Japan's tourist numbers drop for first time in 5 years

Tokyo

THE number of foreign tourists to Japan dropped for the first time in more than five years during September, as an earthquake and typhoon brought a temporary halt to travel in some of the country's top destinations.

Tourist numbers fell 5.3 per cent last month from a year earlier, according to the Japan National Tourism Organization. This was the first year-on-year contraction since January 2013.

Visitor numbers from China, which accounts for the biggest portion of Japan's tourists, shrank 3.8 per cent in September, while tourism from South Korea fell 14 per cent.

Typhoon Jebi, the strongest tropical cyclone to strike Japan in 25 years, ripped through Osaka on Sept 4, flooding the country's third most-used airport and cancelling inbound flights for weeks.

Just days later, a magnitude 6.7 quake struck Hokkaido in northern Japan, killing more than 40 people and knocking out power to the entire island.

The twin blows to peak tourist destinations were the latest in a string of natural disasters from floods to heat waves that hit Japan this summer, something which had already weighed on tourist growth.

Japan tourism has soared over the past five years as a weakening yen has brought a record influx of tourists from overseas. Fewer visitors from China may partly reflect that country's economic slowdown.

That matters because China accounts for about a third of overall tourism to Japan. The number of Chinese tourists coming to the country grew at a double-digit pace over much of the past year until August, when growth slowed to 4.9 per cent.

Changes to Japan's minpaku, or home-sharing laws, have also made it harder for tourists to get Airbnb-style rooms.

Japan's tourism may be further dented by a crackdown by Chinese customs officials on travellers returning from places like Tokyo loaded with high-end merchandise.

Luxury-goods companies such as Japanese cosmetics maker Shiseido Co. have tumbled this month on concerns Chinese consumers will pull back on travel and spending plans.

Slower tourist growth is a concern for Japan's government, which has made tourism a centerpiece of economic policy.

Prime Minister Shinzo Abe aims to attract 40 million foreign tourists a year by the Tokyo Olympics in 2020 in the hopes of spurring growth. September's data could weigh on third-quarter GDP. BLOMBERG