Japan’s foodservice sector gains from tourism revival

The reopened borders and weaker yen are expected to attract tourists.

The Japanese foodservice sector is expected to benefit from a revival in tourist arrivals after the country reopened its borders and lifted entry restrictions for international tourists to boost the economy, according to a report from GlobalData.

The reopening of borders and a weakening yen are expected to make the country an attractive travel destination, the report noted.

Parthasaradhi Reddy, consumer analyst at GlobalData, said the tourism and on-premise consumption of food and drinks in Japan can even be improved as the country reverts to the old practice of visa-free travel.

“The Japanese foodservice sector has been significantly impacted by the lack of tourism due to the COVID-19 containment measures, especially the requirement of visas for travellers from countries that were hitherto exempt from such requirements,” Reddy said.

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He noted that on-premise consumption of soft drinks is expected to grow by 3.8% in 2022 following two years of decline, whilst on-premise consumption of beer is expected to post double-digit growth of 12.5% in 2022 and 14.3% growth in 2023

“Together with the country’s initiative to encourage alcohol consumption, it raises hopes of a recovery in the consumption of beverages,” Reddy added.

International tourists coming from countries such as South Korea, Hong Kong, Taiwan, Malaysia, Singapore, Thailand, and Australia will be exempted from visa procedures, but they will be required to present COVID-19 vaccination proofs or negative COVID-19 results for entry.

Vishakha Rastogi, another consumer analyst at GlobalData, noted that mandatory signing requirements for escorted package tours will also be removed, which has been in effect since June 2022, along with lifting the cap on the number of arrivals. These are expected to boost the overall tourist sentiment.

Moreover, the revival in tourist arrivals will see an increased use of cashless payments across restaurants, including contactless credit cards and mobile payment services as a measure towards reducing contact GlobalData said.

The visitors are also expected to avail the services of UberEats and Demae-can, the major food delivery apps in Japan, to locate nearby restaurants.

“Japan is also optimistic about the return of tourists due to the weakening yen. However, the shortage of regular workers in the foodservice sector will likely impact its growth prospects despite an expected increase in inbound tourism in the coming years,” Rastogi said.