Japanese businesses weigh dual pricing and local discounts amid rising foreign visitor numbers

With the yen continuing to weaken and a boom in inbound tourists, businesses in Japan are thinking about implementing a dual pricing system for foreign tourists and locals.

In Japan's northernmost prefecture, which is well-known for its breathtaking landscapes and winter resorts, the director of the Hokkaido Tourism Organisation has urged businesses to set lower prices for locals.

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According to the Yomiuri Shimbun newspaper, the organisation is pushing for a trial run of two-tier discounts this autumn. According to the head of one Hokkaido hotel operator, discounts are required to ensure that Japanese tourists do not leave internationally popular resorts like Niseko.

In June, the mayor of Himeji, located in western Japan, announced plans to more than quadruple entrance fees for foreign tourists at Himeji Castle, a UNESCO World Heritage site with sections dating back to the 17th century.

Currently, adults pay 1,000 yen ($6.44) to enter, but Mayor Hideyasu Kiyomoto is considering increasing the fee to approximately $30 for foreign tourists while keeping it at $5 for Japan's citizens.

Kiyomoto mentioned the potential damage to the castle due to the high number of visitors. In the 2023 financial year, the castle welcomed 1.48 million visitors, including 452,300 from overseas.

In the first half of this year, 17.78 million tourists visited Japan, setting a new record. According to the Nikkei newspaper, foreign visitors spending has quadrupled over the last 10years and is currently Japan's second-largest "export" category, after automobiles.

Osaka Prefecture has proposed charging foreign visitors a fee to address over-tourism, but this idea has met resistance, particularly with the 2025 Osaka World Exposition approaching.

While discounts for students and seniors, as well as tiered pricing for locals, have been common in municipal-supported facilities like hot springs, extending this concept to foreign tourists is still uncommon and controversial.

In a survey conducted by Loyalty Marketing, which manages a shopping points card, over 60% of the 1,200 respondents supported having different prices for foreign tourists.

One business has already adopted this two-tier pricing system. Tamatebako, a seafood restaurant in Tokyo that opened in April, charges foreign tourists 7,678 yen ($49.30) for a weekday all-you-can-eat and drink buffet, while the price for Japanese residents is 6,578 yen ($42.24).

Some shop owners argue that the additional costs of providing special English assistance to foreign tourists justify the higher prices.

(With inputs from agencies)