Market – Japan

The ST Japan team is made up of 3 full-time employees working out of the Tokyo office (shared space with the Embassy Of Switzerland). 

	Masayo Oshio, Media Manager
Contact	+81 3 6450 2961 masayo.oshio@switzerland.com

	Yuko Makino, Marketing Manager
Contact.	+81 3 6450 2931 yuko.makino@switzerland.com

• ST market research page –– here
• ST Research Report 2023 –– Download here
• ST TMS 2017 –– Download here

Click here for an overview slide for each finalized activity that took place in 2023.

Outbound tourism is continuing to recover slowly with Switzerland still being the strongest selling destination in Europe. Exchange rate (Yen is still on a all-time-low), flight and hotel capacities remain a challenge. The Travel Trade is registering positive signs, with bookings for 2024 nearing the 2019-level. The luxury and millennials markets are recovering the quickest in Japan. 2024 will be the first fully operational year, as Covid restrictions in Japan were fully lifted only in May 2023.
The current geopolitical turmoils are worrying the Japanese traveler (which result also in the rerouting of the flights, making them longer). Inbound travel to Japan is reaching record highs, reducing the capacity on outbound flights at an early stage. However, flight capacity to Europe seems to increase, ANA will resume its Vienna route as well as increasing the Munich and Paris routes to daily service.

Japan remains the third largest economy. Its GDP grew by 1.7% in 2021 and has not fully recovered to pre-pandemic levels yet. The government has further expanded its fiscal policy with immense assistance during the pandemic. Debt stands at close to 260% of GDP and is held domestically for the most part. In 2022, inflation rose above 2% for the first time since 2008. Even in light of a significant depreciation of the Yen, the Bank of Japan has maintained its loose monetary policy. By mid-November 2022, the Yen hit a 40-year low to the Swiss Franc and a 35-year low towards the US Dollar, it has still yet to recover. The new Prime Minister Fumio Kishida advances an agenda of „New Capitalism“. He seeks to enhance growth and distribution, including with a shift from savings to investments, wage raises and ambitious targets in human capital, science, start-ups as well as green and digital transformation. He accelerated efforts in economic security, including by diversifying supply chains. Japan has significantly expanded its network of free trade agreements. In a shift in
foreign economic policy priorities, it increasingly coordinates with like-minded partners and seeks to shape standards in fields such as economic security, supply chain resilience or digital and green economy. It continues to proactively promote exports of agricultural products and infrastructure, and attract investments.

With Covid restrictions being fully lifted since May 2023, the travel industry got the much needed upswing. Bigger players in the market have had a comfortable time during the Covid restrictions as they took over Covid and quarantine related tasks for the government. These travel agents
show now rush in pushing outbound business. At the same time, middle sized and smaller agents have gone full steam ahead with organizing and realizing tours aboard. Up until December 2023, Japan has been pushing and subsidizing domestic travel with a „Go To Travel“ campaign. Residence enjoyed up to 50% discounts on domestic hotels and other tourism products. This incentive is no longer applicable now and will for sure help outbound travel.
Inbound tourism to Japan has resumed in the fall of 2022 and has already reached 2019-level numbers. This much needed stimulus for the travel industry also brought of shift in the mindset of travelers. Seeing foreigners returning to Japan has eased the Covid fear which was still very present.
Key trends in the travel industry in 2023:
▪ Pent up demand meets challenging currency exchange rates
▪ Low-cost destinations will suffer over-proportionally due to the weak Yen.
▪ In Europe, Switzerland has shown to be the strongest selling post Covid destination.
▪ FIT and group travel is looking to return at equal speed.
▪ Young people will be the drivers in the comeback of international travel in the long run.
▪ Autumn and winter travel are expected to gain market share.
▪ Increase in importance of OTA compared to classic travel agents is expected

The Japanese have cautiously re-started travelling in 2022/2023. Until end of 2023 the focus was on domestic travel and close by-destinations in Asia plus Hawaii. European travel is clearly on the cards for 2024. Key Accounts in the market report that bookings for 2024 are already on a good level and 70-80% compared to 2019. So far Switzerland has been the bestselling destination within Europe.
The first wave of travelers will be seniors who feel the pressure to travel „now or never“. This trend will be followed by the younger generation who will lead the longer-term growth. However, the weak Yen and the still not ideal flight connections are slowing down the booking for overseas travel. A clear focus on the upper middle to high income class will be crucial for the coming years.

ST Japan focuses primarily on the personas Max, Quinn and Kris. Find more information about the personas here.