Visiting Friends: Travel Between the US and Japan Significant to Economies of Both Nations

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by Grace Ruch

In the months following the March 11 natural and nuclear disasters in Japan’s Tōhoku region, two incongruous images characterized the extraordinary impact on the country’s economy: devastated factory yards, showing disruption of the nation’s manufacturing sector, and eerily serene empty hotels and tourist spots, revealing the struggles of the tourism industry and the reluctance of foreign visitors to stay in Japan. The bleak outlook was not limited to Tokyo hotspots, as the US tourism industry also braced for a contraction of guests from Japan, particularly in popular destinations such as Los Angeles and Honolulu.

Japan is the top Asia Pacific destination for American travelers, according to the most recent statistics from the US International Trade Administration. In 2009, a year where travel was down across the board due to the economic downturn, 1.5 million Americans visited Japan, accounting for 23.9% of all American travelers to Asia. Among US tourist destinations worldwide, Japan ranked seventh, barely edged out by Germany after being tied for sixth place the year before. In traveler spending, Japan ranked fourth as Americans spent a combined $4.8 billion, twice what was spent in China in the same period. For Japan, both the number of American guests and amount of money they spend are significant to its tourism industry.  According to the Japan National Tourist Organization, among incoming visitors to Japan in 2010, Americans ranked fourth after guests from Korea, China, and Taiwan, and was the largest group from outside the neighboring region despite geographic and linguistic distance.

The impact of Japanese travelers is even more significant to American tourism. In 2010, 3.4 million Japanese arrived in the US, up 16% from 2009, representing a reversal of a 5-year downward trend. Last year’s visitation numbers from Japan amounted to an overall 7% increase since 2003 (the earliest year the ITA report includes). While fewer in number than the record years in the mid-1990s, Japanese tourists ranked 4th after those from Canada, Mexico, and the United Kingdom, representing 5.7% of all incoming travelers. The United States is still considered a top destination among the Japanese. In 2010, it was the second most popular destination for Japan’s overseas travelers, trailing China by less than 350,000 visitors. The results of the recent Visa Global Travel Intentions Survey revealed that the US was the most popular future destination for Japanese respondents, with one third of respondents planning a visit to the US in the next two years.

Japanese visitors bring more money into the US economy than most other tourists. In 2010, Japan ranked second in expenditures after Canada, spending a total of $14.6 billion in the course of their stays. This accounted for a considerable 11% of total tourist dollars spent in the US, and is greater than the next five Asian countries (China, India, Australia, South Korea, and Taiwan) combined. This represents a boon to the American economy. As money spent in the US by foreign travelers counts as direct exports, tourism is considered the country’s largest service-sector export. It was because of this that in the 1960s, the Japanese government promoted outbound travel to its citizens in an effort to reduce trade friction. Today, travel and tourism account for 31% of all US services exports to Japan.

Despite the March 2011 disasters and present the high value of the yen (making a trip to Japan more expensive for Americans), reports are coming in that the impact on the tourism industries in Japan and the United States are not in as dire straits as initially feared.  Slowly, numbers of reservations for hotels and tours are recovering as overseas travel is becoming a way for Japanese to relieve stress following the disasters.  In Hawaii, for instance, Japanese tourist levels are expected to return to normal by the end of the year, well ahead of earlier predictions. Looking to the future, the VISA global travel poll ranked the United States, UK, and Japan as the top three destinations for world travelers. If history is any indication, chances are good that a significant amount of that travel will continue between the US and Japan.