Individual tourist expenditures in Japan during the inbound tourism boom period (2015–2017): Empirical evidence from micro survey data

• Published date: 01 December 2023
• Author: Yoichi Matsubayashi,Yoshihisa Inada
• Date: 01 December 2023
• DOI: http://doi.org/10.1111/asej.12314

ORIGINAL ARTICLE

Individual tourist expenditures in Japan during the

inbound tourism boom period (2015–2017): Empirical

evidence from micro survey data

Yoichi Matsubayashi

1

|Yoshihisa Inada

2

1

Graduate School of Economics, Kobe University, Kobe, Japan

2

Asia-Pacific Institute of Research, Kita, Osaka, Japan

Correspondence

Yoichi Matsubayashi, Graduate School of Economics, Kobe University, Kobe, Japan.

Email: myoichi@econ.kobe-u.ac.jp

Abstract

This study empirically examines the characteristics of demand generated by inbound

tourism (inbound demand) in Japan in the 2010s using individual data from the Con-

sumption Trend Survey for Foreigners Visiting Japan. This is the first study to investigate

the detailed characteristics of inbound consumption during Japan’s inbound boom period

using individual micro survey data. One of the main findings is that household income

and the exchange rate significantly affect inbound demand. This is especially true for

inbound demand by visitors from Asian countries, whose main purpose for visiting

Japan is shopping. Another main finding is that visa relaxation effectively increases the

number of tourists from China. The third finding is that the payment environment in

Japan, including the use of credit cards, has a significant impact on inbound demand.

These findings provide an in-depth insight into inbound demand as a potential engine for

future economic growth in Japan.

KEYWORDS

cashless payment, inbound demand, micro survey data, visa relaxation

JEL CLASSIFICATION

L83, N75, F14

1|INTRODUCTION

Amid rising concerns about long-term stagnation in Japan, demand generated

by inbound tourism (hereafter, “inbound demand”) is expected to become a new

engine for economic growth. The Great Recession in 2008 and the Great East

DOI: 10.1111/asej.12314

© 2023 East Asian Economic Association and John Wiley & Sons Australia, Ltd.

Received: 6 August 2022; Accepted: 26 November 2023

492 Asian Econ. J. 2023;37:492–518.

wileyonlinelibrary.com/journal/asej

Japan Earthquake in 2011 led to a temporary decrease in the number of interna-

tional tourists, promoting a decline in consumption. However, this started to

change soon thereafter: between 2012 and 2015, inbound tourism increased

steadily. During that period, the annual growth rate of inbound tourism reached

nearly 40%. Since 2016, the annual growth rate of inbound demand has slightly

decreased. Then, in 2020, the COVID-19 pandemic caused a sudden drop in

inbound demand. Fortunately, in 2023, it is currently showing signs of recovery.

Figure 1shows the level of consumption by foreign visitors in Japan from 1994

and 2022 and its rate of change.

The number of foreign visitors to Japan began to increase rapidly in the

2000s. Until then, there was little academic interest in inbound demand. How-

ever, closely examining the micro- and macro-factors underlying the strong

inbound demand is crucial in envisioning Japan’s future tourism strategies.

In light of this, this paper empirically examines the characteristics of

inbound demand in Japan in the 2010s using individual data from the Con-

sumption Trend Survey for Foreigners Visiting Japan (abbreviated as CTSFVJ).

This is the first study to examine in detail the determinants of inbound demand

in Japan using individual microdata, and it offers fresh insights into inbound

demand.

The remainder of this paper is structured as follows. Section 2overviews

existing research on inbound tourism. Section 3describes the data and empirical

methods employed in this study. Section 4discusses the empirical results.

Finally, Section 5concludes the paper.

FIGURE 1Consumption patterns of foreign tourists in Japan 1994–2022. The dotted line in

the chart shows the growth rate compared to 2019. Source: Cabinet Office. [Color figure can be

viewed at wileyonlinelibrary.com]

ASIAN ECONOMIC JOURNAL493