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Economy

Overseas tourists are changing the face of Japan

Visitors tame a rough Osaka neighborhood and breathe new life into ski resorts

Overseas tourists are changing the look of Osaka's Shinsaibashi-suji shopping street, where drugstore chains, encouraged by strong sales, have opened dozens of shops.   © Getty Images

OSAKA -- As international travelers flood into Japan, the face of Airin, a working-class district in Osaka, is changing.

Airin was long known as a town of day laborers who eked out a living doing odd jobs and stayed in flop houses. But as the decades passed, the business of offering cheap daily lodging grew more precarious as the local population aged.

Then came a boom in foreign tourists, mostly backpackers on modest budgets, and suddenly occupancy rates in Airin lodgings began to rise. Owners now had money to spruce up their interiors and cater to their new clientele -- offering tourist information in various languages and pulling in still more customers.

Airin is just one example of how an influx of visitors from overseas is changing local color across Japan. Elsewhere the surge of tourists is prodding towns to work together to attract visitors, driving the development of more transportation links to major airports and spurring century-old shops to update their systems to accept cashless payments.

Back in Airin, a family of four from Hong Kong, in Osaka for a six-day stay, raved about the neighborhood's convenient location. The Hotel Shin-Imamiya near the district is typically more than 80% full. "Our hotel, which offers easy access to railways, makes it easy for customers to make sightseeing plans," said manager Joshua Lyu. Travelers can reach Shin-Imamiya Station from Kansai Airport without changing trains. A quick transfer at Osaka Station gives easy access to such destinations as Kobe and Kyoto.

Airin's image was not always so traveler friendly. It had a reputation for being a rough part of town and was occasionally hit by riots. Lately there has been an influx of restaurants, luggage drop-off services and other businesses serving overseas visitors.

The tourism boom is reshaping the image of Osaka's Nishinari Ward, once known for its many day laborers.   © AP

Tourism is also reshaping the city's Chuo Ward, which is home to attractions such as Osaka Castle Park. The area's main shopping arcade stretches nearly 2 km. At its core is the Shinsaibashi-suji shopping street. A quick survey of the main street revealed 37 drugstores offering over-the-counter medicines and beauty items, mostly to overseas visitors. If side streets are included, the number is perhaps twice that.

The tourism wave is breaking in the countryside as well. Otari, a sparsely populated village in the mountains of Nagano Prefecture, is thronged in winter with foreign visitors who come for the powdery snow of Tsugaike Kogen Ski Resort. The spot drew 44,000 overseas tourists in the 2018-2019 season, up 80% compared with two years earlier. The number of visitors from abroad was 14 times greater than the population of the village.

"Regional cooperation has worked," said Yoshiaki Nakamura, mayor of the village. Otari is adjacent to the village of Hakuba, which is world-renowned as a major venue of the 1998 Nagano Winter Olympics. Otari has joined hands with Hakuba and Omachi, a nearby city, to conduct publicity to promote their ski resorts, which they collectively call "Hakuba Valley."

Hiroshi Wada, president of Hakuba Resort Development, which operates three ski resorts in Tsugaike Kogen and Hakuba, said: "Among the three, Tsugaike has seen by far the highest growth in the number of foreign visitors." Hakuba is popular with Australians, Wada said, while Tsugaike, which offers easier skiing, is popular with Asians, more of whom are beginners.

Ski Japan Travel, a Hokkaido-based operator of ski tours, said that the Hakuba area is the second-most popular Japanese ski destination among foreign tourists, behind Niseko in Hokkaido.

Tsugaike Kogen Ski Resort in Nagano Prefecture attracts many foreign guests in winter.

Overseas tourists are bringing change to venerable hot spring resorts as well. Ikaho Onsen, a hot spring spot in the city of Shibukawa, Gunma Prefecture, 120 km northwest of Tokyo, features a shopping street with 365 stone steps. There are many diversions, including an array of souvenir shops and a shooting gallery. These days, many stores have banners proclaiming that they accept cashless payments.

"Not a single day goes that I don't see foreigners," said Sanae Kobayashi, who runs Sumiyoshiya, a souvenir shop that has been in business for more than 100 years. In March, the store introduced several cashless payment systems, including Alibaba Group Holding's Alipay. Many visitors to Ikaho come from Singapore and Thailand, but, said Kobayashi, "The people I see far most often are Taiwanese."

The reason for the town's popularity with Taiwanese? In April 2018, Fo Guang Shan, a Buddhist sect based on the island, opened a large temple in a suburb of Shibukawa. The temple has been designated chief of the group's six temples in Japan. Fo Guang Shan says it has 5 million followers worldwide, and the newly built Hosui Temple was visited by 50,000 worshippers in its first year.

Kan-etsu Transportation, a Shibukawa-based bus company, now offers nonstop service between Narita Airport and the temple, which has encouraged many Taiwanese travelers to visit.

More extensive transportation networks are also boosting tourism in the Hokuriku region, in the northwest of Japan's main island of Honshu. The city of Kanazawa drew 720,000 overseas visitors in 2018, the largest number of any city in Hokuriku and a rise of 50% compared with 2016, according to data compiled by a subsidiary of wireless carrier NTT Docomo. Kanazawa owes its popularity to its many scenic spots, including Kenrokuen -- considered among Japan's most beautiful gardens -- and Higashi Chayagai, a historic entertainment district with beautifully preserved chaya teahouses where geisha once performed.

Kanazawa's Higashi Chayagai, a historic entertainment district where a number of chaya teahouses are beautifully preserved, is popular with Japanese and foreign visitors alike.

Traffic in Kenrokuen reflects the rise in tourism in the city as a whole. The number of visitors to the garden surged after the Hokuriku bullet train line was extended to Kanazawa in March 2015. By 2018, tourist numbers were up 90% versus four years earlier. Roughly 40% of the gain came from Taiwanese.

In January 2018, discount airline Tigerair Taiwan began flights to Komatsu airport, the gateway to Kanazawa by air. There are now seven round-trip flights a week from Taipei to Komatsu, including those operated by EVA Airways. With Cathay Pacific Airways launching seasonal service between Hong Kong and Komatsu this spring, Kanazawa can expect to see more travelers from Hong Kong, too.

A surprise winner in Japan's international tourism sweepstakes is Oirase, in the northern prefecture of Aomori. In 2018, the number of foreign visitors to the town of 25,000 jumped 340% compared with 2016. Located on the northern tip of Honshu, it was not previously known as a tourist hot spot.

Yet Aeon Mall Shimoda, a big shopping center in the city became a tourist magnet. Although it is a fairly typical Aeon outlet, it is on the itinerary of package tours to Mount Hakkoda and the Oirase River, two major destinations in Aomori Prefecture. It makes a good place to rest and shop.

The mall was first included in package tours when regular flights from Tianjin, China, to Aomori began in 2017. Although the route is not operating at the moment, the mall was on the itinerary of optional tours for cruises calling at the port of Aomori in May.

"Our advanced cashless payment system is one factor behind the inclusion of the mall visit in the tour itineraries of foreign visitors," said a salesperson. The popularity of the mall shows that it is possible to cash in on tourism without being a place of great scenic beauty or historical significance.

Nikkei staff writers Shinya Yamada, Masaru Sawada, Yuki Keshiba, Haruki Kitagawa, Hiroshi Furuta and Yuta Kimura contributed to this report.

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