Attracting Tourists to Japan Through a More Varied Nightlife

Japan is in the midst of a major push to increase tourism, but there are fears that it does not offer enough nighttime fun for foreign visitors. A panel at the ULI Japan Spring Conference, held in Tokyo last May, discussed ways to build an attractive nighttime economy.

From a decade ago, when Japan received only about 7 million foreign tourists each year, the nation’s efforts to increase tourism have brought the number to nearly 30 million in 2017. However, the Japanese government wants this number to reach 40 million by 2020, the year of the Tokyo Summer Olympics, and 60 million by 2030.

The increased tourism has benefited owners of retail and leisure real estate, and the Japanese hotel sector has seen interest from overseas investors. For example, last year UBS launched a $400 million Japan hotels fund.

The desire to develop the nighttime economy was outlined by Tsukasa Akimoto, a member of Japan’s national legislature for the governing Liberal Democratic Party. Akimoto is heavily involved in the government’s attempts to boost tourism as deputy chairman of the Research Commission for the Establishment of a Tourism Oriented Nation.

Though Japan’s varied landscape, its rich culture and history, its food, and its safety make it an attractive destination, “foreign visitors say there is not enough to do in the evening, so we need to boost experience-based tourism,” Akimoto said. The government wants both the public and private sectors to get involved, he said.

Akimoto suggested that the Japanese nighttime staples of dinner, drinks, and karaoke are not attractive to foreigners, especially families who might consider the karaoke bar scene too rowdy. Furthermore, apart from a few districts of large cities, Japan does not have much to offer late at night. Dinner is usually over by 9 p.m. and most bars close at midnight, while the Tokyo subway closes at around 1 a.m.

Integrated casino resorts are set to be an important feature of the improved nighttime economy, Akimoto said, without giving details; further legislation for the development of integrated resorts is expected later this year.

Some legislation has been introduced: for example, dance clubs can now remain open until 5 a.m., though panel moderator Tak Umezawa, partner and Japan chairman at AT Kearney, noted that “dancing after your late 20s is embarrassing.” More needs to be done to provide activities for people of all ages, he said. Umezawa, who has been heavily involved with the “Cool Japan” initiative—which seeks to promote Japanese culture, especially youth culture—said this campaign should be integrated with efforts to build the nighttime economy.

Tomoe Makino, country adviser, Japan, at travel website TripAdvisor, argued that Japan has plenty of activities, but they all close too early. Museums and temples tend to close at 5 p.m., and concerts and shows are over by 8:30 p.m.

In addition, the language barrier means tourists find it difficult to discover what is going on and are often unable to book restaurants and buy tickets, he said.

Japan needed to develop long-running shows in the same way that New York City’s Broadway and London’s Covent Garden do, so tourists know they can see major productions, Umezawa said. “These theater districts also offer opportunities for real estate development—for hotels, bars, and restaurants,” he said. “In New York, you can stay and eat near the theater; in Japan, there are not enough hotels and restaurants near the attractions.”

Japan’s cultural conservatism and a labor shortage are obstacles to boosting the nighttime economy, Akimoto said. “Safety and security are an important part of Japan’s attractiveness, and we must be careful not to damage that,” he said. “Noise late at night could be a problem for residential areas.”

However, Japan does not need to be quite so hard on itself, said Jon Tanaka, ULI Japan vice chair and head of Japan real estate at Angelo, Gordon & Co. International. “Japan has all the right ingredients for successful tourism, retail, and entertainment,” he said. “It just needs to use them more fully.”