As cherry blossoms bloom, Japan faces lean tourist season

Tokyo, with its sleek shops and high-end restaurants, has long been a favourite destination for wealthy tourists, particularly those from Japan's faster-growing neighbours such as China.

The crisis around the crippled Fukushima power plant and reports of radiation in food have sparked a wave of cancellations by foreign visitors, dealing another blow to airlines, stores and restaurants in an economy already smarting from weak domestic consumption.

As the tourists stay away, it will also be bad news for department store operators Isetan Mitsukoshi Holdings (3099.T) and Matsuya Co (8237.T), as well as electronics retailer Laox Co (8202.T), all popular with visitors.

"Sales to overseas tourists, especially the Chinese, of high-end goods and personal electronics have been growing, but that will certainly stop," said Takayuki Suzuki, a retail analyst at Primo Research Japan."The increased levels of radiation ... have raised many fears, so I see many tourists avoiding Japan for a year, at least," he said.

In the upscale Ginza neighbourhood, a major tourist draw for its sprawling department stores and expensive boutiques, the crowds were noticeably thinner this weekend ahead of Monday's national holiday.

"We get a lot of visitors from China, Russia and other places during the cherry blossom season, but after the tragic destruction it's hard to see many tourists coming this year," said Shigeyuki Ando, manager of the Ginza branch of Ando Cloissone, a boutique selling pricey traditional ceramics.

The shop usually makes up to 10 percent of its sales from foreigners in the peak season, another manager at the store said, adding he had seen only a trickle of European visitors over the weekend, and no Chinese.

COUNTING ON ASIA

Travel and tourism were expected to contribute nearly 7 percent to Japan's gross domestic product this year, or 33 trillion yen, according to the International Air Transport Association, a forecast that will likely be scaled back following the quake.Squeezed by an ageing population and deflationary pressures, Japan has pushed to draw more tourists to offset weak domestic consumption, particularly from elsewhere in Asia.

A record 9.44 million foreigners visited Japan last year. In-bound Chinese jumped by more than a third to about 1.6 million, overtaking Taiwanese as having the most visitors to Japan, behind the South Koreans.

All tours from Hong Kong to Japan have been cancelled until the middle of next month, the Hong Kong Travel Industry Council said. Japan usually accounts for 20-30 percent of outbound tourists from Hong Kong, said Joseph Tung, executive director of the travel council."People are worried. Until the situation is clear, I don't think people will have any interest to visit Japan," Tung said.

Source = reuters