Japan’s Double-Edged Sword: The Hidden Costs of Japan’s Tourism Surge
A photograph of Arakura Fuji Sengen Shrine with the seasonal cherry blossoms (Source: Yamanashi Tourism Organization)
By Lily Noda ’28
Cherry blossoms in Kyoto, the neon lights of Shibuya, the serene temples of Nara—these iconic sights have helped transform Japan into one of the world’s top travel destinations. In 2024, Japan welcomed a record-breaking 36.9 million international visitors, a 47.1% increase from the previous year that already exceeded the pre-pandemic record of 31.9 million in 2019. However, this rapid surge in tourism has sparked debate: is Japan’s booming travel industry an economic lifeline or a growing burden? While tourism fuels economic growth and cultural exchange, it also strains local communities, damages the environment, and raises questions about sustainability. As the tourism industry in Japan navigates its post-pandemic recovery, the challenge lies in striking a balance between welcoming the world and preserving what makes the country unique.
Economic background: Why Japan is gaining tourist popularity
Japan’s rich cultural attractions have long drawn travelers, but another factor has significantly contributed to the surge in visitors: affordability. The depreciation of the Japanese yen has made the country a budget-friendly destination for foreign tourists. In June 2024, the yen hit 161 per U.S. dollar, its weakest level since 1989. This decline is attributed to disparities in U.S. and Japanese interest rates and Japan’s substantial national debt, which has led the central bank to cap long-term government bond yields through open-ended bond purchases.
The weak yen has made domestic goods and services—from hotels and transportation to dining and souvenirs—more affordable for foreign visitors. This trend has encouraged more “spontaneous travel,” as noted by Naomi Mano, president of the luxury travel agency Luxurique.
Economic Impact: Growth and Challenges
Tourism is a key driver of Japan’s economy. In 2024, the country’s travel and tourism sector contributed an estimated 7.5% to its Gross Domestic Product (GDP), generating revenue through tourist spending and spurring job creation and infrastructure development. The economic benefits of tourism extend to local businesses, from traditional inns and restaurants to artisans and small retailers who rely on international visitors for sales.
However, the economic implications of Japan’s tourism boom are not universally positive. The combination of a weaker yen and rising tourist demand has fueled inflation, making essential goods and services more expensive for Japanese residents. In 2024, the country saw a 0.2% decline in average real wages compared to the previous year, exacerbating financial strain for many households. Additionally, the influx of visitors has contributed to overcrowding in major urban centers, pushing up rental and property prices in tourism hotspots.
Strains on Local Communities and the Environment
Beyond economic factors, local communities have voiced growing concerns over the social and environmental impact of overtourism. Popular destinations such as Tokyo, Kyoto, Osaka, and Mount Fuji have struggled to manage the surge in visitors, leading to overcrowding, increased waste, and disruption to residents' daily lives.
One striking example of Japan’s efforts to manage the impact of tourism is the iconic Lawson convenience store located at the base of Mount Fuji. For years, the store, perched on a prime viewing spot, offered tourists an unobstructed, breathtaking view of the mountain—an iconic shot that captures two symbols of Japan. However, in April of 2024, Japan's tourism authorities stepped forward to tackle this issue: they decided to put up a screen to block this view. This decision was made as part of a broader initiative to reduce overcrowding and the environmental strain caused by excessive tourism in the area. It reflects a broader strategy to distribute tourist footfall more evenly across regions, rather than concentrating visitors in a few overburdened locations.
Tourists in front of the famous Lawson with the Mount Fuji view, on April 28, 2024. (Source: Kyodo News)
Workers install a black mesh screen in front of the Lawson convenience store near Mount Fuji. (Source: BBC News)
Government Strategies for Sustainable Tourism
Recognizing both the opportunities and challenges posed by its growing tourism industry, the Japanese government has set ambitious targets, aiming for 60 million annual visitors by 2030. At the same time, authorities are implementing measures to mitigate the negative consequences of mass tourism.
One such measure is the introduction of stricter regulations for visitors to Mount Fuji. In 2024, authorities required climbers on the Yoshida Trail of Mount Fuji to pay a mandatory entry fee of 2,000 yen (about 14 USD) and implemented a daily limit of 4,000 climbers to manage overcrowding. However, starting in 2025, the fee for hiking Mount Fuji will be 4000 yen (about 27 USD) per person, doubling from the previous year, to further regulate access and fund conservation efforts.
Another example of regulatory efforts is seen in the potential rise of the tourism tax. Earlier in March this year, the ruling Liberal Democratic Party began a consultation to sharply increase a tourist tax imposed on departing travellers to fund initiatives aimed at addressing overtourism in parts of the country. Currently set at 1,000 yen (approximately USD 6.64), discussions are underway to raise the tax to as much as 5,000 yen (USD 33.20). The government plans to allocate this revenue toward initiatives such as infrastructure improvements and sustainable tourism development.
In addition to environmental and infrastructure measures, Japan is also revising its tourism-related tax policies. Beginning November 1, 2026, the country will overhaul its tax-free shopping system for inbound visitors. Currently, foreign tourists are exempt from paying the 10% consumption tax at the point of purchase in designated stores by presenting their passports. Under the new system, however, visitors will initially pay the consumption tax and later apply for a refund before their departure. This change is intended to curb abuse of the existing system, which has allowed some travelers to resell tax-free goods abroad at higher prices. The revision reflects Japan’s broader efforts to manage the financial side of tourism more effectively while maintaining fair market practices.
Finding a Balance
As Japan continues to welcome record numbers of international visitors, the challenge remains: how can the country maximize the economic benefits of tourism while preserving its cultural heritage and quality of life for residents? Policymakers must strike a delicate balance between promoting Japan as a global travel destination and ensuring that tourism remains sustainable for future generations. By implementing policies that regulate visitor numbers, encourage responsible tourism, and distribute economic benefits more equitably, Japan may be able to turn its tourism surge from a double-edged sword into a long-term asset.