Photo/Illutration Crowds of foreign tourists fill Kuromon Market in Osaka on Dec. 30, 2024. (Yoshinori Mizuno)

The Asia Pacific Institute of Research is warning that overtourism could morph into a more serious issue if the government's target of 60 million foreign tourists in 2030 is reached. 

A survey by the Kansai-based think tank showed that Japan could face a shortage of 536,000 workers in the accommodation and food service industries, estimating that the number of workers in those roles in 2030 will be 1.9 percent lower than that of 2024 due to population decline. 

On the other hand, tourism demand is expected to increase by 15.6 percent. The institute foresees productivity in these sectors would need to increase by 2.8 percent annually to fill this gap in labor.

The institute instead recommends lowering the target number of overseas tourists to 40 million and focusing on increasing per capita spending. 

“Rather than focusing on sheer numbers of foreign visitors, we should encourage them to spend more,” said Yoshihisa Inada, professor emeritus at Konan University, who led the research.

Inada and the institute recommend the government scale back its goal to 40 million visitors and slow the growth of inbound tourism.

Were the target number of foreign tourists lowered to 40 million and the same conditions applied, the number of visitors would still be 8 percent higher than in 2024, while the labor shortage would shrink to 138,000.

A more modest 0.7 percent annual productivity increase would be enough to meet tourism demand.

In terms of revenue, the government aims to generate 15 trillion yen ($101 billion) in inbound tourism spending in 2030.

To achieve this with 40 million tourists, each traveler would need to spend 375,000 yen―around 1.7 times the 227,000 yen per visitor in 2024. Reaching this target won’t be easy.

However, Inada believes the target is achievable.

“If we enhance tourism offerings and increase spending per visitor, the target can be met,” he said.

He cited a 43.3 percent increase in spending per international visitor in 2024 compared to that of 2019 before the COVID-19 pandemic. 

Whether the foreign traveler target is 60 million or 40 million will not change the issue of labor shortages in the accommodation and food service industries

The institute emphasizes the need to improve productivity―such as reviewing service operations, adjusting job responsibilities and utilizing digital technology and robotics.

According to statistics from the Japan National Tourism Organization, the number of foreign visitors plummeted between 2020 and 2022 due to the COVID-19 pandemic but rebounded sharply in 2023.

In 2024, it reached 36.87 million, surpassing the pre-pandemic peak of 31.88 million in 2019.

Spending by overseas travelers hit 8.1 trillion yen in 2024, making it comparable in market size to the domestic apparel industry.

Meanwhile, concerns over overtourism are amplifying.

In Kyoto, for example, rising accommodation costs and congestion have driven domestic travelers away.

The number of Japanese hotel guests has seen double-digit declines for more than a year compared to the same months in the previous year.

The institute attributes the decline in domestic tourism partly to more expensive stay costs.

It recommends wage increases that outpace inflation.

The institute said that better wages and productivity improvements in the accommodation and food service industries would make inbound tourism more sustainable.

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