Japan’s inbound tourism industry is on the rise, and one of the biggest and fastest-growing sources of visitors is China. According to the Japan National Tourism Organization, Japan welcomed more than 6.4 million visitors from China in 2016, more than a quarter of the total of 24 million, and 27.6% more than in the previous year. To tap this growing market, Rakuten LIFULL STAY last month announced a partnership with one of China’s leading vacation rental service providers, Tujia.

Rakuten LIFULL STAY Representative Director Munekatsu Ota (left) and Tujia Co-Founder and CEO Justin Luo (right) at a press conference in Beijing announcing the partnership.

Rakuten LIFULL STAY Representative Director Munekatsu Ota (left) and Tujia Co-Founder and CEO Justin Luo (right) at a press conference in Beijing announcing the partnership.

The collaboration is part of Rakuten LIFULL STAY’s strategy to partner with global players to bring its inventory to overseas travelers. Following on from collaborations with U.S.-based HomeAway and Taiwan’s AsiaYo, the agreement will see Rakuten LIFULL STAY’s vacation rental properties in Japan listed on Tujia’s platform and made available to its users in China to search and book.

As in Japan, vacation rentals are relatively new in China, but they are catching on quickly. Market leader Tujia was founded in December 2011, and now offers around 500,000 vacation rental properties on mainland China alone. It has also been expanding throughout Asia, including Taiwan, South Korea, Thailand, Malaysia, Singapore and Indonesia, and in March 2017, opened a Japanese language version of its website. Tujia aims to offer more than 200,000 property listings in Japan by 2025.

For Rakuten LIFULL STAY, the partnership will allow the company to expand its user base in Asia and give the company access to the crucial Chinese market. “Through sales promotion activities leveraging Tujia’s marketing strengths, we hope to attract more visitors from China and expand demand for inbound travel,” said Munekatsu Ota, representative director of Rakuten LIFULL STAY, speaking at a press conference held in Beijing to announce the partnership on August 22.

And for Tujia, Japan’s popularity as a destination makes it a key to global expansion. “Japan is the most popular tourist destination for Chinese visitors. It has history and many unique tourist attractions,” said Justin Luo, co-founder and CEO of Tujia. “For us, it is the most important market for us to expand into overseas.”

But what is it that makes Japan such a popular destination for Chinese travelers? The spurt in visitor numbers has been aided by the Japanese government’s easing of visa restrictions requirements for Chinese travelers in recent years but it’s worth looking more closely at the many different drivers of growth.

According to Li Xin, Vice CEO of Rakuten Travel China, a group company offering comprehensive travel services, one reason is Japan’s reputation for quality. “As well as sightseeing, shopping is one of the major reasons for traveling to Japan. Chinese visitors are after high-quality goods, and Japanese products are known for their quality, so as well as trips to traditional tourist spots like Kyoto and Nara, Chinese visitors also like to stop by Osaka and Tokyo to buy good quality Japanese products, like electronics and cosmetics, at a good price,” said Xin.

Xin notes that Japan’s proximity and convenience are also key factors. “If you look at China, the coastal areas are the main areas that are developed and wealthy. The north of China is snowy, and the west is too far away. From the coast, Japan is just a three to four-hour trip, whereas going to southeast Asia will take five or six hours.”

The collaboration between Rakuten LIFULL STAY and Tujia is due to start once the recently passed Private Lodgings Business Law comes into effect, which is expected to happen in January 2018. If current data for 2017 visitors from China is any indication, demand will continue to increase.

As the opportunities for travel open up, the heads of both companies believe their collaboration offers more than just a solid business return, and see vacation rentals playing a role in deepening friendly relations between China and Japan.

“By working together and leveraging the strengths of each company, we hope to acquire good properties and provide a great service to Chinese visitors, giving them the opportunity to deepen their understanding of Japanese culture,” said Ota.

“Our current customers want to experience local culture,” said Luo. “And I believe it is vacation rentals, not hotels, that give us the chance to understand local culture and history.”