Yen Strengthens and Prices Rise: Japan's "Value for Money" Drops
China Benefits from Surging Demand After Visa Waiver Policy
The once-soaring popularity of travel to Japan, driven by its proximity and relatively low costs, has recently seen a sharp decline. This is largely due to the strengthening of the yen and rising local prices, which have significantly diminished Japan's appeal in terms of "value for money." Additionally, growing concerns about the possibility of a major earthquake spreading across Japan have further dampened travel demand. In contrast, China, which recently implemented a visa waiver policy, is now benefiting from a surge in demand from Korean travelers.
According to the "Monthly Domestic and Overseas Travel Trends Report" published by Consumer Insight on June 25, one out of every three Korean outbound travelers recently visited Japan. From last year through May of this year, about 34% of Korean overseas travelers visited Japan, up slightly from 32% in 2023. This figure is 10 percentage points higher than in 2019, before the COVID-19 pandemic, when it stood at 24%.
Japan remains the most popular overseas destination for Koreans, but recent changes in travel patterns are becoming apparent. While "suitable travel duration and distance" (35%) has consistently been a major reason for choosing Japan, the advantage of "travel costs and local prices"?previously considered Japan's key appeal?has clearly weakened. The proportion of respondents who chose Japan because "it is affordable" dropped sharply from 24% in 2023 to 17% this year.
In addition, rumors about the "possibility of a major earthquake," which have been fueling anxiety recently, are also having a significant impact on demand for travel to Japan. Concerns that "a major earthquake will happen soon" are spreading across various online communities and social networking services (SNS), causing anxiety among those planning to travel. In fact, posts such as "I canceled my trip to Japan due to earthquake concerns" have been appearing frequently on domestic travel forums.
As Japan's appeal as a travel destination weakens, China is emerging as a new beneficiary. In particular, the mutual visa waiver policy implemented since last year has had a major impact. The proportion of Koreans traveling to China was only 3% last year, but has recently more than doubled to 7%. The report analyzed that "while the appeal of travel to Japan is declining due to rising local prices and the strengthening of the yen, China is expected to continue its upward trend thanks to the visa waiver policy."
The report stated, "Japan has established itself as the leading overseas destination for Koreans, but if its absolute strength in 'value for money' continues to weaken, it may enter a long-term adjustment phase." It also forecast, "This could lead to an increase in the market share of other Asian countries, including China, where demand has surged following the visa waiver policy, and some travel demand may even return to domestic destinations."
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