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“Foreign travelers are Japan’s guests” – Governor against charging tourists more than locals

Casey Baseel May 10, 2024
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Top politician in Tokyo’s neighbor says higher prices for inbound travelers would be like fining them for coming to the country.

Japan finds itself in an unprecedented situation right now. The pandemic was, obviously, a difficult period for the travel, hospitality, and restaurant industries, and they’re all eager to make up for lost time/profits now that the various related precautions and protocols are over.

So Japan receiving record numbers of foreign tourists, all of whom need places to stay, food to eat, and things to do while they’re here, seems like it should be a simple, and happy, solution to the problem, especially since the currently favorable currency exchange rate for foreign tourists means they’re willing to spend more lavishly while they’re in Japan. But here’s the thing. That favorable exchange rate for inbound foreign tourists is putting the pinch on Japanese consumers. The weak yen means that Japanese companies, who are largely reliant on imports for their raw materials, are seeing their expenses increase, and they haven’t been shy about passing those costs on to consumers by raising prices. Japan is currently seeing its highest inflation rates in decades, and without any corresponding cost-of-living wage increases for locals.

This is creating a situation where hotels, restaurants, and other travel-related entities are eager to rake in extra revenue from crowds of flush-with-cash foreign tourists, while at the same time price increases are feeling increasingly painful to the people of Japan. As a result, nijukaku, “two-tiered pricing,” has become a topic of public discussion, as some float the idea of having two different prices for restaurants and other tourism services, a higher price for foreign tourists, and a lower price for Japanese locals. We recently took a look at a Tokyo restaurant that’s already got such a system in place, but on the other side of the debate is Yuji Kuroiwa, governor of Kanagawa Prefecture, Tokyo’s neighbor to the south.

During an appearance on last week’s installment of Fuji TV’s news program The Prime, the 69-year-old Kuroiwa, who has no political party affiliation and has been governor of Kanagawa since 2011, declared that he is adamantly opposed to charging higher prices to foreign travelers, saying:

“I am strongly against this idea. Foreign travelers are, from the perspective of Japan and its people, our guests. We have been saying, for so long, ‘Please come visit us,’ and now that they are, you want to say ‘Oh, hey, we’re gonna take some extra cash from you guys?’ It’s like collecting a fine from them for coming to Japan. I am strongly against splitting pricing policies like that.”

In response, one of the program’s regular panelists, lawyer and political commentator Toru Hashimoto, said that he felt that charging higher prices to foreigners was a way in which to provide proper support to inbound travelers. Citing the costs of things like administrative infrastructure and hospitals, Hashimoto pointed out that Japanese locals pay taxes to support their development, and opined, “I think it is necessary to have foreign tourists pay something in lieu of the taxes [that the people of Japan] pay.”

Even without directly addressing the questionable insinuation that foreign tourists significantly benefit from the Japanese hospital system, Kuroiwa was ready with a counter-argument.

“But Japanese people also receive many benefits from those things. And the situation with foreign tourists is the same as when Japanese people travel domestically to someplace other than where they live. If someone comes to [the Kanagawa town of] Kamakura from another prefecture, they’re not paying taxes to Kamakura, but we still allow them to make use of city services.”

There’s something else which Hashimoto overlooks in his argument that foreign tourists should pay something “in lieu of taxes,” which is that foreign tourists do pay taxes, in the form of sales/consumption taxes for food and shopping items, as well as accommodation and hot spring taxes at hotels in jurisdictions that levy them. Granted, those tax payments are indirect, as they’re paid by the restaurants, shops, and hotels, but the cost of those taxes is built into the prices they charge. Claiming that foreign travelers aren’t contributing to Japan’s tax coffers is disingenuous, or at least short-sighted, and so charging them extra isn’t the sort of welcome that Kuroiwa wants to give guests from overseas during their time in Kanagawa.

Source: FNN Prime Online
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