COVER STORY • 1

ORoundtable with Tomoko Okuda, David Atkinson, Mitsuaki Hoshino & Masakazu Toyoda

pportunities & Challenges
for Japan as a Tourism
Powerhouse

By Japan SPOTLIGHT

For the Japan SPOTLIGHT July/August 2023 issue highlighting tourism’s recovery from the pandemiccrisis, we held the following roundtable showcasing Japan as a tourism powerhouse.
Participants: Tomoko Okuda, Proprietor of Kyoto Cuisine Ryokan (Inn) Shiraume
David Atkinson, President of Konishi Decorative Arts and Crafts Co., Ltd. and Special
Advisor to the Japan National Tourism Organization (JNTO)
Mitsuaki Hoshino, Director of International Tourism Department of the Japan Tourism Agency
Moderated by Masakazu Toyoda, Chairman & CEO, Japan Economic Foundation (JEF).
(Online Roundtable on May 29, 2023)
Participants

Tomoko Okuda

David Atkinson

Introduction
Toyoda: At the beginning of this roundtable discussion, I would liketo speak about today’s themes. As the Japanese economy is facedwith the challenge of depopulation, the idea has emerged that
tourism could be a driving force of growth to compensate for the
possible economic decline due to depopulation, and especially so inthe process of recovery from the pandemic disaster.
Japan has rich natural tourism resources, such as landscapes withmountains, rivers, and coastal areas, as well as a variety of plants
and animals. The climate is generally mild and the four seasons
regular and predictable. Japan also has a distinctive culture, andJapanese cuisine was registered as a World Intangible Cultural
Heritage by UNESCO in 2013. But in spite of such great potential for
tourism, the number of foreign tourists visiting Japan has notreached even the top 10 among nations.
4 Japan SPOTLIGHT • July / August 2023

Mitsuaki Hoshino

Masakazu Toyoda

Today, we have invited three experts on tourism to discuss threedifferent questions. What are the most attractive aspects of Japan for
visitors from abroad? Can Japan’s tourism industry beinternationally competitive and a key industry for supporting theJapanese economy? And how can we attract many more visitors tofill the gap between the reputation and the reality of foreign tourism
in Japan?
Our three experts are, first, Ms. Tomoko Okuda, proprietor of
Cuisine Ryokan Shiraume, number one in Kyoto’s hotel rankings,
and also president of Gion Shinbashi Townscape Community
Planning Council; second, Mr. David Atkinson, who has inspired
Japanese people by saying that Japan should be number one in
inbound tourism revenue as it enjoys the highest reputation as a
tourist destination in his numerous books on it; and third, Mr.
Mitsuaki Hoshino, director of the International Tourism Departmentof the Japan Tourism Agency, responsible for the Japanese
https://www.jef.or.jp/journal/

government’s tourism promotion strategy, and the Tourism Nation
Promotion Basic Plan that he has been working on has just been
approved by the Cabinet at the end of March 2023.
We would like to start the discussion with the question of what ismost attractive to foreign tourists about Japan. Ms. Okuda, you areworking in Kyoto, considered to be the most attractive tourist spot inJapan. Could you tell us your thoughts about this question? Even in
Kyoto, tourist numbers have been falling due to the pandemic thesepast couple of years up until 2022. What was the situation in Kyoto
and are tourists returning now?

Japan’s Attraction for Tourists from Abroad
Okuda: Japan has many points of attraction for tourists, such as
natural scenery, cultural customs and artifacts, and historical sites.
Although Japan is a small country, it has an unusual diversity ofcultures within it, from the north to the south – from Hokkaido to
Okinawa. But the big issue now is that we cannot take full advantageof these attractions for tourism promotion.
In Kyoto for example, there are many wonderful hotels with luxury
rooms and many public spaces, but I think one of the issues is thequality of service of the staff.
Gion Shinbashi Townscape Community Planning Council wasstarted in 2015. We established this because the uniqueness of
Kyoto was gradually being lost and it looked all too similar to any
other tourist spot. In this area, as a landscape preservation district,
we have many rules to be rigorously observed. But as the young
generation succeeds in business in this district, new businesses try
to attract tourists only to their own business regardless of theharmony of the town community.
We Kyoto people respect the custom of working hard together toenhance the community as a whole and attract tourists to Kyoto. But
many young entrepreneurs today do not hesitate to break thiscustom and the rules, such as the color of a shop curtain or the
shape of the architecture. If this situation continues, we cannot
preserve our unique culture.
I believe that our culture must be passed on to the future
generations. Of course, Gion today is different from what it was 200
years ago, and I think that good ideas, though new to us, can well be
adopted. But we founded this Council for the preservation of our own
culture in this district and made it a rule to have prior consultations
with new shops and discuss with them the nature of their business,
their management of it, and their appearance – and thus without ourpermission, they cannot apply for the Kyoto city government’s
official permission to open a new business.
It is true that due to the pandemic there have been very few
tourists in Gion these past two or three years. It was, however,shocking for me that all the tourists that did visit us during the

pandemic, mostly Japanese, were saying the same thing – namelythat Kyoto had lost its unique charm before the pandemic, but only
now with Covid-19 was the ancient Kyoto coming back.
Bearing these views in mind, we must think about how to develop
tourism in Kyoto while preserving its unique traditional townscape.
This is our future challenge.
Tourists from abroad have recently been returning too. I waswalking around Hanamikoji and Shijou-Dori yesterday and found that
99% of those walking in these areas were from abroad and I could
not hear Japanese at all. The serious problem is that they were justwalking and not spending money. This presents a very toughsituation for the shops on the streets.
Toyoda: What do you think are the acknowledged attractions ofJapan, Mr. Atkinson?
Atkinson: I think it is wrong to think about what we think of as
Japan’s tourist attractions, though there seem to be many people
who think like that. The key question is what travelers are looking forwhen they visit Japan. It is not a question just of which heritage sites
or beautiful scenery you can list; the point is the diversity of
attractions.
For example, it is not true that so many tourists visit Kyoto justbecause of its many temples and shrines. Kyoto offers a richdiversity, such as Gion, cuisine, hiking, shopping venues, allconcentrated in a relatively small area. Tourists don’t come only forhistory and culture. So it does not make sense at all to try to define alimited list of the attractions of Japan as a possible tourist
destination for all 8 billion people in the world. You cannot enjoy
looking at temples and shrines all day and night over a two-weekstay. There are also many tourists who want to go to the beach or
the mountains or walk in a national park. Japan has many beautiful
national parks and it loses out on a much larger market if it does not
fully utilize these unique resources.
Look at Kamakura, for example. It is certainly true that without its
cultural properties, Kamakura would not attract as many tourists as it
does, but it cannot attract as many people as it does only with its
cultural properties. The Enoshima Electric Railway, the beach, good
food, and many other factors all contribute to the number of tourists
visiting. History and culture are not the only or even main decisive
factors in the success of a tourist spot, though they are certainly
important.
Thus how many world-beating tourist attractions a country has is
not the real question. In fact, there are not that many world-beating
tourist attractions in the world. It is often said in Japan that moretourists visit a country with the most world-beating tourist
attractions, but it is not true that we travel to any given country only
for that reason. It is human nature to choose a new place to visit. In
Japan SPOTLIGHT • July / August 2023

5

this regard, the key questions in a tourism strategy are whether anation has tourism assets that people want to visit at least once intheir lifetime, whether those resources have been invested inproperly to be attractive to tourists, and whether the infrastructure
has been put in place to earn the revenues to make tourism
sustainable.
It is fundamental to a tourism strategy to invest in and create such
resources and venues. The Japanese idea that there is no need toinvest in tourism development is extremely irresponsible. Tourism
assets rarely exist; they are created by investment. Without
investment in tourism promotion, nowhere can become a good
tourist spot. In my opinion, investment to make such venues
attractive is the key to a successful tourism strategy.
Toyoda: Mr. Hoshino, what would you say are the mains appeals ofJapan’s tourist resources, as a member of the Japanese government
section in charge of tourism promotion? Due to the pandemic,
inbound tourism has largely decreased these last couple of years.
Could you also tell us whether it is now rebounding to its former
levels?
Hoshino: Inbound tourism is certainly returning now. According to aquestionnaire survey among tourists worldwide, Japan is fortunately
referred to as “the country which they definitely want to visit after the
pandemic”. There could be an argument about which aspects ofJapan they value, such as food, culture, or seasonal elements, but I
imagine people value Japan by taking a comprehensive views ofthese factors.
Before the pandemic, in 2019, foreign tourists visiting Japan
totaled around 32 million, the highest level ever. But with the
pandemic’s impact, this declined to 4.12 million in 2020 when there
were still many foreign tourists until February, and then continued to
decline to 0.25 million in 2021. In accordance with the decrease ininfections, the Japanese government has been relaxing its bordermeasures against entrants into the nation, even after June 2022
when the ban on group tours was lifted. More importantly, since Oct.
11, 2022, it has lifted the ban on visits by individuals on condition
they have a vaccination certificate.
With these new policies in place, the number of foreign tourists
visiting Japan has been increasing steadily again.
In February 2023, there were around 1.5 million foreign tourists, inMarch around 1.8 million, and in April around 1.95 million. The
number for February indicates a recovery to 67% of the level prior to
the pandemic. China still maintains its ban on group tourism, but ifthat is disregarded the level would be back to 82% of the level prior
to the pandemic. As you know, the Japanese government lifted allborder measures at the end of April, and on May 8, Covid-19 wasconsidered to be at level 5 – the same level as influenza – from level
6 Japan SPOTLIGHT • July / August 2023

2 in terms of severity. Restrictions on people’s lives in Japan were
widely modified with these new policies, and so we expect many
more tourists from now on.

Tourism as an Industry
Toyoda: Let’s discuss tourism as an industry. What do you thinkneeds to be improved in the Japanese tourism sector in comparison
with other nations? Do we need more investment in the tourism
business, as Mr. Atkinson mentioned? He mentioned in his book that
we need to attract tourists from abroad who would not hesitate to
pay a high cost for tourism, in particular those coming from nations
far from Japan, such as in Europe. Failure to attract such high-classguests is an issue that needs to be solved. What is your advice, Mr.
Atkinson?
Atkinson: A destination has to find a way to earn sufficient revenue
to cover the inconvenience of having tourists visiting. Only when
there is sufficient revenue being generated does tourism become abusiness, and without those revenues, the number of tourists visiting
is simply an empty boast.
According to the United Nations World Tourism Organization, 70%
of tourism in a country on average comes from intra-regional
tourism. Thus it makes sense that most inbound tourists coming toJapan are from Asia. Likewise, in Europe, most of the tourists arefrom Europe; and the same in America. Intra-regional tourism is themainstay of tourism everywhere.
Initially, Japan’s tourism strategy was focused primarily on Asiaand the number of tourists coming from Asia rapidly increased. Once
Japan had reached critical mass from Asia, I suggested changing thestrategy from a mainly Asian-oriented one to attract tourists from allover the world.
My point was that long-haul tourists stay longer because of thehigher cost and longer travelling time. They not only stay longer but
also stay in more expensive hotels, because the higher investment
required to visit Japan attracts more affluent travelers.
Japanese tourists will tend to stay at hotels and inns mainly atweekends and during the major holiday seasons. However, on
weekdays their occupancy rate is relatively low. Tourism fromoverseas will help to raise occupancy rates over the year sinceholiday periods globally are different and especially because
overseas visitors will travel for a longer period than is true forJapanese tourists. I have also argued that Japan needs to attract
more wealthy tourists, but one of the challenges for the Japanese
tourism industry here is the lack of hotels to accommodate them. As
a rule, hotels and restaurants account for roughly half of tourism
revenue, so Japan cannot attract this market even if it can compete
on the basis of heritage or nature unless it invests more in its hotel

infrastructure. This is not just the right hotel buildings. More needs
to be invested in the right human resources, and that means higher
salaries which also creates an additional boost to the local economy.
Such investment in better hotels and more qualified humanresources has to come first, after which a destination can bepromoted. Spending a lot of money on promotion without suchinvestment is a waste of money. No matter how much a restaurantwith bad food may spend on promotion, customers may come once
but afterwards it would get bad reviews on SNS. In the Internet age,
if your product is not good, a lack of investment quickly results in
bad reviews on the Internet.
In order that foreign tourists from abroad can enjoy staying inJapan, good signage in English and other languages is a necessity.
Obviously, most people cannot understand Japanese on their first
visit to Japan. Museums and heritage sites need multi-language earphone guides and Wi-Fi needs to be widely available. With the rightinfrastructure investment, Japan can become a major tourist
destination, and its reputation will spread via the Internet. The sourceof any industry’s profitability is investment and the same is true forthe tourism industry. People working in the tourism industry need tounderstand this essential point.
Toyoda: A question to Mr. Hoshino. Tourism is considered as a pillarof Japan’s growth strategy in the Tourism Nation Promotion Basic
Plan. I am interested in this plan from three perspectives: raising ormaintaining growth against depopulation, the vitalization of local
economies, and the promotion of Japan’s soft power. Could you
briefly explain about these three perspectives? And could we also
have your views on what Mr. Atkinson has said about the need forinvestment in tourism facilities and in particular his view on longhaul visitors? How is the Japanese government trying to address thisissue?
Hoshino: We consider tourism an important pillar of our growthstrategy and thus it means effectively considering tourism as anindustry. At this moment, the Japanese population is around 126
million and annual consumption per person is around 1.3 million
yen. Hereafter, depopulation will progress and there will be only 100
million people around 2052, according to one estimate. So annual
consumption will decrease as well. Can this consumption decrease
be compensated for by an increase in consumption by inboundtourists?
According to the statistics in 2019, visiting foreign tourist
numbers were about 32 million and their consumption for travel was
4.8 trillion yen. So expenditure on travel per person by foreign
tourists is calculated to be around 158,000 yen. This means that withjust eight foreign tourists, the annual consumption per person in
Japan of 1.3 million yen will be compensated for.

For domestic tourists, this amount corresponds to 23 tourists
staying in hotels and 75 making day trips. So in this light, it would be
more effective for us to have foreign tourists. The 4.8 trillion yen in
expenditure on travel by foreign tourists can be considered asexports of services in trade, and this was the third-largest figure
among industries, following automobiles at 12 trillion yen andchemicals at 8.7 trillion yen.
There is a secondary impact of tourist consumption on otherindustries and on transportation. Total consumption for travel in2019 including both Japanese domestic and outbound tourists andforeign inbound tourists was around 29.2 trillion yen. This produced
55.8 trillion yen in additional production and 4.56 million additional
jobs. This is how we can see that tourism will play an extremely
important role in the economy.
So we must consider the tourism industry as a rising one and try
to restore a strong economy using its strength. I believe in particularthat this would play a pivotal role in revitalizing local economies
suffering from a decline in their resident population.
It should be noted that we changed our policy from one focusedon visitor numbers to one focused on quality in this basic plan.
Above all, we are aiming for high consumption by foreign tourists
and also at developing local tourism industries. In this plan, we
consider long-haul customers staying longer in Japan as well as
wealthy ones as important elements in tourism promotion.
Toyoda: Ms. Okuda, your inn has five rooms in the main building
and two rooms in a separate building and super high-class inn. In
Japan, we would tend to think an egalitarian society is better, but
looking at the rest of the world there are not a few super-wealthypeople. Do you think an inn or a hotel that could attract such veryrich tourists would produce added value?
Okuda: I think consumption per tourist would be a more important
goal in tourism promotion than the number of visitors. Our
customers would be ready to pay whatever is needed to have awonderful experience. We have only seven rooms and it is an oldinn, almost 160 years old. We must follow unique restrictions
regarding landscape preservation and we neither have any outdoor
open-air bath nor a vast garden. Given these conditions, why docustomers choose our inn? I believe the reason is the invaluable
experience we offer – namely, experiencing traditional Japanesecustoms. For example, today there are some young Japanese whohave never slept on a futon or have never seen fusuma or tatami or
have never had a special sake drink to celebrate New Year’s Day. We
welcome those young Japanese and foreign tourists to experience
traditional Japanese customs in our facilities. Therefore, ourcustomers do not say “stay” but “experience” in referring to their
being with us. Their experience with us is worth the extra cost. A
Japan SPOTLIGHT • July / August 2023

7

cheap hotel would be good enough just for staying, as even cheap
hotels are well appointed today. So the focus of tourism promotion
must be on how much money tourists have spent rather than thenumber of foreign visitors.
Investment in tourism facilities is of course important. Even
though they can have a good experience, if a toilet has to be sharedby customers in a hotel, wealthy customers would not come. Thereneeds to be minimum facilities for good customers, and even more,investment in human resources. In a small inn like ours, there arelots of occasions when our staff communicate with the customers
and their skills strongly affect the customers’ satisfaction. How muchknowledge and experience staff members have is crucial and thus
education for the staff is indispensable. Such education is limited insmall businesses and this will be a future issue for tourism
promotion.
Assuming that foreign tourists are increasing, local people would
not be convinced of the benefits of tourism unless they could earnmoney. They would consider it a nuisance. In particular, Kyoto
people, even only those in the Gion area, would feel this strongly andconsider it tourism pollution, since it would be more difficult to ride
on a bus and go to shops often due to excessive tourism. You
cannot gain locals’ support for tourism promotion if this situation
continues.
I hope there will be a local system for local residents to gain thebenefits. For example, we could have a different fee for public
transportation to be applied for local residents and tourists. Other
facilities like museums could apply such a system as well. This is
how municipal governments could gain money, and this money
could eventually be to the benefit of the locals.
Toyoda: Are there many foreign tourists coming to your inn?
Okuda: Yes. Around May, half of our customers are foreigners. But
we are restricting the number of foreign customers, because theytend to plan their trips a long time in advance and if we accepted
reservations so far in advance, our customers would all be
foreigners. However, most of these foreigners come to our inn, sucha small place in Gion, to enjoy experiencing a traditional Japanese
lifestyle. If they find themselves surrounded by all foreign customers,
they would be disappointed. In this light, we try to avoid having all
the customers being foreigners at any given moment and create anenvironment where the majority of customers are Japanese.
Toyoda: Is there such a strong demand around the world for staying
at your inn?
Okuda: Yes. There are now 60 to 70 inquiries per day from abroad.
We have to turn down most of the requests for reservations because
8 Japan SPOTLIGHT • July / August 2023

we have such a strong demand from overseas.

Enhancing Tourism Industry’s International
CompetitivenessToyoda: The last subject for discussion is what to do to improve theJapanese tourism industry’s international competitiveness. First, I
would like to ask Mr. Hoshino. The goal for the number of visiting
foreign tourists in 2025 set in the Fourth Tourism Nation Promotion
Basic Plan is to exceed the number in 2019 and it looks rather
modest. But it may be reasonable because of the remaining threat ofthe pandemic. Anyway, you would need to have an ambitious goal
and a policy to realize it. Could you explain the essential points of thepolicy support adopted in this basic plan? I think most importantly
the industry must maintain business profitability by itself rather thandepending on government subsidies. In this sense, the issue of theIntegrated Resort (IR) is very important. Could you give your view on
this as well?
Hoshino: The Basic Plan was revised on March 31, 2023. The pointsof this revised plan are to aim at building up sustainable tourism
spots nationwide, restoring inbound tourism and expanding
domestic tourism. These three goals are expressed with three key
phrases: “sustainable tourism”, “consumption expansion” and“promotion of tourism in local regions”. As goals for 2025, aiming at
raising the quality of tourism, we set up new goals such asincreasing the number of regions engaged in building up sustainable
tourism spots to 100, increasing a foreign tourist’s consumption for
travel to 200,000 yen, and also two-night stays in local regions ofJapan per foreign tourist. Of course, we set up a numerical target forforeign tourists visiting Japan as one that exceeds the level in 2019,
but the core of this plan is to establish goals for the improvement ofquality.
The first goal, building up of sustainable tourism spots, will bepromoted in the belief that we need a framework to create a virtuous
cycle in local communities and economies through tourism
promotion. In particular, on the issue of business profitability, we areaiming to link increased profitability or productivity withimprovement in the working conditions of employees.
We will subsidize investments for the restoration of tourism spots
by enhancing added-value, such as large-scale reforms of banquet
rooms into something else, given less demand for them under the
pandemic, and also promote digital transformation (DX) in tourism.
We will help the tourism business in replacing a wide range ofmanual work with digital technology and thus reduce human labor.
But we will also promote a policy of raising and keeping humanresources in tourism.
As Ms. Okuda mentioned, we want to create a firm consistency

between preserving local nature and culture and developing tourism,
while maintaining the local residents’ sympathy with our plans. We
want to pursue a policy for such consistency between the two.
As for restoration of inbound tourism, we want to achieve the goalof the number of foreign tourists visiting Japan exceeding the level of2019 as quickly as possible. In doing so, expansion of inboundtourists’ consumption and promotion of visits by foreign tourists toJapanese regions are very important goals, and we reflect these key
concepts in our basic plan with new numerical targets such as
200,000 yen in consumption per foreign tourist and two-night stays
in local regions per foreign tourist. More specifically, we will
promote a “restarting tourism movement” to publicize Japan’s
attractions by creating special experience for foreign tourists all overthe nation. We are working hard now on the contents of these special
experiences.
On the issue of attracting wealthy foreign tourists, with Mr.
Atkinson’s guidance, we came up with five concepts for this. The
first is “sell” – meaning how to create potential value to meet theneeds of high-end tourists. The second is “lodge” – meaning how to
prepare high-class lodging facilities for those wealthy tourists. The
third is “human resources” – meaning how to assign the right staff
for such lodging venues and how to develop the hospitality shown by
tour guides. The fourth is “connection” – meaning how tocommunicate in particular with potentially wealthy foreign
customers. And the fifth is “transportation” – meaning how todevelop new transportation means for these wealthy people, such as
those visiting by private jet, to create added value for them. In March
2023, we chose 10 regions as models and are ready to discuss how
these concepts can be specifically achieved.
Our strategy for expansion of Japanese domestic tourism isimportant as well, and this is the third goal defined in our basic plan.
We aim to spread demand for tourism across the months anddevelop a new demand for domestic travel that will lead to the
expansion of employment in tourism-related sectors. Morespecifically, we are planning to promote new practices for holidays
and create second hometowns.
In talking about investor relations, casinos are always mentioned,but I think it should be emphasized that an IR could attract not only
casinos but also international conventions and business customers.
Business customers are good customers, as consumption per
individual is high. Furthermore, they spend time not only working but
also on tourism and they would stay longer at such resorts. I think it
would be important to meet various people’s needs in thinking about
a future tourism promotion policy.
Toyoda: Ms. Okuda, could you talk about what you expect theJapanese government to do, on behalf of people engaged in tourism
in Japan? Also, if you have any advice for local tourism industry

people, could you tell us?
Okuda: Among many things I would like the Japanese government todo, human resources development for tourism that I mentioned
cannot be accomplished in a short time. In Kyoto, there are not only
big hotels but also small ones and inns. Those small ones inparticular cannot afford to spend money for education of their staff
or human resources development. They cannot spend much timeeither on that in the midst of Covid-19 and they also suffer from alabor shortage. We will need public support in this area. I would likethe government to start working on creating a system for support bywhich we can send our staff to public education schools for a certain
period to help raise the quality of services. Another thing I would likethe government to do is to improve the quality of tour guides, who
are the important links between tourists and the destination sites.
For people in the local tourism industry, I suggest they come up
with some creative ideas. A good example often mentioned is the hotsprings in Kurokawa in Kumamoto Prefecture. They were once
almost deserted and at a certain stage they found they could notcontinue business, and so all the hot spring village people got
together and decided to issue a certificate for bathing to be used inany hot spring among all the lodging facilities in Kurokawa, and thiseventually led to explosive popularity.
However, no matter how creative the ideas may be to attract
foreign tourists, they will be difficult to attract if the area has bad
traffic access. Convenient transportation, at least to some extent, will
be necessary.
Toyoda: Mr. Atkinson, if Japan aims to be the top tourist destinationin the world, I think government-private sector collaboration will benecessary to boost the tourism industry’s competitiveness. Could
you tell us more specifically what kind of private business efforts andpublic policies are desirable in this light? Please also tell us what islacking in government and private business efforts at this moment.
Atkinson: Japan’s tourism strategy has been successful mainly
because it has a both a target to increase the number of inboundtourists balanced by a revenue target. The quantitative goal istempered by the qualitative goal.
No major car company produces just one car. To serve a global
population of 8 billion, there is a wide variety of options available toanswer to the very wide range of demand. Some people prefer todrive a small car, while others prefer SUVs, and yet otherdemographics own expensive sports cars. Toyota has many kinds ofvehicles to meet such diverse needs, and tourism is no different.
Increasing the number of tourists visiting the prefectures, towns andvillages can be achieved relatively easily, if aimed at tourists who do
not spend much money. But this is does not boost the local
Japan SPOTLIGHT • July / August 2023

9

economy and above all imposes a heavy burden on local
communities.
During the administration of late prime minister Shinzo Abe I
argued passionately for the establishment of a number and a revenue
target to address the issue of over-tourism. Japan’s traditional
tourism business model was not focused on increasing revenues per
traveler. As a result, the industry under-invested and simply focusedon increasing the number of people visiting in order to increase
revenues. The strategy now is to raise the spend by tourist while
increasing the numbers. Obviously, it is preferable to have 30 million
tourists spend 10,000 yen each, than 50 million people spending
only 1,000 yen each. There needs to be more capital investment andinvestment in human resources in order to raise the average spend.
This is vital to attract wealthier tourists.
The three basic forms of investment – in R&D, facilities, andhuman resources – are the keys to raising revenues anywhere in thewhole economy. Tourism is no exception. In order to raise theaverage spend, we need to raise both the quality and the salaries ofthe people working in tourism. You cannot earn a high salary only bybowing. Staff need to be knowledgeable, to be able to communicate
effectively with customers, which may require foreign language
ability, and to be able to resolve issues. Staff may need to be able torespond to questions about history if in Kyoto, or if in a national park
about activities or questions about the local flora and fauna. It is thus
inappropriate for a hotel to expect guests to pay a higher room rate
and then to pay most of its staff the minimum wage. A tourism
strategy must aim to raise wages in the industry, and for that there
needs to be investment in the appropriate hotel infrastructure.
The restaurant industry is one of the only sectors in Japan that has
successfully met the great diversity of consumer needs, ranging
from Western cuisines and ethnic cuisines to Japanese cuisine, andrunning from the expensive all the way to the very cheap. Sushi, forexample ranges from the cheap conveyor-belt sushi restaurants tothe very expensive high-class ones in Ginza. Many of the people
working in Japan’s restaurant industry have excellent language skills.
One of the greatest attractions for tourists in Japan is that you canenjoy such a variety of global cuisines at such a high level in a single
country. Among the many tourism resources in Japan, food is themost highly evaluated by overseas tourists. And not just forJapanese cuisine. Japan has perhaps the broadest range ofinternational food at the highest level of any country in the world. It
is thus wrong to promote only Japanese cuisine to the rest of theworld. There are amazing coffee shops and also excellent curryrestaurants in Japan. In Kyoto, there are so many excellent bakeries.
The hotel industry in Japan is not on the same level as therestaurant and pubs; nor are Japanese tour guides. Japan needs toredouble its efforts to achieve high profitability, as there is a hugeworld population out there. There is more than enough global
10 Japan SPOTLIGHT • July / August 2023

demand to support more profitable businesses.
Finally, there is the question of local government and overtourism. If residents of Kyoto cannot get on a city bus because there
are so many tourists from abroad, then why doesn’t Kyoto city
simply increase the number of buses? Over-tourism, in my view, iscaused by a lack of investment in infrastructure, mainly by local
authorities. In Italy, 20 million people visited Venice every year.
Venice has a population of around 60,000. In Kyoto, before Covid thenumber of overseas tourists was probably around 4 or 5 million atpeak, and there are many more than 60,000 residents. Relative to
Venice or London or Barcelona, Kyoto was absolutely not sufferingfrom over-tourism. Kyoto rather was suffering from a lack ofinfrastructure investment and an insufficient response to bottlenecks
highlighted by tourism. The local government was the cause of any
inconvenience suffered by Kyoto residents when the number oftourists increased.

Concluding Remarks
Toyoda: In conclusion, could you all please give a key phrase orconcept for promoting Japanese tourism?
Okuda: Human resources, facilities and a virtuous cycle between
them.
Atkinson: Let’s make money.
Hoshino: I would strongly recommend to people all over the world to
see the changing landscape of tourism in Japan as the result of ourefforts to resolve the challenges we face.
Toyoda: Thank you very much, all of you. Tourism is undoubtedly arising industry in Japan and an important industry for Japanesepeople. I would like all of you to continue your valuable efforts topromote it.Written and translated by Naoyuki Haraoka, editor-in-chief of JapanSPOTLIGHT, with the cooperation of Tape Rewrite Co.