Japan will find it hard to replace the revenue lost if Chinese tourists keep avoiding the country amid a diplomatic row over Taiwan, a subsidiary of the data provider Fitch Solutions warned on Friday.
A sustained drop-off in visitor numbers from China would “significantly impact” Japan’s retail and tourism industries, as Chinese tourists were not only Japan’s largest source of overseas visitors but were also higher-than-average spenders, subsidiary BMI said in a research note.
In the short term, Japan’s tourism industry has “limited alternatives” and “will find it difficult to fill the gap left by Chinese tourists”, BMI said, adding that “airport duty-free shops and large department stores will suffer direct impacts”.
Tensions between China and Japan have escalated since early November, when Japanese Prime Minister Sanae Takaichi suggested that Tokyo could deploy military forces in the event of a conflict in the Taiwan Strait.Beijing has since issued several travel warnings urging Chinese tourists to avoid Japan, while several Chinese airlines have offered full refunds for any Japan-bound flights until the end of the year.