Osaka, long Japan’s “second city,” is winning the race against Tokyo to draw foreign tourists, but after a boom, its retailers and property developers are adapting to shifting tourism spending patterns.
OSAKA/TOKYO (Reuters) – Osaka, long Japan’s “second city,” is winning the race against Tokyo to draw foreign tourists, but after a boom, its retailers and property developers are adapting to shifting tourism spending patterns.
Inbound tourism to Osaka surged five-fold between 2012 and 2017, faster than visits to Tokyo, as the city lured low-cost carriers and promoted itself as a base to visit the 25 World Heritage sites in nearby Kyoto and Nara.
Initially, developers and retailers scrambled to build new hotels, expand floor space, and install cashless payment systems like AliPay and WeChat to keep up with the sudden influx of big-spending tourists, mostly from China.
But tourism is entering a new phase now, where instead of loading up on luxury brands, visitors want to spend more on services like makeup consulting, maternity goods, and other cheaper items.
Businesses expect that to become the norm – and to provide a permanent boost to the economy of the Kansai region around Osaka as the city prepares to build a large casino resort.
“Osaka was running at full speed on tourism, but now we’re moving to a more sustainable pace of growth,” said Takeshi Yamaguchi, associate director of research at real estate consulting firm CBRE in Osaka.
“Compared to Tokyo, Osaka is positioned for longer and more sustainable growth in development and tourism because of things like the integrated resort,” Yamaguchi added. TOURIST BOOM
The success of Osaka, long overshadowed by Tokyo and dismissed as gritty and chaotic, has caught analysts by surprise.
The city’s compact layout and food culture have proven a hit with Asian tourists, and that has created new opportunities for start-ups, social media marketing consultants and foreign property developers.
