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The Inevitability of Tokyo? Japan’s Tourism Boom and Urban Centralisation

22 Jan 2025
By Maximilien Xavier Rehm
Crossing in Tokyo, outside Shibuya station. Source: Dimirty B. / https://t.ly/zCmHC

Japan welcomed over 36.8 million tourists in 2024, a new record. This influx, along with a growing foreign resident population, is seemingly intensifying the centralisation of people in Tokyo, despite ongoing government efforts to counteract regional depopulation.

Japan is experiencing an unparalleled tourism boom. The Japan National Tourism Organization (JNTO) recently reported that 2024 was the year with the highest number of foreign visitors in the country’s history, with over 36.8 million tourists coming to Japan. December 2024 alone saw more than 3.4 million visitors, a new record for a single month. This is a dramatic reversal from just a couple of years ago; Japan was one of the last countries to reopen once the worst effects of the COVID-19 pandemic abated, only doing so in October 2022. The pent-up demand for travel to Japan is thus one of the reasons for the tourism boom. This is in combination with a weak Yen, making travel to the country significantly more affordable than in the past.

An increasing number of foreigners are choosing to settle in Japan as well. As of June 2024, the foreign population of Japan reached 3.58 million, a record high. In 2023 alone, more than 330,000 foreigners migrated to the country. All of this comes amid Japan’s well documented demographic issues, as the combination of a low birth rate and an ageing society is leading to a decrease in the overall, and especially working-age, population. In this area, too, Japan is setting records: 2023 saw the overall population of Japanese nationals drop by more than 830,000, the highest number ever recorded for a single year.

All of these trends have interlocking effects. New foreign residents are increasingly called to fill domestic labour shortages due to the structural decrease in the domestic workforce, while the tourism sector is one of the few economic growth sectors amid a shrinking domestic market. However, there are other less obvious effects as well, one of which is Japan’s unprecedented centralisation of the population in urban areas—specifically Tokyo—a trend that can be observed not only for the country’s domestic population but also for the increasing number of foreign visitors.

Let us first look at the data. In 2022 and 2023, Tokyo was the only prefecture in Japan that recorded positive population growth, with a 0.2 and 0.34 percent uptick respectively. Considering that Tokyo simultaneously has among the lowest birthrates in the country, at 0.99 in 2023 (the Japanese average was 1.2), this implies that this population growth stems primarily from the internal migration of the Japanese population to the capital. Interestingly, tourists are increasingly concentrating a majority of their time in Japan in and around Tokyo as well. Comparing the total number of nights spent by foreign visitors to Japan by region shows that only Kantō (the Greater Tokyo Area) saw an uptick when comparing 2019 to 2023 numbers. All other regions of Japan actually saw a decrease in visitors.

Tokyo is already Japan’s commercial, industrial, political, and entertainment center, with the economic opportunities that this represents undoubtedly behind its attractiveness for Japanese people from other areas of the country. If the capital is the primary benefactor of the tourism boom as well, this could create a virtuous cycle in which the economic benefits from the tourism sector lead to improved infrastructure and job prospects for Tokyoites—in turn further increasing its appeal. On the other hand, this would imply accelerated depopulation of the rest of Japan, and thus even more centralisation. Of course, depopulation of Japan’s localities brings with it a host of issues, most pressingly the interconnected concern of decreased local tax revenue and increased pressure on healthcare infrastructure due to a concentrated ageing population.

The Japanese government has sought to address the consequences of regional depopulation and increased urban centralisation since at least the second Shinzo Abe administration (2012-2020). Indeed, “regional revitalization” was one of the late prime minister’s trademark policies, and included everything from investments into local disaster preparedness and other infrastructure, attempts to stimulate local economies through subsidies and incentives, and the expansion of a popular tax scheme that allows participants to “donate” a portion of their local taxes to a regional municipality of their choice in exchange for locally produced products. Abe’s successors broadly continued such policies, with the Kishida (and the current Ishiba) administration expanding on them through industrial policy, including massive subsidies to turn Kumamoto into a hub for semiconductor manufacturing. Taiwan’s TSMC recently opened a factory in the prefecture, which started mass production in December of 2024. However, given the data cited above, these measures have at best resulted in a slowing down of the overall trend towards centralisation in Tokyo.

There is evidence to suggest that young Japanese people are interested in pursuing opportunities outside of Tokyo. The pandemic did produce a short-lived trend of migration away from the capital, undoubtedly as a result of social distancing guidelines and the adoption of remote work. Furthermore, a recent government survey showed that 35.1 percent of respondents from the Greater Tokyo Area were interested in more rural prefectures, a trend that was most pronounced among people in their twenties (44.8 percent). Over-tourism has probably contributed to a strain on the local infrastructure and the overall sense of overcrowding in Tokyo, by some measures the largest city in the world.

There is thus potential demand from a subset of Tokyo’s population to seek opportunities elsewhere, and the key will be to provide the correct incentives to make sustainable decentralisation a reality. Prime Minister Shigeru Ishiba’s recently approved budget for the fiscal year 2025 included a seven percent boost for central government grants to local governments. There have also been rumors of more non-conventional policy options, such as providing financial support for single women from Tokyo should they marry someone from a rural area and relocate.

Numerous municipalities have also bucked the overall trend: the city of Akashi in Hyogo has seen its population grow as young families take advantage of its generous child support programs, while numerous small resort towns in Hokkaido have experienced population growth related to the influx of tourism to the island and resulting economic opportunities. Such cases give a clue for potential policy priorities that the central government can target moving forward. However, as of now, the general trend towards centralisation in Tokyo persists, and only time will tell whether the new Ishiba administration’s countermeasures will prove more effective than those of his predecessors.

Maximilien Xavier Rehm is a Ph.D. candidate at the Graduate School of Global Studies Doshisha University in Kyoto Japan. His research focuses on Japanese politics, specifically migration and foreign policy. He holds an M.A. in International Relations from Ritsumeikan University. An updated list of his recent publications can be found on his personal website.

This article is published under a Creative Commons Licence and may be republished with attribution.