Sociologists and demographers who’ve been studying the subject have warned us for some time what people in the inbound tourism industry have known for about a decade: Japan’s population, afflicted with the world’s lowest national birth rate, has not grown in the new millennium, and that this is beginning to affect the nation’s ability to generate new visitors or increased numbers of visitors to the U.S. (Japan is still the second-largest source market for overseas visitors to the United States, although China will soon replace it.)
Japanese Arrivals to U.S.
A 20-Year Timeline (000s)
2001 to 2020
Setting aside the interests of the U.S. tour and travel industry, the main concern in Japan over its no-growth population “curve” comes from the realization that fewer people will be able to join the workforce in coming years. Without adequate numbers of people to fill positions within certain occupations, there will likely be a decrease in the overall productive capacity of a country. And a low birth rate means a smaller, younger population relative to the elderly. This will mean the less numerous working young will be strained to support the financial needs of a relatively larger population of elderly retirees.
And now the issue has become a high-visibility one in Japan, as evidenced by the recent approval by Japan’s parliament of a new law that, beginning next April, would begin allowing hundreds of thousands of foreigners into the country to ease labor shortages. Such a measure would have been incomprehensible a generation ago, as Japan has long been wary of immigration and has some of the stiffest regulations regarding people who want to emigrate to the country. The recently passed law creates two new visa categories. Workers in the first category will be allowed in for five years if they have a certain level of skill and some proficiency in Japanese. Workers with a higher level of skills would qualify for the second visa category and would eventually be allowed to apply for residency.
Note, in the graphic below, how elderly retirees will become a larger and large percentage of the population—one that is not likely to increase its holiday travel—over the next three decades.
One-Sentence Summary: If you are a U.S. destination or travel supplier, don’t be looking for Japan to be a growth market any time soon.