Japan’s tourism industry battered again in Golden Week holidays

The Yomiuri Shimbun

15:54 JST, May 2, 2021

For the second year in a row, the tourism industry is being battered by the pandemic amid the Golden Week holidays, as parts of the nation are under a state of emergency during what is supposed to be one of the busiest seasons in Japan.

There has also been a series of bankruptcies among small and midsize businesses with limited financial resources, raising concerns about the impact on local economies.

More than half the souvenir shops and restaurants along the paths to Kiyomizudera temple in Kyoto’s Higashiyama Ward were closed Saturday, the first day of the holiday period. This key tourist attraction is located in Kyoto Prefecture, one of the areas currently under a state of emergency.

“We’re seeing less than one-hundredth of the normal level of customers,” said a man in his 70s who runs a souvenir shop. “Even if we open our shop, we can’t cover our fixed costs.”

Golden Week is normally one of the three busiest periods for the tourism industry, along with the Bon summer holiday season, and the year-end and New Year’s holidays.

However, following the first declaration of a state of emergency last year, the total number of people who used accommodation facilities nationwide in May 2020 fell by 84.9% from the same month in the previous year.

At the year-end and over the New Year’s holidays, the government’s Go To Travel tourism campaign was halted nationwide, sending the number of people using hotels and inns down by 59.9% in January this year.

Even with the Tokyo Olympics and Paralympics scheduled for this summer, expectations have slumped within the tourism industry.

Andon Ryokan, an inn located in Taito Ward, Tokyo, spent about ¥20 million on renovations ahead of the Tokyo Games. Due to the decline in guests due to the pandemic, however, they had to borrow another ¥20 million as operating funds.

“The accommodations business is on the verge of dying,” said Toshiko Ishii, 64, who runs the inn.

According to Teikoku Databank, Ltd., there were 1,401 pandemic-driven bankruptcies as of April 30. Hotels and inns saw the third-highest number with 87 bankruptcies. Taxis and buses had 20 bankruptcies, and travel agencies had 19.

These numbers climb even higher if businesses that closed down voluntarily are included.

Evaporating demand

A drop in tourists also affects such related businesses as those that deliver bed linens and toiletries, as well as local transportation providers.

“Most of the hotels and inns with which we have contracts are closed, and demand for the Golden Week holidays has evaporated,” said a man who runs a linen company in Osaka Prefecture, which is also under a state of emergency. “Our sales are not even 30% of what we used to make before the pandemic,” he said.

The government has made up part of the money lost by travel agencies and hotels that are receiving cancellations from customers using the Go To Travel campaign. It has also asked business operators to share this money with their contractors.

The linen company has contracts with about 200 hotel and inn operators, but “only about 10% of them have offered to share the money,” the man running the business said.

The tourism industry supports local economies. According to the Japan Tourism Agency, travel consumption in 2018 amounted to ¥27.4 trillion, and its ripple effect on the economy totaled ¥55.4 trillion, while 4.41 million jobs are estimated to have been created as a result.

“The decline of the tourism industry could lead to a decline in local economies,” said Keiichi Tsujino, a specially appointed professor of tourism industry studies at Ryutsu Keizai University.

Striving to bounce back

Some business operators are trying to overcome the difficult situation.

Hotel New Otani Tokyo on April 26 launched a service in which it expanded the number of alcoholic beverages available for room service to 300, including cocktails and sake, from the previous menu of only 10 types of wine.

With a sommelier and bartender dispatched to rooms, users can enjoy a restaurant-like atmosphere at a time when establishments serving alcohol are required to close under the state of emergency.

Alternative Farm Miyako, a farm in Miyakojima, Okinawa Prefecture, that offers tourists workshops to make brown sugar, conducted an online tour on Saturday.

Reservations for the physical workshop at the farm during the Golden Week holidays fell to about one-fifth the average for this time of the year. However, operator Katsuya Matsumoto, 47, said, “I hope the online experience will inspire people to actually visit our farm someday in the future.”