Recently Chinese-owned businesses within Japan, particularly in the fields of hospitality and restaurants, have been hit particularly hard. The recent downturn comes in the wake of a travel warning issued by Beijing. Just last month, an official government advisory was posted telling Chinese tourists to avoid visiting Japan. The recommendation is made at a time of increased tension between the two countries. This recent counter development has dealt a blow to that “one dragon” system. This informal system further links Chinese businesses in areas that tend to attract compatriots who are visiting.
Unfortunately, the travel advisory is responsible for a sharp decrease in patronage for these businesses. Owners of Chinese restaurants in tourist hotspots such as the Ameyoko shopping district in Tokyo are already being affected. They’re reporting that business has dried up completely ever since the warning was issued. At the same time, they’re inextricably linked to and rely on Chinese tourists for their economic lifeline. Now, they’re finding it nearly impossible to pivot away from their abrupt loss of clientele.
Tensions between Beijing and Tokyo have deteriorated sharply in recent months, leading the Chinese government to adopt this warning shot. A reflection of broader geopolitical tensions, the travel warning has seen many Japanese business owners left feeling exposed. With each day that the advisory exists, businesses are put in an increasingly more difficult position. Concern over the risks of exacerbating diplomatic relations further complicates the challenges they face.
Ameyoko, or Ameya Yokocho, is a bustling market known for its cheap eats. Chinese restaurants over there are left with tables empty and foot traffic dwindling. As one restaurateur explained, “The customers just stopped coming… Chinese tourists were the main factor keeping us in business. Their reliance on this demographic further highlights the precariousness of their operations during shifts in political leadership.
The travel warning goes beyond just costing one amazing restaurant business. What’s worse is that it endangers the whole network of Chinese businesses that depend on cultural tourism for their survival. This “one dragon” system, which coordinates different businesses that serve Chinese visitors, is at a tipping point. Without their usual wave of tourists, however, these businesses have a long road ahead of them.
Further, the yellow advisory has spillover effects for other industries that depend on visitors’ dollar—a hospitality spending halo effect—such as retail and entertainment. As a result, Chinese nationals are reconsidering travel plans. At the same time, Japanese firms that traditionally profit from their trips have to scramble to replace that business.