The term “inbound” means “from outside to inside” or “inward.” This term is often used in the travel industry and, in this article, refers to overseas visitors and travel to Japan.

Since the end of restrictions related to the COVID-19 pandemic, the number of overseas travelers to Japan has rapidly increased. As a result, tourism development has risen in major cities and rural areas, and the participation of businesses in inbound business has become more prominent. In addition, as a result of a weak yen, demand from inbound tourists is higher than ever before. The market is expected to expand further in the future.

This article explains inbound demand in Japan, as well as future prospects and successful case studies.

What’s in this article?

• What is inbound demand?
  
• Trends and developments in inbound demand
  
• Future outlook for inbound demand
  
• Industries related to inbound demand
  
• Key points for encouraging inbound demand
  
• Successful case studies of businesses responding to inbound demand
  
• FAQs about inbound demand
  
• Preparing for inbound demand
  
• How Stripe Terminal can help
  

What is inbound demand?

“Inbound travel” refers to travelers from overseas visiting Japan and the travel itself. “Inbound demand” refers to visitors’ demand for Japanese products and services.

An example of inbound demand is “spending sprees.” Some drugstores and apparel shops in Japan offer tax-free shopping for electronics, cosmetics, clothing, and other consumables. This encourages inbound travelers to seek out these stores and spend more.

According to the Ministry of Economy, Trade and Industry, inbound demand is classified as a type of export when gross domestic product (GDP) statistics are compiled. In addition, inbound demand is characterized by providing nonexportable services and products—such as accommodations, tourist attractions, and dining—within Japan. Many predict that the more these domestic consumption expenditures increase due to inbound travelers, the more they will contribute to the Japanese economy.

Trends and developments in inbound demand

Japan’s economic market changes almost daily, driven by factors such as the global impact of the COVID-19 pandemic, recent yen depreciation, political transitions, and natural disasters in various countries. These developments directly affect the inbound market and significantly influence trends in inbound demand.

According to Japan Tourism Statistics from the Japan National Tourism Organization (JNTO), inbound demand trends show that the number of foreign visitors to Japan has increased annually. “Annual Trends in Foreign Visitors to Japan” shows that the increase since 2000 has been particularly pronounced. For example, the total annual number of visitors in 2024 was a record high, surpassing even pre-pandemic levels.

Here are some trends in inbound tourism to Japan since the year 2000:

The Visit Japan Campaign

The foundation of inbound trends is the Visit Japan Campaign, which was launched in 2003 in response to the government’s declaration of Japan as a “tourism-oriented nation.” The campaign was led by the Ministry of Land, Infrastructure, Transport and Tourism and included the slogan, “YOKOSO! JAPAN” (“Welcome to Japan!”). The campaign’s goal was to attract 10 million foreign visitors to Japan in 2010. According to the JNTO, the number of foreign visitors to Japan when the campaign started in 2003 was approximately 5.2 million. By 2010, it had exceeded 8.6 million visitors.

The Visit Japan Campaign is also part of a strategy to create a new customer base and revitalize the Japanese economy. The economy has been negatively impacted by declining birth rates and population decline in various regions due to demographic shifts (e.g., a large number of older citizens). Specifically, the aim is to further increase inbound demand by stimulating and promoting inbound spending (i.e., purchases of goods and services in Japan) by visitors to Japan.

The Great East Japan Earthquake

Until 2010, the number of visitors to Japan had experienced annual increases. However, in 2011, it dropped sharply to about 6.2 million due to the Great East Japan Earthquake. By 2012, it gradually began to recover.

According to data from the Reconstruction Agency, in 2015, the number of foreign visitors staying in the six prefectures of Tohoku—which suffered extensive damage from the earthquake—exceeded the 2010 pre-disaster levels and surpassed 1.5 million in 2019. This increase demonstrates the gradual but steady progress and success of efforts to revive tourism after the disaster and increase inbound demand in Tohoku.

Subsequent rise in inbound demand

Since then, the number of foreign visitors to Japan has continued to increase steadily, reaching approximately 32 million in 2019. This was the highest record to date.

During the COVID-19 pandemic, the inbound market declined globally, particularly from 2020–2022. However, in 2023, the easing of COVID-19 restrictions resulted in a resurgence in visitors to Japan and a rise in inbound demand. The total number of visitors in 2024 exceeded 36 million, surpassing the previous record set in 2019.

In recent years, the Japanese yen has been significantly weaker compared to other currencies. This has made travel to Japan more affordable for overseas visitors. Exchange rate changes are also one of the factors contributing to the expansion of the inbound market.

Future outlook for inbound demand

So far, we have explained the past trends in inbound tourism. With the current increase in inbound demand, it is also important to consider what the future could look like.

According to the JNTO, Japan was ranked first in a reader poll conducted by the major travel magazine Condé Nast Traveler. The poll appeared in its US and UK editions and was published in October 2024. Readers rated Japan as the most attractive country in the world for the second consecutive year.

Post-pandemic inbound demand is driven by the ongoing growth of the inbound market and by the significant depreciation of the yen in recent years. Additionally, uniquely Japanese subcultures—such as video games and anime—have gained popularity worldwide. Inbound tourism is also increasing from Europe, the US, and other Asian countries. All of this suggests that inbound demand will continue to grow in the future.

Regarding the outlook for inbound tourism, demand that was temporarily lost due to the COVID-19 pandemic began to recover as border control measures were gradually eased. Based on past data, this trend is expected to continue, similar to the rapid recovery seen after restrictions were lifted in April 2023.

Industries related to inbound demand

Foreign tourists visiting Japan want various products and services that can only be found in Japan. Here are some industries and businesses that have experienced increased demand because of their efforts to attract inbound visitors:

• Accommodations: Hotels, ryokan (traditional Japanese inns), minshuku (private lodgings), cottages, and long-stay accommodations
  
• Retail: Department stores, electronics stores, drug stores, convenience stores, ekiben (train station lunch boxes), souvenir shops, general goods, and folk craft shops
  
• Manufacturing: Manufacturers of furniture, electronics, food, and cosmetics
  
• Food and beverage: Restaurants, bistros, izakaya (pubs), cafes, and bars
  
• Sight-seeing: Theme parks, art and history museums, and onsen (hot springs)
  
• Transportation: Airports, Shinkansen trains, subways, buses, and taxis
  

Of the above, the accommodation industry likely sees the highest inbound demand. Securing accommodation is a necessity for travel to any country. Particularly in recent years, demand for hotels and ryokan (traditional Japanese inns) has surged alongside the increase in visitors to Japan. This has led to cases where supply cannot keep pace, prompting more travelers to use private lodgings, such as Airbnb.

In addition, the food and beverage industry has attracted attention for its wide variety of restaurants, offering Japan’s unique blend of price and quality—from classic dishes such as sushi to budget-friendly gourmet cuisine and izakaya. Additionally, local specialties and gourmet foods are also popular, with increasing recognition among foreign tourists.

Key points for encouraging inbound demand

To increase inbound demand in Japan, it is necessary for businesses to implement inbound measures from various perspectives. This can include providing services in multiple languages and ensuring that services are flexible and customized for visitors’ cultural backgrounds and values.

Here are some points businesses should consider when pursuing inbound business:

Establish payment infrastructure

As a measure to increase inbound demand, it is very important to provide flexible and convenient services to tourists visiting Japan from overseas. This also includes payment methods for inbound tourists.

In Japan, many stores only accept cash and do not accept cashless payments, depending on the region. To increase business and attract more tourists in the future, businesses should promote the widespread use of cashless payments across a wide area, such as by introducing cashless payment systems.

Share information via social media and websites

To raise awareness of products and services, businesses can provide useful information to tourists, such as travel advice and tips. Operating social media accounts or building websites to promote products and services to the world could be helpful for many businesses.

Use subsidies for inbound tourism

It is important to know about inbound subsidies, which are aimed at promoting tourism in major cities—such as Tokyo and Osaka—and in rural regions.

National and local governments provide subsidies to support businesses that pursue and develop inbound business. Subsidies have been established for specific industries and eligible recipients. Companies must initially bear the costs before submitting the necessary documents to receive the subsidy.

Inbound subsidies are often established in connection with fields and measures that contribute to regional revitalization. Using these subsidies can be useful for future marketing activities and business expansion plans.

Develop sustainable tourism

When a business decides to enter the inbound market, it is important to consider sustainable tourism, which is tourism that respects the natural environment and local communities. Recently, sustainable lifestyles have become increasingly important worldwide. This has led to a demand for environmentally friendly product development and facility management for inbound businesses in Japan.

Additionally, organizing volunteer activities and events that allow interaction with the local community—as well as providing experiences that prioritize community connections—can also support tourism development as a sustainable inbound business.

Visitors to Japan tend to support sustainable tourism efforts, which can leave favorable impressions. This makes sustainable tourism an important factor for the future of inbound demand.

Successful case studies of businesses responding to inbound demand

Here are some businesses that have taken successful measures to respond to inbound demand:

Huis Ten Bosch

Huis Ten Bosch—a theme park in Nagasaki—is famous for its beautiful reproduction of a Dutch town with seasonal flowers throughout the park. In cooperation with the local government, Huis Ten Bosch actively promotes itself to foreign visitors, attracting many tourists from overseas as well as Japan.

One measure for inbound tourism at Huis Ten Bosch includes providing services in multiple languages. Audio guides that explain how to enjoy the entire park are available in four languages: Japanese, English, Chinese, and Korean. The official Huis Ten Bosch app also supports these languages, as well as traditional Chinese, simplified Chinese, and Thai. This multilanguage service allows visitors to check facility wait times and issue restaurant queue tickets.

Matsumoto Kiyoshi

Drugstores in Japan carry a wide variety of items, such as daily necessities, food, cosmetics, and medicines. They are popular with foreign visitors because they provide easy-to-use products. One major drugstore chain, Matsumoto Kiyoshi, provides multilingual product descriptions and customer service to accommodate foreign travelers. Matsumoto Kiyoshi’s multilingual approach is an example of a successful inbound measure in the retail industry.

Matsumoto Kiyoshi has taken other steps to attract inbound tourists. For example, the company offers a variety of payment methods and proactively opens stores in areas with high inbound demand.

Don Quijote

Don Quijote is a discount store chain known for its unique interior design, which is rarely seen in other stores. It also caters to the needs of foreign travelers by providing multilingual in-store announcements and signage, duty-free shopping at all locations, and free Wi-Fi that is accessible by agreeing to their terms of service. These features demonstrate the store’s commitment to meeting the diverse needs of inbound travelers in a flexible and comprehensive way.

Don Quijote stands out for its commitment to providing a stress-free shopping experience for foreigners.

FAQs about inbound demand

What is the difference between “inbound” and “tourist”?

“Inbound”—meaning “from outside to inside”—refers to travelers visiting Japan from overseas or the act of traveling itself. On the other hand, “tourists” refer to people visiting a country or destination for the purpose of sightseeing. Tourists can be from overseas or from within Japan.

What is the opposite of inbound?

The opposite of “inbound” is “outbound,” which refers to travelers who leave their home country to visit another country or travel abroad.

What are the problems and challenges with inbound demand?

One of the problems and challenges arising from the increase in inbound demand is the impact of something called “overtourism.” Specifically, there are concerns about tourism increasing litter on the streets, noise pollution, and strains on public transportation. As a part of tourism development efforts, it will be necessary to work with local governments to develop measures to overcome these issues.

In addition, there have been examples of travelers abandoning purchases because they could not use their preferred payment method. Therefore, it is also necessary to strengthen payment infrastructure, especially in rural areas.

Preparing for inbound demand

In this article, we explained various aspects of inbound demand in Japan, including trends, developments, and future prospects.

The COVID-19 pandemic caused the inbound market to be temporarily stagnant. However, as travel restrictions were lifted, inbound demand increased.

For today’s inbound demand, businesses should research what services foreign visitors require to enjoy a safe and comfortable trip to Japan. Businesses can prepare for inbound demand by understanding visitors’ cultural backgrounds, religions, and values and responding to their various needs, including providing appropriate payment options.

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