Japan counts cost of China’s travel boycott as tensions flare

Reuters:

TOKYO, Nov 19- Within days of China urging its citizens not to travel to Japan due to a diplomatic dispute, Tokyo-based tour operator East Japan International Travel Service had lost 80% of its bookings for the remainder of the year.

The small firm, which specialises in group tours largely for Chinese clients, is at the sharp end of a backlash that threatens to deal a sizeable blow to Japan’s economy, the world’s fourth largest.

The travel warning – triggered by Japanese Prime Minister Sanae Takaichi’s remarks about Taiwan, the democratically governed island claimed by China – has seen a wave of flight cancellations and battered tourism-related stocks in Japan.

“This is a huge loss for us,” said Yu Jinxin, vice president of East Japan International Travel Service.

Tourism accounts for around 7% of Japan’s overall gross domestic product, according to the World Travel & Tourism Council, and has been a major driver of growth in recent years. Visitors from mainland China and Hong Kong account for around a fifth of all arrivals, official figures show.

The boycott could result in a loss of around 2.2 trillion yen ($14.23 billion) annually, Nomura Research Institute estimates. Tourism-related stocks in Japan have sunk since the warning was issued on Friday.

Already more than 10 Chinese airlines have offered refunds on Japan-bound routes until December 31, with one airline analyst estimating around 500,000 tickets have already been cancelled.