News / Dramatic impact of COVID-19 on Travel and Tourism sector in Japan

Dramatic impact of COVID-19 on Travel and Tourism sector in Japan

🕔 June 21, 2021
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The World Travel & Tourism Council (WTTC) has revealed in its annual Economic Impact Report (EIR) the damage caused by COVID-19 to Japan’s Travel & Tourism sector, resulting in a loss of USD138 billion from the country’s economy. In addition, the sector's contribution to gross domestic product (GDP) dropped by 37%, felling from USD373.0 billion (7.1%) in 2019, to USD234.9 billion (4.7%) in 2020.

The year of damaging travel restrictions which brought much of international travel to a complete standstill resulted in the loss of 290,200 jobs in the tourism sector across the country. WTTC believes that the true situation could be even worst, if not for the Japanese government’s job retention scheme which offered a lifeline to businesses and workers. The government has also helped micro and small to medium-sized enterprises through subsidies, rent support grants and reduced-rate loan programs with interest-free unsecured financing support.

Furthermore, the impact on women, youth and minorities was significant. The number of those employed in the Japanese Travel & Tourism sector fell from more than 5.7 million in 2019, to 5.4 million in 2020, a drop of 5.1%. The report also revealed domestic visitor spending declined by 30.3%, while international spending fell by 82.9%,  markedly worse compare to the global average decline of almost 70%. 

Virginia Messina, Senior Vice President and Acting CEO of WTTC said:

“WTTC believes it is critical for Japan to have a clear roadmap for the reopening of its borders and to begin relaxing travel restrictions to return these jobs to the economy. Our research shows that if mobility and international travel resume by June this year, the sector’s contribution to global GDP could rise sharply in 2021, by 48.5%, year-on-year.”

Japan is currently looking to introduce a digital health pass this summer, similar to the EU’s Digital Health Certificate. This new initiative is a positive step in the right direction and could significantly aid the restoration of international travel. 

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