TOKYO — As Japan sees high levels of spending by inbound tourists amid the weak yen, some establishments are moving to introduce “dual pricing,” charging Japanese customers and foreign visitors different prices. While this is a move fueled by the explosive growth of inbound tourism to Japan, some voice concern over its potential adverse effects.
“We love seafood, and this feels cheap. As Japanese, it’s great to get such a deal,” said a smiling Tsumugi Sano, 20, and her boyfriend Tomoya Seki, 19, as they enjoyed grilled crab and scallops at seafood buffet restaurant Tamatebako one evening in late July. Tamatebako, which opened in Tokyo’s Shibuya Ward in April this year, offers an all-you-can-eat buffet with 60 types of seafood. Inbound tourists could also be seen inside the bustling restaurant, with a family of three enjoying crab and scallops after asking the staff how to order the dishes.
Tamatebako has, in effect, adopted a dual pricing system. On weekdays, male foreign tourists are charged 8,778 yen (roughly $59, including tax) for dinner, but Japanese men and male foreign residents of Japan receive a discount of 1,100 yen (about $7). Among women, foreign visitors are charged 7,678 yen (around $52), while the same 1,100 yen discount applies to Japanese nationals and foreigners living in Japan. The restaurant staff determines eligibility for the discount by checking if the customer speaks Japanese or has a residence card upon entry. According to the restaurant, there have been no issues with this system so far.
The main reason for introducing dual pricing is the increased costs associated with the rise in foreign tourists. At Tamatebako, where about 20% of customers are foreigners, staff who can speak English are employed. Owner Shogo Yonemitsu, 39, exlains, “Foreign customers take much longer to order and pay, so labor costs are higher. It’s only fair to make a distinction in the pricing.”
At the same time, Yonemitsu says that dual pricing is also a measure to prevent the loss of Japanese customers, saying, “We could set higher prices across the board, but that would give the impression that our restaurant is only catering to foreigners. We also have to consider the risks in the event foreign visitor numbers drop.”
The concept of dual pricing is also being considered in other famous tourist destinations. The Himeji Municipal Government in Hyogo Prefecture is considering raising admission fees for foreign visitors at Himeji Castle, a UNESCO World Heritage site managed by the city. Himeji Mayor Hideyasu Kiyomoto notes, “It’s common overseas to ask foreign visitors to bear higher costs,” and apparently plans to use the additional revenue for the long-term preservation and repair of the castle.
The growing interest in dual pricing is fueled by the rapid expansion of inbound tourism. The government announced in July that the estimated number of foreign visitors to Japan in June was 3,135,600, a new monthly record.
The contribution of inbound tourism to Japan’s economy is also increasing. Nominal inbound consumption for the April-June 2024 quarter was 6.8 trillion yen (some $45.6 billion) on an annualized basis according to preliminary figures — more than four times the approximately 1.6 trillion yen (approx. $10.8 billion) recorded 10 years ago. Dual pricing is seen as a potential driver for further expanding inbound spending.
However, this rapid growth also has its downside. So-called “overtourism” marked by overcrowding on public transportation and disrespectful behavior breaching local etiquette, among other issues, is affecting the lives of local residents. Additionally, some point out that hotels and restaurants in tourist areas are becoming overpriced for Japanese customers, who are just beginning to see the benefits of wage increases. Dual pricing could be a way to help fund the infrastructure needed to accommodate inbound visitors and bridge the purchasing power gap between domestic and foreign customers.
Cautious opinions on dual pricing
However, some remain cautious about dual pricing. A survey conducted in February by Loyalty Marketing Inc., which operates the Ponta point service, found that around 60% of respondents supported the introduction of dual pricing, but roughly 40% opposed it, citing concerns about discrimination and the potential damage to Japan’s reputation.
Yoshihiro Sataki, a professor at Josai International University versed in tourism policy, points out that if public facilities such as Himeji Castle adopt dual pricing, they “must provide reasonable justifications.” He further warns, “In this age of globalization, strictly distinguishing between Japanese and foreign tourists is challenging, and it could lead to complications and trouble.”
(Japanese original by Shu Furukawa, Business News Department)
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