Why travel demand to visit China is low, but interest in Japan is high

With a plum position atop many “Best Places to Travel” lists, Japan is on track to welcome a record-breaking number of travelers in 2024.

But China faces a different reality: a far slower return of international visitors.

Both countries dropped Covid-related border restrictions relatively late — Japan in October 2022, and China in January 2023 — but their post-pandemic recovery trajectories have diverged ever since.   

Demand to visit China is on the rise, according to its National Immigration Administration, which announced a 130% year-on-year increase in foreign visitors from January to July.

Summer trips are up too, with inbound bookings doubling since last summer, a representative from the travel website Trip.com told CNBC Travel.

However, arrivals are still far below pre-pandemic levels. In 2019, China welcomed some 49.1 million travelers — as of July this year, around 17.25 million foreigners had arrived, according to Chinese state media.

Japan, for its part, is also struggling — but under the weight of its own popularity.

More than 3 million international travelers have visited each month since March — well above 2019 levels.

Beyond the cultural fascination with Japan, the country’s current “it” status is partially the product of initiatives put in place by the Japanese government, said Joydeep Chakraborty, chief strategy and investment officer at the Southeast Asian travel app Traveloka.

“The government has long been focused on making Japan a top travel destination through pro-tourism efforts, such as enhancing traveler experiences and simplifying the travel process for international visitors,” he said.

These efforts were then accelerated by the depreciation of the yen, he said.

“The USD/JPY exchange rate [moved] from approximately 140 in January 2024 to over 160 by July 2024, making Japan more affordable,” said Chakraborty.

Now “overtourism” in Japan is making headlines again, as crowds pack Kyoto’s famed temples and jockey for space during peak cherry blossom season.

The country’s labor market — one of the tightest in the advanced world before the pandemic hit — is straining to keep up. This year, 85% of travel and hospitality operators limited operating hours because of labor shortages, according to the Japan Federation of Service & Tourism Industries Workers’ Unions.

“The Chinese government’s tightening grip on societal regulations could potentially cause discomfort for foreign travellers in China,” states an article on its website titled “Visa-free policies alone will not revive China’s inbound tourism.”  

China’s expansion of its visa-free policies is spurring demand to visit. Some 58% of arriving travelers in the first half of 2024 came countries with such arrangements, according to its National Immigration Administration.

But a Pew Research Center report shows that, among 35 surveyed countries, more than half have unfavorable views of China. According to the July report, some of the world’s biggest travel spenders — such as those from the United States, Germany, the United Kingdom and France — maintain largely negative views of China.

China’s favorability views in the report are highest in sub-Saharan Africa as well as Asia, though opinions are mixed in the latter.

“Views tend to be among the most and least positive in the Asia-Pacific region — more positive in middle-income countries like Malaysia and Thailand, and more negative in high-income ones like Australia, Japan and South Korea,” the report states.

Addressing those issues is imperative to attracting foreign travelers back, writes Songshan Huang, a professor at Australia’s Edith Cowan University, in East Asian Forum.

“Booking high-speed train tickets or entry tickets to popular tourist attractions necessitates the use of WeChat’s embedded program,” he wrote. “Many establishments exclusively accept WeChat Pay or AliPay, leaving foreign tourists in a predicament if they rely solely on cash or credit cards.”