July 25, 2024

It’s no secret: more tourists are visiting Japan than ever before. That has some Japanese businesses up-charging for their services, raising prices for tourists and cash-strapped locals alike.

That disparity has some wondering whether businesses shouldn’t implement separate pricing for tourists. While there’s public support for the idea, some merchants aren’t ready to jump on the bandwagon.

The weak yen makes Japan a steal. Is that fair?

Of course, people wanting to travel to Japan is not a new phenomenon. The country’s unique culture and natural beauty have made it a popular tourist draw even before most countries shut down travel in 2020 to protect public health.

But then tourism came back – in a huge way. More people are visiting Japan now than they did in the heyday of tourism back in 2019, which already saw the country set record numbers. Travel from South Korea, in particular, is at an all-time high. Many travelers from Korea have rated Japan the best travel deal from a cost/performance perspective.

The other factor is the country’s weak yen. The Bank of Japan’s policy of pursuing a weak currency has made it harder for those who work in Japan to get value from their money abroad. But it’s been a boon for foreign tourists, who find their currencies—particularly dollars—go a long way.

That has some wondering if local businesses shouldn’t jack up prices. After all, many businesses in Japan are struggling to stay afloat thanks to rising prices. And, as the prices at the popular ski resort town Niseko show, tourists don’t seem to mind paying more than locals. (Most of them probably don’t even know that they are, to be honest.)

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Rising prices negatively impact locals

NTV asked a group of Japanese women visiting Tokyo if they'd pay 5000 yen (USD $33) for a bowl of ramen. The answer was a clear no. "We don't have that kind of money."
NTV asked a group of Japanese women visiting Tokyo if they’d pay 5000 yen (USD $33) for a bowl of ramen. The answer was a clear no. “We don’t have that kind of money.” (Source: YouTube)

Some shops in popular tourist spots are already up-charging. NTV reports on one shop in Tsukiji, Japan’s famous seafood market, that’s selling a bowl of seafood ramen for 5,500 yen (USD $37).

Foreigners may be willing to pay that. Practically no Japanese citizen or resident would, however. Ramen here typically sells for under the 1000 yen (USD $6.71) mark. When asked if they’d pay 5000 yen for ramen, three Japanese tourists to Tokyo flat-out said no. “We don’t have that [kind of money],” one replied.

And that’s a real problem. Tourist spots aren’t just tourist spots. They’re also places where people work and live. If businesses raise prices to get more money from tourists, it could price out locals who need a hot meal while on the go.

60% approve of a two-tier charging system for tourists

That has some analysts suggesting that businesses operate a “two-tier” pricing system. In this system, a bowl of ramen that costs 1000 yen for locals would cost 3000 yen for visitors.

Proponents liken this to a “reverse discount,” operating similarly to how student and senior discount prices currently work. This would be good for businesses and workers, as it would enable businesses to boost wages. Some also say it could help combat overtourism, an increasing problem here.

The idea isn’t without precedent. For example, some golf clubs in Hawaii charge tourists more than double what locals pay. Some Buddhist temples in Thailand also charge tourists for entering, while residents can enter for free.

The idea has some traction. Loyalty Marketing, which runs the points program Ponta, asked 1,200 people between their teens and their 60s whether a two-tiered pricing system was a good idea. Over 60% said yes, with the numbers pretty consistent across age groups. People in their 20s agreed the most, with 33% agreeing and 32% slightly agreeing. Those in their 30s and 40s agreed the most, at 35%. Only those in their 60s were slightly sour on the idea, at around 49% with 32% slightly opposed.

Table of survey results from Ponta showing how many people agree businesses in Japan should implement a two-tier pricing system.

Are shopowners on board?

However, businesses don’t appear to be on board with the idea. NTV did an informal survey around Ameyoko, a popular shopping district in Tokyo’s Ueno. Out of 30 shops surveyed, only five supported the idea of a two-tier pricing system.

Some shopkeepers said that raising their prices would drive customers away. Others said that they simply thought it was unfair.

“It feels like you’re deceiving people,” said one. “We want foreigners to feel pleased with their experience,” another said.

A locals discount?

Any such system would require proof that you live in Japan to avoid the tourist tax. That’s easy enough to provide, as residents could show one of several documents – their residence card, a driver’s license, or even their My Number or national health care cards.

One suggestion is that, instead of charging tourists a high price, businesses could offer a “locals discount.” However, this would require showing proof of residence every time you eat out, which can be a pain.

On the flip side, only businesses in highly trafficked tourist areas would implement the change at first. So, it’d only impact residents who are eating out while at work or on the go. However, once it takes off in tourist traps, it’s hard to see such a change not percolating throughout the country.

Another solution is to charge higher prices uniformly – though not as high as, say, 5500 for a bowl of noodles. That’s how some local restaurants such as Ramen Break Beats are handling it. Break Beats charges 2000 yen (USD $13) for one of their bowls. That’s expensive by normal Japanese standards – but still less than you’d pay at a ramen shop abroad. And while pricier than a normal bowl of ramen, it’s not out of reach for locals.

My initial reaction to the idea of a two-tier system was opposition. The more I think about it, however, the more I think it could be good for Japanese businesses and Japan’s economy in general. The tourism boom shows no signs of stopping, and businesses should strike while the iron is hot.

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Sources

【別の値段】「外国人観光客向け」と「日本人向け」 “二重価格”の導入は… NTV via YouTube

『観光における二重価格に関する調査』ラジオ番組「馬渕・渡辺の#ビジトピ」と共同調査/国内の観光業界における二重価格の設定に、全体の約6割が「賛成」. PRTimes

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