The sharp devaluation of the yen has led to an influx of foreign tourists in Japan, prompting many restaurants and tourist attractions to contemplate implementing “special” pricing for these visitors.
The practice of charging foreign tourists higher rates than local visitors is not unique to Japan and is common in various developed countries. Nonetheless, some Japanese citizens express concerns that this approach could tarnish Japan’s reputation as a premium tourist destination and potentially deter certain tourist groups. Conversely, many businesses view this strategy not as “exploiting” tourists but as an “urgent necessity,” pointing to rising wages that correlate with the increasing influx of tourists.
“How can we charge local prices to those who primarily speak Japanese for foreign tourists requiring specific English-language services?” Shogo Yonemitsu, the owner of the Tamatebako seafood buffet restaurant in the vibrant Shibuya district, stated.
Since its opening in April, Tamatebako has been offering two buffet pricing options that include drinks: 7,678 yen for foreign tourists (on weekdays) and 1,100 yen for Japanese residents and foreign residents.
“We serve 100-150 customers daily, and our restaurant accommodates 35 people. Every moment feels like a battle, no matter how hard we try. We need to devote additional time to assist foreign customers by explaining our buffet setup, how to grill, and how to eat, all in English,” Yonemitsu explained, noting that there is a necessity to raise wages to employ English-speaking staff and provide special training for serving foreign customers.
While some restaurants have managed the issue by increasing menu prices, Yonemitsu believes it is unjust to charge foreign tourists more than Japanese or local customers.
A Japanese female employee at a Thai restaurant in Tokyo supports the dual pricing system. “Given the significant depreciation of the yen, I believe it’s fair to charge foreign tourists more.” Her colleague noted that in Thailand, different rates are applied to foreigners as opposed to locals, especially at temples, which are key tourist attractions.
The organization managing popular tourist sites in Japan is also weighing the possibility of imposing higher charges on foreign visitors, as the influx has resulted in increased maintenance costs. For instance, the mayor of Himeji City has proposed charging foreign tourists four times more than Japanese citizens for entry to Himeji Castle.
Himeji Castle
Himeji Castle, constructed in the early 17th century and made entirely of wood, currently charges an admission fee of 1,000 yen for individuals aged 18 and above. It is recognized as a World Cultural Heritage Site by UNESCO and designated as a National Treasure of Japan.
The Osaka prefecture government is also considering implementing a special tax on foreign tourists, likely set to commence in April 2025, coinciding with the World Expo 2025, with the goal of generating revenue to manage the surge in tourists.
However, many experts advise businesses and organizations to contemplate carefully and rationally the implementation of a dual-pricing system that charges international tourists more than locals, emphasizing that the higher prices are intended to enhance the overall visitor experience.
Loyalty Marketing Inc., a marketing data firm in Japan, conducted a survey regarding the dual-pricing system, published in February. Approximately 60% of domestic respondents expressed support for the system’s introduction. Some suggested that if foreign tourists were to be charged more, services should be offered in multiple languages, along with guides, special services, or small gifts.
“It’s great to have a substantial number of tourists, but an overabundance can pose challenges.” Nick Sakellariou, a Swedish tourist visiting Japan, agreed that it may be reasonable to charge foreign visitors more during peak tourism times. However, he added that in his home country, a dual-pricing system might be perceived as “racist” or “ethnic discrimination.”
This pricing strategy is not unprecedented, as many tourist attractions around the globe have increasingly imposed extra fees on foreign tourists, particularly in areas grappling with overtourism. For instance, Venice, Italy, requires a daily entrance fee of 5 euros, while Diamond Head National Park in Hawaii, USA, allows Hawaii residents free entry, but charges out-of-state and international visitors a $5 admission fee.
Source: Surge in inbound tourists pushes Japan to explore dual pricing
Photo: Unsplash
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The Sharp Depreciation of the Yen: Impacts on Foreign Tourism in Japan and the Rising Dual Pricing Debate
The recent sharp depreciation of the yen has significantly influenced foreign tourism in Japan, drawing in a large number of international visitors. As the influx of tourists increases, many restaurants and tourist attractions are now weighing the option of implementing dual pricing systems that charge foreign tourists at different rates compared to domestic visitors.
Understanding the Dual Pricing System
The concept of charging foreign tourists different rates than locals isn’t unique to Japan. Many developed countries have established this system as a way to manage tourist inflow and cover rising operational costs. However, reactions are mixed among the Japanese populace. Some fear this approach may tarnish Japan’s reputation as a premium travel destination, potentially causing certain tourist demographics to shy away from visiting.
The Business Perspective
For many businesses, the dual pricing system is perceived not as an exploitation of tourists but as an urgent necessity. Shogo Yonemitsu, the owner of Tamatebako seafood buffet in Shibuya, states:
“How can we charge the prices of locals who primarily speak Japanese for foreign tourists who need special English-language services?”
Since opening in April, Tamatebako has implemented two buffet price categories: 7,678 yen for international guests and 1,100 yen for Japanese residents and local foreigners. Yonemitsu elaborates:
“We have 100-150 customers daily, with a capacity of 35. Every second feels like a battle! We need more time to cater to foreign customers—explaining the buffet process, how to grill, and how to eat—all in English. Consequently, we must raise wages for hiring English-speaking staff and invest in special training for these employees.”
The Cultural Sensitivity Debate
While some local employees, including a woman from a Thai restaurant in Tokyo, support the dual pricing framework, citing a need for price adjustments due to the yen’s depreciation, others express discomfort. “In Thailand, it’s common for foreigners to pay different rates at temples, which are key tourist sites,” she noted.
The city of Himeji exemplifies this growing trend: the mayor has proposed a fourfold increase in entry fees for foreign tourists at Himeji Castle, a UNESCO World Heritage Site, currently priced at 1,000 yen for domestic visitors.
The Call for a Managed Approach
In Osaka, local government officials are considering introducing a special tax on foreign tourists by April 2025, coinciding with the anticipated World Exposition. These strategies underscore the necessity to find sustainable revenue streams to support the burgeoning tourist economy.
Yet, experts urge a rational approach to implementing dual pricing, encouraging businesses to clarify the purpose behind higher fees—primarily aimed at enhancing the foreign visitor experience.
Public Opinion on Dual Pricing
A survey by Loyalty Marketing Inc. conducted in February revealed that 60% of domestic respondents supported the dual pricing system. Many suggested that if foreign tourists were to incur higher charges, the experience should be enriched with multilingual services, guided tours, and even small tokens of appreciation.
International Perspectives on Dual Pricing
Nick Sakellariou, a Swedish visitor, concurs that higher charges for foreign tourists may be justified, especially when tourism spikes. However, he cautions against the potential for such a system to be perceived as discriminatory in his home country.
Interestingly, Japan isn’t alone in exploring these strategies. Globally, many tourist hotspots have adopted similar means of managing overtourism. For instance:
- Venice, Italy, now imposes a €5 daily entrance fee for visitors.
- Hawaii’s Diamond Head National Park permits locals free access while charging out-of-state and international visitors a $5 fee.
Benefits of Dual Pricing for Foreign Tourists
- Enhanced Services: Higher entry fees can lead to improved facilities and services specifically tailored for international guests.
- Preservation of Cultural Sites: Increased revenue could aid in the maintenance and preservation of historical and cultural sites.
- Job Creation: Growing demand for services may lead to increased job opportunities, particularly for multilingual and trained staff.
Case Study: Himeji Castle
| Visitor Type | Current Entry Fee (Yen) | Proposed Future Fee (Yen) |
|---|---|---|
| Japanese Citizens | 1,000 | 1,000 (No Change) |
| Foreign Tourists | 1,000 | 4,000 (Proposed) |
Practical Tips for Tourists
- Research Costs: Always check entry fees in advance, especially if you are a foreign visitor.
- Ask About Discounts: Inquire about any available discounts or package deals for attractions you’re interested in.
- Be Open to Cultural Differences: Acceptance of different pricing systems may vary widely; embrace the experience as part of the adventure.
As Japan experiences a surge in foreign tourism driven by the yen’s depreciation, the debate surrounding dual pricing will likely intensify. It’s essential for stakeholders to balance the economic needs of the industry while maintaining Japan’s esteemed global image.
Source: Surge in inbound tourists pushes Japan to explore dual pricing
Photo: Unsplash
Other interesting stories: Over 55% of ‘high-income Thais’ plan to travel 3-4 times in 2024, most want to go to Chiang Mai-Phuket
Don’t miss other interesting articles and stories. Follow us on Facebook Forbes Thailand Magazine.
