Global travel and experiences remain robust in 2024, with Japan emerging as the top trending destination in Asia post-pandemic.1 Although visitor arrivals from mainland China — the largest source of tourists for Japan — are still below 70% of pre-pandemic levels, Japan’s total visitor arrivals in the first half of 2024 have already exceeded 2019 figures over the same period.

This surge in tourism is fueled by pent-up demand, a favorable exchange rate for the Japanese yen, and more active airline routes. With the Japanese government aiming to double the annual number of foreign visitors to 60 million by 2030 (compared to 2023 levels), the Mastercard Economics Institute (MEI) anticipates further developments in the tourism sector to accommodate this increase in travelers in the coming years.

Where are the tourists from and what are they spending on? To unpack how Japan’s tourism trends are shifting, let’s start by reviewing the latest set of aggregated and anonymized data and insights from the MEI. Here we address a few of the key shifts in tourism trends in Japan.

The United States, Canada, Australia and Singapore are the top growth drivers of inbound arrivals to Japan

Pre-pandemic, Northeast Asian source markets heavily dominated inbound arrivals at ≈70% of all visitors. The Chinese mainland was the top source market, accounting for 30% of Japan’s visitors, followed by South Korea (18%), Taiwan (15%) and Hong Kong SAR (7%). While Northeast Asian source markets remain important in 2024, data for the first half of 2024 reveals greater traction in the growth of visitor arrivals from North America and elsewhere in the Asia-Pacific. This suggests airlines have been growing their flight corridors with comparatively smaller markets.

Visitors from Western countries spend a greater share of wallet on accommodation while visitors from Asian countries prioritize retail therapy

The chart below illustrates the spending patterns of visitors to Japan, broken down by their source market. Generally, travelers from Asia allocate a larger portion of their budget to retail and shopping compared to visitors from Western countries, who spend more on accommodation. Here’s why:

  • Visitors from North America and Europe are often traveling to Japan for the first time and tend to stay longer, leading to higher expenditures on accommodation and dining, as noted in official Japanese government surveys.
  • On the other hand, the lower cost of airfare and shorter flight times from East Asia enable these travelers to make frequent short trips to Japan. This type of travel encourages spending on retail, resulting in a higher share of their budget going towards shopping.

Additionally, foreign exchange (FX) rates have influenced tourist spending priorities. The weak Japanese yen has boosted spending, particularly in retail. In 2024, compared to 2019, there has been a noticeable increase in the retail share of spending for many tourists. This is most pronounced among tourists from Singapore, the U.S., Europe, and the U.K., where the currencies have strengthened significantly against the yen, enhancing their purchasing power compared to pre-pandemic levels.

In terms of length of stay between Q3 2023 and Q2 2024, according to an official survey :

  • Visitors from South Korea were most likely to take very short trips, with 23% of them staying less than three days between Q3 2023 and Q2 2024.
  • Over half of the visitors from South Korea, Taiwan, and Vietnam stayed for 4 to 6 days.
  • In contrast, visitors from Europe tended to stay much longer, with over 40% of them visiting for 14 to 20 days.

Japan is facing an uneven distribution of tourists across the country

Recent news reports have highlighted a trend of overtourism in Japan, but our analysis reveals that the real issue is the high concentration of visitors in just four major cities. We examined the monthly number of foreign hotel guests by prefecture and major city, as well as the ratio of foreign tourists to the local population. We used bubble size to represent the number of foreign guests and bubble color to indicate the ratio of foreign tourists, with red highlighting areas where this ratio is around 40% or higher. Our findings show that a large portion of foreign hotel guests are concentrated in a few key areas: Kyoto, Tokyo, Osaka, and Okinawa, which are well-served by international flights.

In April 2024, Kyoto had the highest proportion of foreign guests, with 68% compared to Tokyo’s 36%. Outside these main cities, the foreign guest ratio typically falls below 10%. This marks a significant increase from 2019, when Kyoto and Tokyo had average foreign guest ratios of 38% and 17%, respectively.

On a positive note, Japan has many other destinations that are increasingly attracting foreign visitors. Destinations like Ishikawa, Fukuoka, and Nagano are seeing growing interest. Improving travel connectivity between international airports and these emerging destinations will be crucial for distributing tourists more evenly across the country. Enhancing tourism infrastructure in these areas will help Japan move towards its goal of welcoming 60 million international visitors annually by 2030.

To learn more about economic insights from the Mastercard Economics Institute, contact your Mastercard representative or request a demo.

Notes & Disclaimer

About the Mastercard Economics Institute

Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights - including Mastercard SpendingPulse™ - and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.

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Footnotes

  1. Based on changes in share of bookings as per the 2024 MEI Travel Report↩︎