China’s group tours can boost Japanese travel and retail stocks China’s group tours can boost Japanese travel and retail stocks China’s group tours can boost Japanese travel and retail stocks

China’s group tours can boost Japanese travel and retail stocks

Macro 5 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  China has lifted restrictions on group travel to countries such as Japan, Korea, US and UK. This could boost Japan’s visitor arrivals as China accounted for one-third of inbound tourists to Japan pre-pandemic. Chinese tourists also spent a significant amount on shopping while travelling, which could be boosted further by a weaker Japanese yen.


Last week, China’s tourism ministry announced an immediate lifting of restrictions on group travel to 78 countries. The list included Japan and South Korea, that have been long favourites for Chinese travellers, along with Australia, Germany, the UK and the US. Although individuals have been able to travel recently, with limitations from number of flights and the high prices, group travel had remained banned since January 2020 as a part of the pandemic restrictions.

Japan had inbound tourists of about 3 million per month before Covid-19. Bulk of these tourists have come from China pre-pandemic. Visitor arrivals in Japan started to recover in 2022 as most countries eased pandemic restrictions, but Chinese tourists have still been missing. The below chart shows that only 3% of 2019 Chinese tourists have returned to Japan in 2023.

Source: Japan Tourism Statistics, Saxo

Airlines are now steadily increasing their routes between China and Japan to meet rising demand. Weaker yen should further boost interest in travelling to Japan from China group tourists. Airline stocks, travel operators and leisure facilities could be benefitted with the rising inbound Chinese tourists, especially during the upcoming Golden Week holiday from October 1 to 6. The per-capita spending on shopping from China tourists surpassed 100,000 yen in 2019, suggesting Japanese retail and consumer stocks could also get a boost with the return of Chinese tourists.

Saxo’s APAC Tourism and Luxury Goods theme baskets stand to benefit from the revival in travel demand in China. We also collated a list of largest tourism and retail stocks in Japan below, for consideration purposes only. The list includes Uniqlo-owner Fast retailing and Disneyland-operator Oriental Land. Airlines like ANA and Japan Airlines, railroad companies like Central Japan Railway and East Japan Railway also make it to the list.

Source: Bloomberg, Saxo

It must be noted, however, that confidence levels of the Chinese consumer are weak given the property sector debacle. This has meant a significant shift in spending habits, and could mean that the number of outbound Chinese tourists could remain significantly smaller than the pre-pandemic levels. Lack of staff will also continue to limit the daily flights connecting Japan and China, keeping airfares higher. A pivot from Bank of Japan, or an impending recession, could also strengthen the yen and weigh on tourist spending.

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