"Yen Weakness Means Go to Japan" Koreans Flock to Japan... Japanese Shopping and Tourism Industries Smile

Recovery Trend in Duty-Free Sales of Five Major Department Stores
High-End Product Purchases Drive Sales
Hotel Foreign Guest Share and Room Rates Also Recovering

[Image source=Yonhap News]

[Asia Economy Reporter Jeon Jinyoung] Travel demand, which had been suppressed due to the COVID-19 pandemic, has rebounded, and the weak yen has led to a significant increase in Korean tourists visiting Japan. As Korean tourists have emerged as major spenders, sales at Japanese department stores and hotels have also shown a rapid recovery, according to compiled data.

According to the Nihon Keizai Shimbun (Nikkei) on the 21st, data from the Japan Department Stores Association shows that the average purchase amount per foreign tourist reached 192,000 yen (1.84 million KRW) last October, nearly three times higher than the 65,000 yen recorded during the same period in 2019 before the pandemic.

It is analyzed that the main reason for this increase is the surge in shopping by Korean tourists following the easing of COVID-19 restrictions. In fact, Koreans are considered major spenders while Chinese tourist arrivals remain restricted. According to the Japan National Tourism Organization, among the 498,600 tourists who visited Japan last October after travel restrictions were lifted, 122,900 were Korean tourists, accounting for the largest share. This figure has recovered to about 60% of the level seen in October 2019 before the COVID-19 outbreak.

Last month, duty-free sales at five major Japanese department stores also recovered to 50-90% of the levels seen in the same month of 2019 before the pandemic. Considering that major Japanese department stores recorded operating losses during the pandemic and that Seven & I Holdings, which operates Sogo and Seibu, sold its department store business to a U.S. investment firm, this indicates a rapid recovery.

For Mitsukoshi Isetan Holdings, which operates Isetan Shinjuku, the largest department store in Japan, duty-free sales at its metropolitan area stores from last month to early December increased by 4% compared to the same period in 2019. Duty-free sales at Matsuzakaya Ginza Department Store’s Tokyo main branch from December 1 to 15 also grew by 5.7% compared to 2019. Luxury items such as handbags and watches priced around 500,000 yen (4.87 million KRW) reportedly sold well.

Not only department stores but also the hotel industry has begun to enjoy a tourism boom. According to Nikkei, the average room rate at Palace Hotel in Chiyoda Ward, Tokyo, surpassed pre-pandemic prices starting last month. The proportion of foreign guests also exceeded 60%, and the hotel expects to achieve record-high sales this month.

In the case of business hotel Dormy Inn, the average room rate has exceeded pre-pandemic levels since last September, and the room occupancy rate has recovered to a level similar to that before the pandemic.

This content was produced with the assistance of AI translation services.