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Published on Tuesday, April 3, 2012

Japan bounces back






After dropping 90% for two months full recovery should be evident in 2012 says WTTC report.


A report commissioned by the WTTC says that the immediate impacts of the earthquake and tsunami on Japan"s Travel & Tourism were extremely stark as international arrivals were down 50% in March and then 62% in April.


But it is clear that Travel & Tourism demand fully recovered in late 2011, ahead of activity in the wider economy and despite recent disruptions - boosted in no small part by the strength of the yen. Travel & Tourism is clearly set to make an increasing contribution to the wider economy in 2012.


Inbound leisure tourism fell by an estimated 90% in the two months, according to the Japan Tourism Agency (JTA), with domestic travel down almost 20% over the period. The disruption to demand was felt across the country, not just in the northeastern regions that were directly affected by the earthquake and tsunami.


These initial impacts were apparently larger than the disruption witnessed in 1995 in the aftermath of the Kobe earthquake, and a wider set of events was considered as benchmarks for potential outcomes.


Twelve months ago, in March 2011, the devastating Tohoku earthquake and tsunami struck northeast Japan. The most serious natural disaster to hit the country since the 1995 Kobe earthquake, it also triggered Japan"s worst ever nuclear crisis - indeed, the world"s worst ever nuclear emergency since Chernobyl.


Significant Travel & Tourism impacts were inevitable, and were immediately evident as Japanese travellers remained at home and international visitors stayed away.


The World Travel & Tourism Council (WTTC), which has been tracking the performance of Japan"s Travel & Tourism since the disaster, commissioned Oxford Economics to prepare scenarios for the recovery of the industry:

  • The initial impacts were dramatic as international inbound arrivals fell by 62% in April 2011 (over the same month in 2010) - a greater impact than had been observed with other previous natural disasters in Japan.
  • There was also greater initial uncertainty regarding the path of recovery due to the nuclear emergency and operations at Fukushima. Failure to contain the situation quickly and successfully could have affected Travel & Tourism confidence for many years.
  • Domestic demand rebounded more quickly than anticipated, and had fully recovered by the second half of 2011. The emerging trend of increasing travel intensity among young Japanese actually strengthened and is now reportedly higher than under original baseline assumptions.
  • After the initial large falls, international demand also began to rebound in 2011. Full recovery in international tourism demand should be evident in the first half of 2012. However, while some origin markets have already fully rebounded, further external disruptions are muddying the waters,
  • It is clear that Travel & Tourism demand overall fully recovered in late 2011, ahead of activity in the wider economy and despite recent disruptions - boosted in no small part by the strength of the yen. Travel & Tourism is clearly set to make an increasing contribution to the wider economy in 2012.


Valere Tjolle
Valere is editor of the Sustainable Tourism Report Suite 2012 Special Offers HERE
 

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