Bianca Cheung & Trisha Mondino, TOUR-4110
November 20, 2025

Why Japan’s Tourism Competitiveness is Strong and What Could Undermine It By 2030

The Travel & Tourism Development Index (TTDI) offers one of the most comprehensive assessments of how well destinations convert their natural, cultural, economic, and infrastructural assets into sustainable competitiveness. By evaluating both internal capabilities and external enabling conditions, the TTDI exposes the strengths that elevate countries to the top of the global tourism hierarchy as well as the vulnerabilities that can undermine long-term growth (World Economic Forum, 2024). According to the 2024 TTDI, the world highest-scoring destinations consistently benefit from strong business environments, resilient labour markets, advanced ICT readiness, and high concentrations of natural, cultural, and non-leisure resources (World Economic Forum, 2024).

Japan exemplifies this profile. Ranked #3 out of 119 economies globally and #1 in the Asia-Pacific region, the country combines exceptional cultural depth with world-class infrastructure and a powerful global brand shaped by media, innovation, and cultural heritage (World Economic Forum, 2024). Yet its position is not without pressure. Competing destinations are closing the gap, and Japan’s rapid tourism resurgence has introduced challenges that demand strategic, forward-looking solutions.

What is the state of tourism today?

Japan’s tourism landscape is defined by a distinctive blend of deep cultural heritage and globally influential contemporary media. Scholars note that Japan’s identity as a destination is constructed through a dynamic interplay between ancient traditions and modern cultural production, allowing the country to project unique and recognizable image (Craig, 2020; Freedman & Slade, 2018). This duality strengthens Japan’s appeal, drawing visitors who seek both historical depth and technologically advanced urban experiences. The country’s cultural richness, paired with its reputation for design, innovation, and creative industries, reinforces its position as a leading global tourism hub (Severino, 2024).

Japan’s visitor numbers reflect this momentum. Annual foreign arrivals have climbed from 6.7 million in 2005 to nearly 32 million in 2024, demonstrating the country’s robust recovery and expanding tourism demand. The government’s target of 60 million visitors by 2030 underscores its intention to translate cultural capital into sustained economic growth (Lewis & Dempsey, 2025).

Figure 1: Regions of Japan

Strengths and Strains

Japan’s position as one of the world’s most competitive tourism economies is reinforced by the strength of its resource-based indicators, particularly those that influence global travel motivation. Within the TTDI’s T&T Resources dimensions – defined as the primary “reasons to travel” to a destination (World Economic Forum, 2024). Japan outperforms all Asia-Pacific economies across its top pillars.

Its strongest pillars, Cultural Resources, ranks 122.9% above the Asia-Pacific average, reflecting the country’s unparalleled concentration of cultural assets, archeological sites, heritage districts, entertainment infrastructure, and globally recognized cultural products (World Economic Forum, 2024). Initiatives such as “Cool Japan” strategy demonstrate the deliberate leveraging pop culture like anime, manga, gaming and fashion to expand soft power and enhance global tourism appeal. This cultural export ecosystem strengthens international interest while driving economic growth and cross-cultural engagement (Severino, 2024).

Figure 2: Cool Japan

Japan’s second-best pillar, Non-Leisure Resources, sits 83.02% above the regional average, underscoring Tokyo’s role as an economic giant and global business hub. Tokyo ranks as the third-largest city in the world by GDP (US $1.3 trillion in 2024), supported by extensive corporate headquarters and major institutions (Oxford Economics, 2025). The presence of Fortune Global 500 firms such as Honda, Mitsubishi, and Sony further fuels business travel demand (Fortune, 2020). These indicators affirm Japan’s ability to attract both leisure and non-leisure traveler, reinforcing year-round tourism stability.

Figure 3: Areas of Tokyo: Business and Entertainment

However, Japan’s weakest performance appears under the TTDI’s T&T Demand Sustainability pillar, where it scores 23.9% below the Asia-Pacific average (World Economic Forum, 2024). This reflects mounting challenges associated with overtourism, including crowding, demand volatility, and pressure on local infrastructure. Analysts highlight rising “tourism fatigue” and growing tensions in high-traffic areas, where visitor misbehavior like noise, littering, disregard for etiquette has strained Japan’s cultural norm of omotenashi (Lewis & Dempsey, 2025). These pressures highlight the urgent need for demand management strategies to ensure that Japan’s tourism growth remains socially sustainable.

Figure 4: A crowd of tourists at a temple in Asakusa, Tokyo

On the Rise or in Retreat?

Japan’s 2024 TTDI performance reveals a country that remains firmly within the global tourism elite yet faces growing competitive pressure. Positioned behind Spain (#2) and ahead of France (#4), Japan holds an overall score of 5.09 (World Economic Forum, 2024). Surprisingly, this placement reflects no change in rank since 2019, alongside a slight –0.3% decrease in its overall score. By contrast, France, now scoring 5.07, has moved up two positions since 2019, narrowing the gap significantly. These dynamic signals a potential shift: while Japan’s competitiveness remains strong, its growth trajectory shows signs of stagnation.

Japan’s sustained competitiveness rests on a series of internal strengths. The country continues to ensure the economic viability of its tourism sector by deeply understanding market expectations and consistently delivering high levels of visitor satisfaction. Its long-cultivated global reputation rooted in cultural authenticity, technological sophistication, and the seamless blending of heritage with modernity continues to reinforce its attractiveness.

One of the most influential internal factors shaping Japan’s current tourism surge is the weak yen, which has dramatically reduced travel costs for international visitors. Millions of tourists have arrived in recent months specifically to take advantage of this favorable exchange rate (Sugiura, 2023). Lower prices for accommodations, dining, transportation, and retail have made Japan as a highly attractive destination for international tourists. Analysts note that Japan has essentially begun “leveraging its weak currency as a core marketing tool,” intentionally or otherwise, to stimulate inbound demand. This strategy aligns with the government’s goal of reaching 60 million visitors by 2030, an objective that increasingly relies on high-spending markets such as China and South Korea, whose travelers historically demonstrate strong purchasing power (Bononi, 2025).

External conditions have also contributed to Japan’s temporary advantage. The global phenomenon of revenge outbound travel, a surge of international travel triggered by the psychological need to compensate for pandemic-era restrictions has significantly boosted global demand. The pandemic initially caused a severe drop in travel due to strict border regulations (Wang et al., 2024), but travel has since re-emerged as a form of emotional relief and stress reduction (Shin et al., 2022). Japan’s rich cultural heritage and diverse mix of traditional and modern attractions positioned it as an ideal destination for travelers seeking both novelty and comfort.

However, France’s rapid ascent presents a real threat to Japan’s ranking stability. France’s T&T Resources – Natural, Cultural, and Non-Leisure, rank 40–50% above regional averages, positioning the country as a strong contender (World Economic Forum, 2024). Strategic initiatives have also amplified its competitiveness. Its extensive promotion of cycling tourism, supported by the Discover France by Bike network and an expansive system of well-designed trails, exemplifies how the country leverages natural assets to differentiate itself (France Vélo Tourisme, n.d.). Additionally, France’s globally recognized gastronomy inscribed on UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity, strengthens its cultural appeal (UNESCO, 2010).

Geography further enhances France’s position. As part of the Schengen Area, France benefits from seamless mobility across 29 European countries, enabling effortless multi-country travel itineraries and positioning it as a natural gateway to Europe (Government of Canada, 2025). This makes France an increasingly compelling alternative for international travelers seeking efficiency and regional connectivity.

Unlocking Potential: Opportunities and Obstacle

Japan’s continued competitiveness depends on its ability to address the structural and social pressures emerging from rapid tourism growth. One of the most urgent areas for improvement lies within T&T Demand Sustainability, where Japan significantly underperforms relative to the Asia-Pacific average. As overtourism intensifies in major destinations, strategies that protect community well-being, minimize friction between residents and visitors, and stabilize long-term demand have become essential.

A primary opportunity lies in shaping tourist behavior to reduce negative impacts on local communities. Across Tokyo, Kyoto, and Osaka, residents have voiced growing frustration with visitor misconduct, ranging from littering and noise to disregard for social norms deeply embedded in Japanese society (Asia News Monitor, 2025). Such behaviors strain the traditional ethos of omotenashi and contribute to what researchers describe as an emerging psychological dimension of overtourism (Lewis & Dempsey, 2025). Expanding targeted behavior-management initiatives could therefore play a transformative role. Kyoto’s official “Mind Your Manners” campaign, featuring multilingual information guides, signage, and instructional videos, provides a compelling model. These resources encourage visitors to reflect on how their actions affect the local environment and cultural spaces, promoting mutual respect and reducing conflict (Burtis & Wise, 2024).

Another strategic opportunity lies in enhancing the shared use of facilities and services. As an aging nation with a large elderly population reliant on accessible public transport, Japan faces unique challenges when tourist volumes overwhelm buses and trains (Burtis & Wise, 2024). Kyoto’s introduction of dedicated express buses for tourists illustrates how cities can reduce pressure on daily commuter systems while improving the visitor experience. Complemented by multilingual apps and real-time information platforms, this model helps decongest public transport for residents while offering tourists clearer, more efficient mobility options (Asia News Monitor, 2025). Scaling similar systems across other high-traffic cities could reinforce social sustainability and strengthen destination resilience.

However, Japan must also contend with significant environmental risks, which represent one of the most severe long-term barriers to competitiveness. According to the World Economic Forum (2024), extreme weather events, particularly typhoons and earthquakes, constitute the highest-severity risks in both two- and ten-year outlooks. Tokyo’s environmental ranking is notably impacted by its high exposure to natural disasters, with the potential severity of earthquakes and typhoons exceeding that of nearly any other major city (Oxford Economics, 2025). The consequences are evident: widespread blackouts, transportation paralysis, attraction closures, and large-scale service disruptions. After Typhoon No. 15 in 2019, for example, Tokyo Electric Power Company reported 11.8 billion yen in losses due to infrastructure damage, underscoring the vulnerability of essential systems (Yoshiuchi et al., 2024). For tourists, such events pose direct safety risks and can rapidly destabilize travel flows.

A second emerging barrier, societal polarization, is increasingly relevant in destinations experiencing rapid tourism expansion. Although not yet as acute as environmental threats, rising tension between residents and visitors could undermine local support for tourism development if left unaddressed.

A Closer Look: Current Tourism Tactics

Japan has begun implementing targeted strategies to address the pressures created by its rapid tourism recovery. One prominent initiative is Kyoto’s expansion of its tourist-specific transportation network, including express bus routes designed to reduce overcrowding on public transit. These routes shuttle visitors directly between major attractions, while multilingual digital platforms provide real-time updates and route information. This approach eases daily mobility for residents, particularly the elderly population who rely heavily on public transportation, while giving tourists clearer, more efficient navigation options (Asia News Monitor, 2025; Burtis & Wise, 2024).

A second key effort is the national and municipal adoption of visitor-education and etiquette programs that promote respectful behaviour in culturally sensitive spaces. Kyoto’s “Mind Your Manners” campaign, featuring multilingual videos, signs, and behaviour guidelines, encourages tourists to observe local customs and minimize disturbances in residential districts. By emphasizing mutual respect, these initiatives help alleviate overtourism tensions and strengthen long-term community support for tourism growth (Burtis & Wise, 2024).

Japan’s position as one of the world’s leading tourism destinations is supported by exceptional cultural depth, strong economic assets, and sustained global demand. However, the TTDI results make clear that competitiveness is no longer guaranteed through resources alone. Pressures from overtourism, demographic realities, and environmental volatility require Japan to adopt more proactive and community-centered strategies. Current efforts from express transit systems to etiquette education, demonstrates movement in the right direction, but broader structural reforms will be essential. Japan’s long-term success will depend on its ability to balance growth with sustainability, ensuring that tourism enhances rather than overwhelms local environments and communities.

References

Asia News Monitor. (2025). Japan: Can Japan solve its growing overtourism crisis? Asia News Monitor.https://sait.primo.exlibrisgroup.com/permalink/01SAIT_INST/1u7fvls/cdi_proquest_newspapers_3165900956

Bononi, E. (2025). The role of social media in Japan’s overtourism crisis. Haaga-Helia University of Applied Sciences. https://www.theseus.fi/bitstream/handle/10024/891631/Bononi_Elena.pdf;jsessionid=8BF749AFF48BA416CC5C8ED8F9EE7002?sequence=2

Burtis, C., & Wise, N. (2024). Viewpoint: The overtourism strain on Kyoto: Economic policies and community impacts. Local Economy, 39(5–6), 283–288. https://doi.org/10.1177/02690942251350117

Craig, T. (2020). The “Cool Japan” strategy: Industrial policy for cultural industries. In T. Craig (Ed.), Cool Japan: Inside Japan’s cultural and creative industries (p. 8–30). BlueSky Publishing.

Fortune. (2020). Japan: Japanese Fortune Global 500 companies based in Tokyo 2020: Fortune Global 500 companies with headquarters in Tokyo in Japan as of 2020, by revenue (in billion U.S. dollars). [Dataset]. Statista Ltd.

Freedman, A., & Slade, T. (2018). Introducing Japanese popular culture: Serious approaches to playful delights. In A. Freedman (Ed.), Introducing Japanese popular culture (p. 1–10). Routledge. https://doi.org/10.4324/9781315723761

France Vélo Tourisme. (n.d.). Preparing Your Cycle Trip in France. https://en.francevelotourisme.com/tips-and-advices/preparing-your-cycle-trip-in-france

Government of Canada. (2025). Travelling to Europe. Government of Canada. https://travel.gc.ca/travelling/travelling-europe

Japan National Tourism Organization. (n.d.). Travel Japan – The Official Japan Guide [Online image]. JNTO. https://www.japan.travel/en/ca/

JTB Communication Design. (2021). Tokyo: All About the Business & Events Center of Japan. [Online image]. https://me.jtbcom.co.jp/blog/4277.html

Keegan, M. (2024). How destination marketers should tackle overtourism [Online image]. Campaign. https://www.campaignasia.com/article/how-destination%C2%A0marketers-should-tackle-overtourism/496653

Lewis, L., & Dempsey, H. (2025). Why Japan resents its tourism boom: Foreign visitor numbers have grown more than fivefold, putting huge pressure on popular destinations and, for some, providing an unwelcome reminder of the country’s long economic malaise. [Asia Region]. The Financial Times (London Ed.).

Nosigner. (n.d.). Project Cool Japan Proposal [Online image]. Nosigner. https://nosigner.com/en/projects/cooljapan/

Oxford Economics. (2025). Globel Cities Index 2025. https://www.oxfordeconomics.com/wp-content/uploads/2025/05/OEGCI2025.pdf

Severino, F. S. (2024). Using Japanese pop cultural heritage to create a tourist product Exploring otaku tourism. Tourism, 34(2), 103–114. https://doi.org/10.18778/0867-5856.34.2.07

Shin, H., Nicolau, J. L., Kang, J., Sharma, A., & Lee, H. (2022). Travel decision determinants during and after COVID-19: The role of tourist trust, travel constraints, and attitudinal factors. Tourism Management (1982), 88, 104428–104428. https://doi.org/10.1016/j.tourman.2021.104428

Sugiura, E. (2023). ‘Horizons have shrunk’: Japanese tourists reluctant to venture abroad over Covid fears. FT.Com.

UNESCO. (2010). Gastronomic meal of the French. UNESCO. https://ich.unesco.org/en/RL/gastronomic-meal-of-the-french-00437

Wang, X., Fang, M., Yang, C.-C., & Lai, P.-L. (2024). Revenge outbound travel in the post-pandemic era: evidence from an extended TPB model. Asia Pacific Journal of Tourism Research, 29(1), 79–95. https://doi.org/10.1080/10941665.2024.2308866

World Economic Forum. (2024). Travel & Tourism Development Index 2024. World Economic Forum.https://www3.weforum.org/docs/WEF_Travel_and_Tourism_Development_Index_2024.pdf

Yoshiuchi, H., Haruna, T., & Bembde, S. (2024). Fault Point Detection for Recovery Planning of Resilient Grid. 2024 International Conference on Smart Grid and Energy (ICSGE), 1–6. https://doi.org/10.1109/ICSGE61115.2024.00007