China group tours return to Japan but 'explosive spending' unlikely
23/08/2023 09:46
By Maki Shiraki and Rocky Swift
TOKYO, Aug 23 (Reuters) - Chinese group tours are back
in Japan but anyone banking on them arriving in droves and
splashing around cash like they did before the pandemic is
likely to be disappointed.
An ANA Holdings 9202.T flight on Wednesday evening brings
in the first package tour visitors from Beijing since China
lifted its pandemic-era restrictions on the trips to Japan and
other key markets including the United States.
But hopes the return of packaged tours will herald big
returns for department stores, hotels and restaurants in Japan
are clashing with a Chinese economy struggling to post
significant growth and Japan's controversial plans to release
treated wastewater from the wrecked Fukushima nuclear plant into
the sea.
"Chinese consumer sentiment is cooler than ever, and the
desire to save is increasing," said Sony Financial Group
economist Takayuki Miyajima.
Isetan Mitsukoshi 3099.T is expecting less "explosive
buying" at its department stores now that many high-end brands
are available within China, a spokesperson said.
Sightseeing operator Hato Bus also said it was
restarting Chinese-language tours in September but with smaller
vehicles.
Inbound tourism has become increasingly important to Japan's
economy, helping drive blistering 6% annualised growth in the
second quarter.
Before the pandemic, mainland Chinese - who largely prefer
to travel abroad in tour groups - accounted for the biggest
number of tourists to Japan. They also spent the most.
But since Japan eased its own pandemic border controls late
last year, the number of Chinese tourists has only recovered to
about 20% of 2019 levels, partly because of China's delay in
adding Japan to a list of approved nations for tour groups.
China also vehemently opposes Japan's plan to release the
Fukushima wastewater starting on Thursday, and many Chinese have
taken to social media to express their alarm about the safety of
Japanese seafood and produce. How this will affect tourism,
however, remains unclear.
The weaker yen has sparked a rebound in U.S. and European
tourists that is exceeding pre-pandemic levels, but with their
own currency also weaker, the exchange rate doesn't appear to be
a drawcard for Chinese tourists. Neither is the frenzied
shopping that was their hallmark, said CLSA Japan strategist
Nicholas Smith.
"There have been changes over the last few years to their
ability to buy Japanese products in China, so they don't
actually have to travel to do it," he added, referring to the
proliferation of shops selling these goods in the mainland.
Some Japanese retailers say the Chinese tourists who do
visit appear to be more discerning.
Komehyo 2780.T , a major retailer of second-hand luxury
goods, said sales to Chinese visitors have been on the upswing
since April, and Isetan Mitsukoshi is seeing a shift from mass
cosmetics purchases toward experience-based services.
"Now they are more likely to sit down for a skin
consultation and then buy products tailored to their needs," the
spokesperson said.
Japan Tourism Agency Commissioner Ichiro Takahashi told
reporters on Tuesday that Chinese group tourism is expected to
gain momentum through the September-October autumn months.
A severe labour crunch, however, may hamstring Japan's
ability to get the most out of this rebound. More than
three-quarters of restaurants and hotels reported a shortage of
temporary workers in April, according to the most recent survey
by researcher Teikoku Databank.
"Even if they want to accept Chinese group tourists, they
may not be able to," said Yayoi Sakanaka, a senior economist at
Mizuho Research & Technologies.
(Reporting by Maki Shiraki and Rocky Swift in Tokyo, Sophie Yu
in Shanghai; editing by Miral Fahmy)
((rocky.swift@thomsonreuters.com;))