Japan’s tourist boom hurt by coronavirus epidemic woes

Coronavirus crisis is threatening to silence Japan’s tourist boom. China has banned group tours after coronavirus outbreak. Chinese tourists was acting like a pillar of Abenomics for Japanese tourism sector. Japanese hotels, travel agents are squeezed and it weakens Japan economy further.

The restaurants at the Exitmelsa shopping centre in Tokyo’s upscale Ginza district are usually packed with Chinese tourists. But on a recent weekday, many lunchtime tables were empty, a sign of the toll that the coronavirus is taking on tourism.

For Japanese who have grown dependent on Chinese tourists for business, like waiter Kiyotake Watanabe, it marks a disconcerting trend.

“People on group tours would gather together at noon, and 10 or 20 of them would come in all at once,” Watanabe, who works at a Chinese restaurant in the shopping centre, told Reuters. Those customers evaporated after China in January banned overseas group tours.

Just months ahead of the 2020 Olympics, the jolt to tourism may presage a broader economic impact from the coronavirus for both Japan and the global economy. Japan could be at particular risk because of its increased reliance on Chinese tourism under Prime Minister Shinzo Abe’s “Abenomics” policies. Nomura Securities had forecast a 240 billion yen ($2.3 billion) bump from event-related tourism in 2020, which it said would evaporate if the Olympics were cancelled, although organisers have said delaying or moving the games is not an option. Last year, Japan hosted 31.9 million foreign visitors, who spent 4.81 trillion yen.

The flu-like virus SARS-CoV-2 has spread to about 80 countries after emerging in central China late last year and has hurt global tourism, air travel and events. About 98,000 people have been infected and 3,300 killed worldwide.

Although most cases are in China, more new infections are appearing outside that country.

There are no official tourism figures from February yet, but an immigration services agency official told parliament on Friday that the number of foreign nationals who entered Japan in February was below 1 million.

The last time foreign visitor arrivals were below 1 million in a single month was six years ago, in February 2014, when there were 880,000, according to the Japan National Tourism Organization.

Some analysts - and anecdotal evidence from people in the tourism industry - also suggest that arrivals from Asia alone are likely to be down by at least half.

“You’ve got that negativity that is going to percolate through the system,” said Jesper Koll, a senior adviser at WisdomTree Investments.

The hit to economic growth from slowing inbound tourism could be a quarter of a percentage point or more, he said.

Reuters