Coronavirus outbreak takes toll on Japan tourism industry

January 27, 2020

Tokyo--Japan's tourism industry is bracing for the effects of China's ban on overseas group tours introduced on Monday in the wake of the outbreak of pneumonia blamed on a new strain of coronavirus.

The travel ban came as China's Lunar New Year holiday period, a usually profitable season for the Japanese tourism sector, has started.

Travel agencies, including industry leader JTB Corp., are already seeing mass cancellations by Chinese clients. "We are flooded with cancellations," said an official at a travel agency in Sapporo, Hokkaido, northernmost Japan, which offers tours for inbound clients.

Cancellations are also on the rise at a major hotel in Shinjuku Ward in Tokyo that is popular among foreign guests.

The Nishijin Textile Center in the city of Kyoto, western Japan, which hosts a daily kimono show, said it has seen cancellations by tour groups of about 40 Chinese travelers. "I hope the situation will calm down before the cherry blossom season" in spring, Yuzuru Otsuki, head of the center, said.

Department stores and electronics shops have so far not seen a dent in sales, as Chinese visitors who came to Japan before the pneumonia outbreak have buoyed business.

But they are concerned about an imminent drop in Chinese customers, with an official of major department store operator Takashimaya Co. <8233> saying, "The effects (of the travel ban) cannot be evaded."

Of the 31.88 million foreign visitors to Japan in 2019, those from mainland China stood at 9.59 million, making up the largest share, according to data from the Japan National Tourism Organization. Combined with South Korean visitors, at 5.58 million, travelers from the two countries accounted for nearly half of the total.

With travelers from South Korea already plunging amid frayed relations between Tokyo and Seoul, a continued drop in Chinese visitors would have a deep impact on the Japanese tourism industry, pundits said.

"The spreading outbreak of the new coronavirus has come at the worst possible time for the Japanese economy" as the country is gearing up for the Tokyo Olympic and Paralympic Games this summer, Toshihiro Nagahama, chief economist at the Dai-ichi Life Research Institute, said. Jiji Press