The surge in spending by domestic and foreign tourists has driven department store duty-free sales beyond pre-pandemic levels, as the Japanese government has eased border controls, driving an increase in the number of inbound tourists, especially wealthy ones.
“Nikkei News” reported that the duty-free sales of some department stores since December have exceeded the level of the same period before the epidemic. Average daily room rates at many hotels also exceeded pre-pandemic levels in December as domestic tourism picked up.
On October 11 this year, the Japanese government lifted the ban on inbound tourists traveling freely and began to allow visa-free entry for tourists from some countries. Data from the National Tourism Administration showed that the number of inbound tourists in October was 2.4 times that of the previous month, reaching 490,000. Although the number of tourists in October was only about 20% of that in October 2019, the number of tourists from South Korea has risen to about 60%, and tourists from Southeast Asia, the United States, and Europe have all increased.
The depreciation of the yen prompts foreign tourists to buy high-priced goods. According to data from the Japan Department Store Association, the tax-free sales of five high-end department stores including Oba Takashimaya in November rebounded to 50%-90% of November 2019. Mitsukoshi Isetan Holdings’ duty-free sales in Tokyo in the first two weeks of December were up 4% from the same period in 2019.
Per capita shopping spending by foreign tourists was 192,000 yen ($1,411) in October, almost triple the amount in the same month in 2019, data from the Japan Department Stores Association showed.
At the Matsuya Ginza department store in Tokyo, a sales manager said that since the beginning of November, sales of luxury brand products priced at around 500,000 yen have been booming. Duty-free sales in the first 15 days of December were 5.7% higher than in the same period in 2019, driven by an increase in tourists from China, Hong Kong, Macau and Taiwan. “Throughout December, sales are likely to exceed pre-pandemic levels,” the manager said.