Japan reopens to tourists with hotel staff shortage

As Japan throws open its doors to visitors this week after more than two years of pandemic isolation, hopes for a tourism boom face tough headwinds amid shuttered shops and a shortage of hospitality workers.

From Tuesday, Japan will reinstate visa-free travel to dozens of countries, ending some of world's strictest border controls to slow the spread of COVID-19. Prime Minister Fumio Kishida is counting on tourism to help invigorate the economy and reap some benefits from the yen's slide to a 24-year low.

Arata Sawa is among those eager for the return of foreign tourists, who previously comprised up to 90% of the guests at his traditional inn.

"I'm hoping and anticipating that a lot of foreigners will come to Japan, just like before COVID," said Sawa, the third-generation owner of the Sawanoya ryokan in Tokyo.

Just over half a million visitors have come to Japan so far in 2022, compared with a record 31.8 million in 2019. The government had a goal of 40 million in 2020 timed with the Summer Olympics until both were upended by the coronavirus.

Kishida said last week the government is aiming to attract 5 trillion yen ($34.5 billion) in annual tourist spending. But that goal may be too ambitious for a sector that has atrophied during the pandemic. Hotel employment slumped 22% between 2019 and 2021, according to government data.

Spending from overseas visitors will reach only 2.1 trillion yen by 2023 and won't exceed pre-COVID levels until 2025, wrote Nomura Research Institute economist Takahide Kiuchi in a report.

Flag carrier Japan Airlines Co 9201.T has seen inbound bookings triple since the border easing announcement, president Yuji Akasaka said last week, according to the Nikkei newspaper. Even so, international travel demand won't fully recover until around 2025, he added.