
in case something unforeseen happens,” and comfort as “being able to enjoy
a relaxed and stress-free travel experience.” We further argued that “when allthese conditions are met, it can be assumed that tourists will feel satisfied with
their travel experience” (p. 220).
A: Last year’s Venn diagram
Brand Power
Tourism
regionalization

Innovation

Safety, Security and Comfort

B: Updated Venn diagram
Brand Power
Tourism
regionalization

Innovation

Safety/Security

Comfort（Evaluation of the overall
experience as tourist in Japan）（public safety,
hygiene, etc.）

During the trip-post-trip

Pre-tripTimeline

Figure 4-1-12
Source: APIR

An analytical perspective for future
inbound tourism strategies

Part Ⅱ

References
Asia Pacific Institute of Research (2020) “Kansai and the Asia Pacific Economic
Outlook 2019-20.”
Asia Pacific Institute of Research (2021) “Kansai and the Asia Pacific Economic
Outlook: 2020-21.”
Japan Tourism Agency (2021) “White Paper on Tourism 2021” (Japanese title:
Reiwa 3-nen-ban Kankō Hakusho).

Part Ⅲ

From a foreign visitor’s perspective, safety and security are factors which
influence decision-making before the trip, while comfort is what the visitors
should feel during and after the trip. Based on the “before, during and after”
time-frame, we can change the base layer of the Venn diagram as illustrated in version B. To be specific, visitors expect to feel safe and secure before
they decide to choose Japan as their destination. After arrival, the feeling of
comfort can be earned through first-hand tourism experience. By considering
these three elements, it is possible to enhance the tourism experience before
and during the trip, and solve concerns that might appear while traveling. We
must go further than offer a superficially enjoyable experience, and gain thevisitors’ confidence by meeting their expectations and even surpassing them.
Thus, if we can instill the feeling of comfort even before the trip, it may bepossible to raise foreign visitors’ expectations.

Part Ⅰ

215

Part Ⅳ

Section 1 / A FY 2020 Retrospective: The COVID-19 Pandemic and Its Impact on Each Prefecture