Japan - Travel & Tourism: A developed tourist destination (Strategy, Performance and Risk Analysis)
Total tourist volumes in Japan increased at a CAGR of 1.9% over the review period (2012-16) to reach 341.9 million in 2016, and are expected to increase at a CAGR of 2.0% over the forecast period (2017-21) to total 377.5 million in 2021. Growth is predominantly attributed to the rising number of domestic tourists, government initiatives to promote the country as a tourist destination, and the increased arrival of tourists from Southeast Asian countries, including Thailand, Malaysia, and South Korea. The relaxation of visa policies by the government for Chinese tourists is also a key driver of growth.
Japan’s passenger airlines demonstrated strong growth in terms of seats available and sold. Over the forecast period, revenue will increase at a CAGR of 10.5%, from US$36.1 billion in 2017 to US$54.0 billion in 2021. The expected growth is attributed to the rise in revenue of low cost carriers from international routes to Southeast Asian countries, as well as the launch of new direct international routes.
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Car rental fleet size to increase over the forecast period
Growth in the car rental fleet size is primarily driven by the rise in the number of inbound tourists in Japan, along with governmental initiatives to promote Japan as a travel destination and investments to improve road infrastructure. The increasing number of domestic tourists is also a key contributing factor to increase demand for car rentals.
Revenue per passenger to increase over the forecast period
In Japan, the average revenue per passenger declined at a CAGR of -4.8%, from US$844.0 in 2012 to US$692.5 in 2016 due to the devaluation of the country’s currency. However, it is forecast to increase at a CAGR of 5.3%, from US$765.0 in 2017 to US$941.52 in 2021 with the rise in revenue per passenger for full service and low cost carrier airlines at a CAGR of 4.6% and 6.8%, respectively.
International arrivals witnessed exponential growth
Over the review period, Japan recorded exponential growth in inbound visitors, reflecting its advancing position as a global tourism destination. The total number of international arrivals increased at a CAGR of 30.2%, from 8.4 million in 2012 to 24.0 million in 2016, and is forecast increase at a CAGR of 10.6%, from 28.5 million in 2017 to reach 42.7 million by 2021. The sharp increase witnessed in international arrivals is due to the rise in tourism from South Korea and Taiwan. Visa relaxations for Chinese tourists also stimulated growth in packaged and individual tours from China.