Why Japan’s Plan to Grow Tourism Just Might Work

In Japan, April is synonymous with beginnings. It marks the beginning of the financial year; the beginning of the academic calendar; and if you have ever visited the country in April, your photo albums are undoubtedly filled with pictures of cherry blossoms. So, it is fitting that Tokyo would host an event aimed at discussing “starts”.

Startups and kick-starts are at center stage at New Economy Summit Tokyo (NEST), an annual event hosted by the Japan Association of New Economy (JANE), a business group that believes in the power of disruptive innovation to drive growth. Business, economic, and political leaders from around the world gather here to discuss what drives innovation and how to implement effective policies and practices in Japan.

In the final session of the two-day event that ran from April 7-8 this year at Tokyo’s New Otani Hotel, influencers looked at the challenges Japan’s tourism industry will face as it seeks to achieve ambitious growth targets. The panel included top minds from Japan’s travel, media, and real estate industries, including Takashi Inoue, CEO of NEXT, Co., Ltd.; Takanobu Yamamoto, head of Rakuten, Inc.’s Travel Business; the Wall Street Journal’s Tokyo Bureau Chief, Peter Landers; and CEO of Hoshino Resorts, Yoshiharu Hoshino.

Kei Shibata, Co-Founder and CEO of Venture Republic Inc, was the moderator of the session and began by laying out the government’s stated goal: to grow the number of inbound tourists from the current rate of around 20 million per year to 40 million per year by 2020 and 60 million by 2030. JANE proposes even more aggressive targets of 80 million visitors by 2020 and 100 million by 2030, which would make Japan the world’s top tourist destination based on today’s numbers. JANE predicts that this would pour 30 trillion Yen (roughly US$300 billion) into the economy, surpassing the total of Japan’s traditional economic engines, including the behemoth automotive industry.

Hoshino, who has lead the expansion of his eponymous resort operator since 1995, said he has thought long and hard about the numbers and believes that these goals are impossible if the travel industry continues to do things the way they have always been done. Never one to shy away from a challenge, Hoshino added, “We need to think of different approaches. We should look at Hokkaido, where Australians will come to ski for 2-3 weeks; or medical tourism, where someone might spend 6 months in Japan seeking treatment; or working holiday programs. We need to encourage more people to come, yes, but we need to encourage them to stay longer.”

Hoshino Resorts has been on the frontlines of innovation in the Japanese hospitality industry and, in 2015, began a trial that allowed foreign guests with small tattoos to cover them with temporary body stickers, allowing them to enjoy Japan’s famous onsen hot springs, where people with tattoos are typically blocked entry due to a traditional association with organized crime in Japan. Hoshino said that despite taking a lot of flak from other hot springs proprietors, he is pleased with the results of the six-month long trial and plans to expand the program.

Rakuten Travel’s Takanobu Yamamoto suggested that Japan needed to do more to expand the availability of free Internet, suggesting the nation prepare 300,000 mobile wifi hotspots for visiting foreign tourists. He is confident that the enhanced connectivity would improve the overall experience of travelers as they have better access to information and would be more likely to share highlights of their visits on social media.

Takashi Inoue represents the operator of one of Japan’s top real estate search engine and information sites, Home’s and had a number of “outside-the-box” ideas, including the use of virtual and augmented (VR/AR) reality technologies to enhance travel experiences. VR would help promote travel, while AR would provide an even richer travel experience. Rakuten Travel and Rakuten Wedding have already begun to experiment with VR technologies in this field.

Perhaps the most topical issue on many people’s minds was the expansion of the “AirBnB model” of private accommodation rentals. Japanese regulators are currently caught in a tug-of-war between hotel operators less than eager to face a new competitive front, local home owners and international travelers, who have grown accustomed to AirBnB and similar services in other markets. In the midst of this ongoing debate, the panel here concurred that this new development could be viewed as an opportunity, rather than a threat.

Can Japan become the world’s number 1 travel destination by 2030? As Japan is not yet in the top 10 in the world, the target could be seen as wildly ambitious. Nevertheless, time and time again, Japanese industry has overcome long odds on the road to success, so you might not want to bet against the Land of the Rising Sun as a world-class travel destination.