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Economy

Foreign-tourist spending picking back up in Japan

Influx of budget travelers seen giving economy a fresh boost

Though spending by visitors to Japan is down per person, the overall figure has risen.

TOKYO -- After a drop-off in shopping sprees by Chinese tourists, spending by visitors to Japan from abroad seems to be bottoming out as more people take advantage of affordable travel options.

Department store operators Isetan Mitsukoshi Holdings, J. Front Retailing, Takashimaya and H2O Retailing see aggregate sales of tax-free goods to foreign shoppers growing 20% to 161 billion yen ($1.44 billion) this fiscal year. This would top the 146 billion yen seen during fiscal 2015, when Chinese tourists flocked to big-ticket items.

Visitors to Japan from overseas spent about 1.4 trillion yen on shopping in calendar 2016, data from the Japan Tourism Agency shows. This was boosted by the recovery at the four big department store chains, which account for 10% of the total.

Year-on-year growth in monthly tax-free sales at department stores nationwide turned positive in December, with sales in March jumping 25% to 19.6 billion yen, according to a survey by the Japan Department Stores Association. The upturn was driven mainly by increased foot traffic.

Foreign travelers increased 9.8% on the year to about 2.2 million in March, with records set for the month for a number of nationalities, including Chinese, South Koreans, Thais and Malaysians. Visitors had tended to skew affluent, but expanded service on low-cost carriers and the broadening array of travel packages that use these airlines have made Japan a more appealing option for those with lower budgets as well.

Spending per traveler at department stores topped 80,000 yen at one point in 2015 before falling off. It had recovered to the upper 60,000 yen range by late last year. Though the trend of big-spending Chinese tourists looks unlikely to recur, the higher number of visitors is making up for it.

Electronics retailer Bic Camera's tax-free sales began rising on the year in January, with growth averaging around 5% between January and March. Sales had plunged 30% last summer, but the decline slowed and eventually reversed.

Leisure facilities are benefiting as well. Foreign visitors account for a growing share of guests at Oriental Land's Tokyo Disney Resort. The figure increased from 1.3% in fiscal 2011 to 8.5% in fiscal 2016 and is expected to climb further this fiscal year.

Foreign guests staying at Japanese hotels and inns rose 8% to a record 70.88 million last year, according to the Japan Tourism Agency, while overall spending totaled roughly 3.7 trillion yen. Further growth would benefit a wide swath of the economy.

(Nikkei)

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