In recent years, inbound tourism targeting foreign visitors has been growing rapidly in Japan. Following the end of the COVID-19 pandemic, demand for inbound tourism surged beyond previous levels, partly due to the depreciation of yen. This market is expected to expand further.

Inbound tourism holds significant potential to drive business growth, foster the development of new services, and contribute to regional economic development.

This article explains Japan’s inbound tourism business, covering its importance, benefits, and case studies.

What’s in this article?

• What is inbound business?
  
• The importance of inbound business
  
• Advantages of inbound business
  
• Case studies of inbound businesses
  
• Target demographics of inbound business
  
• Key points for success in inbound business
  
• Issues in inbound business
  
• The continued expansion of the inbound market
  
• How Stripe Terminal can help
  

What is inbound business?

Inbound means “from outside to inside,” and it refers to tourists visiting Japan from overseas. The term “inbound” is often used in the hospitality industry, while the opposite term—“outbound”—refers to travel from one’s home country to other countries.

In other words, inbound business refers to businesses that target visitors from other countries. In Japan, around 2023, restrictions related to COVID-19 countermeasures began to ease, leading to an increase in people traveling both domestically and internationally. As a result, inbound demand began to rise again.

Inbound business includes general services that are aimed at foreign tourists, information technology (IT) and infrastructure-related businesses that support inbound business, and other businesses related to travel to Japan.

The importance of inbound business

To understand inbound tourism trends, it’s important to compare data from 2019—before the COVID-19 pandemic—to data from 2024.

According to a report by the Japan National Tourist Organization (JNTO) entitled, “Trends in the Visitor Arrivals to Japan by Year,” the number of foreign visitors to Japan decreased significantly during the COVID-19 pandemic. However, by 2023, the number of visitors had recovered to close to pre-pandemic levels.

Furthermore, in January 2025, the JNTO reported in its “Number of Foreign Visitors to Japan in December 2024 and Estimated Annual Totals” that the number of foreign visitors to Japan for the entire year exceeded 36 million. This marks the highest number ever recorded, including the period before the COVID-19 pandemic. Compared with around 31 million visitors in 2019, this represents an increase of approximately 15.6%.

When comparing 2023 and 2024, the data reveals that the number of foreign visitors to Japan increased significantly in 2024. In particular, each month in the first half of 2024 showed an increase of 50%–90% compared to the same period in 2023. The highest record was about 3.5 million people in December 2024.

This data shows that the number of foreign visitors to Japan has increased year over year. It is likely that even more travelers will visit Japan in 2025 and in the future. Ultimately, there is a growing need for various businesses related to inbound tourism in Japan. For business owners, the current increase in Japanese tourism holds great potential for launching new inbound businesses and discovering diverse customer segments.

Advantages of inbound business

Acquisition of global customers

Inbound business targets global customers visiting Japan from overseas. Businesses can improve service quality and diversity by expanding operations to target foreign visitors as a new customer base.

Therefore, if a business increases its opportunities to appeal to a wider range of customers, it could grow. Securing a global customer base can also allow a business to diversify its market risks and maintain demand for services.

Increase in sales

Typically, inbound foreign visitors have higher spending power compared to general, domestic customers. This means that targeting foreign tourists as a customer base can lead to increased sales.

Tourists’ consumption objectives differ from those of domestic customers. Tourists generally aim to make the most of their limited time in Japan by having unique experiences and purchasing Japanese products. As an inbound business, it is important to offer high-quality experiences and products that are exclusive to Japan.

Improvement to brand image

When international visitors to Japan use a company’s products or services, it contributes to raising the business’s international profile. Furthermore, if they enjoy the business’s offerings, it can enhance brand image and potentially expand business opportunities. By providing services, businesses can increase opportunities to deepen interactions with foreign travelers. If customers share about the services on social media, they can expose the inbound business to other travelers.

Rather than focusing solely on Japanese customers, considering inbound tourists as a new customer base might help companies gain recognition as broader, internationally acknowledged brands.

Case studies of inbound businesses

Here are some examples of typical inbound businesses:

Accommodations industry

The most prominent sector in inbound business is the accommodations industry, including hotels and ryokan (traditional Japanese inns). For foreign travelers visiting Japan, securing accommodations is necessary. Therefore, with the current increase in foreign tourists, accommodations are in particularly high demand. Along with this growing demand, many hotels and ryokan have become more flexible, offering multilingual support and meals that acknowledge tourists’ varying cultures and religions.

Recently, overseas tourists have increasingly booked hotels and inns located in major cities—such as Tokyo and Osaka—and in rural areas. Consequently, these regions are focusing their efforts on developing tourism destinations, offering lodging facilities with unique cultural experiences, and providing local specialties.

Tourism and experiences

Local tours and other tourist attractions offer a wide variety of offerings specific to each region. In recent years, guide services with simultaneous interpretation and private tours with drivers have become available to accommodate the growing number of inbound tourists.

Additionally, in the entertainment sector, attractions have emerged where those who don’t understand Japanese can experience unique aspects of Japanese culture. These include rakugo (traditional Japanese storytelling) and comedy shows by English-speaking performers.

Food and beverage industry

Japanese cuisine—which continues to gain popularity overseas—is arguably the area of greatest interest for many tourists visiting Japan. While Japanese restaurants are increasingly common abroad, an exciting aspect of travel is experiencing local food culture firsthand, where travelers can appreciate the unique affordability and quality available only in that place.

The food service industry encompasses typical Japanese dishes—such as sushi and ramen—and various other regional culinary cultures found only in specific areas. This includes long-established local dishes and budget-friendly gourmet fare. Consequently, demand for the food service industry as part of inbound business is expanding beyond major cities into more rural areas. To further boost this inbound demand for food and beverage services, it’s important for businesses to be flexible by offering menus in various languages and multiple payment methods.

Target demographics of inbound business

Tourists who visit Japan are extremely diverse. Here are three target audience categories for inbound business:

Affluent travelers

In the inbound tourism business, affluent travelers are defined as those whose total spending per person at their destination reaches ¥1 million or more. This standard is defined by the JNTO.

There are two main types of affluent inbound travelers: traditional luxury and modern luxury. Traditional luxury travelers are characterized by their emphasis on wealth and power and their desire for high-quality products and services and superior comfort and status. In contrast, modern luxury travelers, often younger, are willing to spend generously on specific areas of interest but are frugal elsewhere.

In addition, the consumption tendencies (i.e., travel types) of affluent travelers are diversifying and can be divided into two categories: all luxury and selective luxury. Here are some details about each category:

• All luxury: These travelers prefer to choose high-end options for all aspects of their trips. Examples include business class flights, luxury ryokan accommodations, and private, multilingual guides for sightseeing.

• Selective luxury: This type of travel prioritizes the travelers’ interests. For accommodations, these travelers choose a business hotel that prioritizes price. For dining out, they opt for restaurants that specialize in high-end gourmet ingredients or bars that offer a selection of premium Japanese whiskey and sake.

Affluent travelers often make relatively high-value purchases and dine out. The more they do so, the greater the economic impact on inbound business. To attract affluent travelers, it is important for inbound businesses to provide premium services with high per-customer prices.

Tourists from Europe and the US

Visitors from Europe and the US are often interested in Japanese history and culture, as well as experiencing Japanese cuisine and hot springs. According to data from NAVITIME JAPAN, some visitors travel to areas that are far from airports and unfamiliar even to Japanese people.

For example, travelers who are interested in subcultures—such as anime and games—might visit places associated with the creators of their favorite anime or go to local areas with statues of anime characters. This demonstrates that various aspects of Japanese culture—including subculture—are well-known in the US and Europe. If the number of visitors continues to increase, it could lead to the revitalization of inbound business in these rural regions.

Travelers from Europe and the US also tend to visit Japan on individual trips, rather than on group tours. These trips give them a greater degree of freedom. These tourists also tend to stay for long periods, typically two weeks or more. In the inbound market, long-stay visitors often have a greater positive impact on the economy. Therefore, it is important to offer comprehensive services that provide comfortable stays and to develop tourism in various regional areas outside of major cities. These features could help visitors decide to visit again or stay longer.

Tourists from Asia

Tourists visiting Japan from Asian countries are characterized by high inbound demand, mainly from South Korea, China, Taiwan, and Hong Kong. According to the Japan Travel Bureau (JTB), China is the country with the most visitors to Japan within Asia, but its recovery to pre-pandemic levels has been somewhat slower.

As a fellow Asian nation, Japan is a more accessible travel destination compared to Europe or the US. Furthermore, there are cases—such as neighboring South Korea—where mutual demand is growing for both inbound and outbound travel between countries.

For inbound travelers from Asia, short-term visits are more common than long-term stays, and a significant number come specifically for shopping, such as purchasing electronics. For example, among visitors from China—where cross-border ecommerce is active—many travelers who have purchased their favorite Japanese products through cross-border ecommerce travel to Japan to purchase them locally. These travelers tend to visit Japan mainly for shopping.

Similar to Europe and the US, the number of individual visitors (i.e., not in group tours) from Asia is also on the rise. When working to develop an inbound business targeting individual travelers from Asia, it is important to consider a wide range of services that can accommodate English and various Asian languages.

Key points for success in inbound business

Here are some key points for achieving success in inbound business:

Understand visitors’ needs and develop strategies to meet them

To understand what visitors want, it is necessary to accurately identify their needs. Travelers from around the world have varying needs that depend on their home countries and cultural backgrounds. Other factors include age, income level, family structure, values, and religion. It is important to identify target demographic groups and clarify their specific needs. This can be accomplished by conducting surveys and using questionnaires and other methods to identify issues and challenges that require attention. Using the information gained from these strategies can be useful for future marketing.

With the increasing number of individual travelers visiting Japan, one option is to promote the appeal of independent travel. Businesses can attract interest by offering services that don’t rely on group tours organized by travel agencies. One example is using social media or websites to actively provide the kind of information and advice that individual travelers seek, such as booking local experiences or securing transportation arrangements.

Cater to visitors’ cultures and values

Visitors to Japan come from a variety of backgrounds, cultures, and values. Therefore, with inbound business, it is important to provide services that help make visitors feel comfortable and welcome.

For example, with dining, it is important to understand that some ingredients are forbidden for religious reasons. In addition to offering various menu options, creating vegetarian and vegan meals could also be a helpful strategy.

Offer multilingual services

The most important point is overcoming the language barrier. Those who have traveled abroad have probably experienced some degree of difficulty communicating with locals because of not understanding the language. This can create problems and misunderstandings.

With clear communication, problems can be solved quickly when they arise. Even if service providers don’t understand everything perfectly, grasping the meaning of some words can allow them to communicate with travelers through nuance and gestures.

When engaging in any inbound business, being able to communicate in as many languages as possible—such as English and Chinese—can increase visitors’ satisfaction and help provide them with a sense of security. Therefore, it is important for businesses to prepare multilingual versions of websites and apps, as well as train staff to understand more than Japanese.

In addition, restaurants can create menus with photos and text, which can be very helpful for tourists.

Issues in inbound business

With the increase in visitors to Japan, inbound demand is growing.

However, there are also several challenges that inbound businesses might encounter:

Increased competition

The presence of competition is important for improving business quality. However, as more companies enter the inbound business market, competition has intensified. As a result, acquiring customers has become more difficult, and profits might not increase easily.

Furthermore, there are concerns that when the market becomes saturated and price competition intensifies, the quality of services could decline. It could become difficult to stand out from competitors.

Impact of overtourism

Overtourism has caused problems in a variety of local regions. For example, in Japan, people typically take their trash home when they go out. As a result, there are almost no trash cans on the streets. There is concern that an increase in tourists will have a negative impact on the local environment due to street litter.

In addition, noise pollution and excessive burdens on public transportation could lead to discord and conflicts between local residents and tourists. As a result, some areas could lose their appeal to inbound tourists, making them less attractive as travel destinations.

Insufficient tourism infrastructure

Another challenge is the lack of infrastructure for tourism. Especially in rural areas, it is important to proactively build facilities and systems that enable free Wi-Fi and payment methods that are ideal for inbound travelers.

The continued expansion of the inbound market

In this article, we’ve provided an overview of Japan’s inbound business, including its advantages and target audiences.

The inbound market faced significant stagnation after the start of the COVID-19 pandemic, but now that long-term restrictions on travel have been lifted, it is expected to continue to recover in the future.

Inbound tourism also faces challenges—such as overtourism—making it crucial for each region and business operator to develop countermeasures for their specific circumstances. Regarding current demand for inbound tourism, businesses should research what services they can provide to ensure travelers enjoy safe and comfortable stays. By understanding and meeting these needs, Japanese businesses can aim to expand their inbound tourism business.

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