TRBUSINESS – January 11, 2016
The huge boom in Chinese visitor numbers to Japan has led to the coining of a new term ‘bakugai’ meaning ‘explosive buying by Chinese tourists’ – and data from analyst CiR confirm that numbers to Japan have been particularly buoyant.
CiR analysis using its Business Lounge portal shows that international travel within Asia as a region (i.e all international passengers departing Asia and destined for Asia) is up by a strong +9.2% for future seat capacity (in the six months period December 2015 to May 2016 (versus the same period a year ago).
Within this overall picture, the growth to Japan is significantly higher at +15.9%, well above the regional average. Actual passenger data backs up this trend, with Japan enjoying an increase of +11.6% in international pax in the 12 months to September (versus the same period a year ago) according to CiR. For the Japan September year-to-date data, click here.
GREATER CHINA DRIVER
And despite the slowing Chinese economy, this growth has been driven by an increase in visitor numbers from the Greater China region (China, Hong Kong and China Taipei) of +25.9% (see chart below and click to enlarge) which has led to the bakugai boom. Japanese duty free and travel retailers hope it will continue far into 2016. Travel to Japan from South Korea, at +19.1%, was also up significantly.
Bakugai, which has become a buzzword, has been helped mainly by Japan’s weak yen and also by the MERS virus crisis in South Korea last year which caused many mainland Chinese travellers to switch destinations.
Capacity increases were implemented by All Nippon Airways and Japan Airlines with a doubling of seats between Chinese departure points Beijing and Shanghai Pudong, and Tokyo Haneda.
CiR adds: “In response, Japanese retailers have changed their retail offer to specifically appeal to Chinese tourists, such is their value. During the Golden Week holidays in October, 400,000 Chinese tourists were estimated to have spent ¥100bn/$85m in Japan.
“Thanks to the weak yen and relaxed visa regulations, Business Lounge data confirms the impact this has had on Chinese travel habits and indicates this trend is likely to continue; Japan looks set to bolster its position as a destination for this key nationality in travel retail.”
CAUTION IN 2016
However, some caution should be applied. While the Chinese yuan has appreciated by +48.6% against the yen in the past five years, in the past 12 months, the yuan has, in fact, lost ground by -4%. In addition, with the MERS crisis now over, South Korea is pushing hard to attract Chinese shoppers back to its own market.