Japanese residents angered as new 'tourist tax' doesn't just apply to foreigners

Atami City’s new “tourist tax” has caused anger amongst residents of Japan, as the tax doesn’t distinguish between native or foreign tourists.

Many areas of Japan are introducing steps to combat perceived overtourism, including tiered pricing for foreign tourists, and Kyoto announcing plans to increase their accommodation tax, however most do not require residents of Japan to pay any “tourist tax”.

Accommodation taxes in areas like Kyoto are set to rise in a bid to encourage tourists away from the city

But what is Atami’s new “tourist tax”, and why aren’t Japanese residents excluded from paying it? Let’s take a look at the new measure in more detail…

On the 1st of April, the city of Atami, located in Shizuoka Prefecture, a region renowned as one of Japan’s leading hot spring resort destinations, implemented an accommodation tax for the first time within the prefecture.

Atami City is known as an onsen town, but it’s also a popular summer destination for many Japanese

This tax will be levied at a rate of 200 yen (approx. $1.35 USD/£1.04 GBP) per person per night, collected through the city’s approximately 380 accommodation businesses.

By implementing the tax, it is projected to generate additional revenue amounting to 565 million yen during the current fiscal year.

The revenue generated from this tax will be allocated towards tourism promotion initiatives and the operational expenses of the Atami Tourism Bureau.

The Bureau is a ‘tourism region development corporation’ (DMO) that functions as the central coordinating entity for tourism promotion through a collaborative public-private alliance, with the overarching objective of establishing Atami as a highly favored tourist destination for both domestic and international visitors.

Nakamise-dori is one of the most popular shopping streets in Atami City

The accommodation tax is categorized as a non-statutory tax, which allows local governments to establish such taxes through ordinances. Accommodation businesses are legally obligated to remit the collected tax to the respective local government.

To date, eleven local governments across Japan have introduced accommodation taxes, and Atami City distinguishes itself by utilizing the tax revenue as a funding source for its DMO.

Given the diminishing tax revenues resulting from a declining population, the city aims to secure a stable revenue stream for its tourism policies.

The city has been proactive in disseminating information about the accommodation tax to tourists through the placement of posters and pamphlets in accommodation facilities over the past six months.

The tax is applied from the first night of stay, and on the day of its implementation, at the Tsuki no Sumika Atami Juraku Hotel located in Tawaramoto-cho, the hotel staff provided explanations regarding the accommodation tax to guests during the check-in process.

Hotels, such as the Tsuki no Sumika Atami Juraku Hotel, will now have to charge guests the accommodation tax

A female university student, aged 19, from Tokyo, who was visiting with a friend, commented:

“We were provided with an explanation regarding the intended use of the tax, and therefore, the 200 yen does not feel like a burden. I would like it to be utilized for the development of cooling-off areas during the summer season or for the implementation of bus services that facilitate easier transportation from the train station.”

Kanekiyo Morita, the hotel’s president and chairman of the Atami Onsen Hotel and Ryokan Association, stated:

“A three-year preparation period was undertaken, and therefore, I anticipate that there will be minimal disruption on-site.”

Kazuyoshi Ueda, aged 59, the CEO (executive managing director) of the Atami Tourism Bureau, which commenced operations on the first day of the new fiscal year, held a press conference and expressed his enthusiasm, stating:

“We aim to surpass the 3.06 million overnight guests recorded last year and to increase tourist spending as well.”

The Atami Tourism Bureau will focus on investments in tourism promotion and the formulation of strategic plans. Ueda, who was seconded to the prefectural tourism association from the major travel agency JTB until March, was selected as CEO through a public recruitment process.

Regarding the accommodation tax, he stated, “We intend to ensure transparency in the utilization of the funds and to secure the understanding of guests and local residents.”

The tax has however not gone down well with Japanese residents, many of whom expect such taxes to only be levied against foreign tourists.

Many native Japanese flock to the area to enjoy summer activities at popular destinations such as ‘Atami Sun Beach’

In response to the news that the tax will be charged to any tourist staying at accommodation in Atami, there have been a series of critical voices on social media, with comments including “How much tax do they have to collect before they are satisfied?” and “Why don’t they just take it from foreigners?”.

The reason for the tax being charged to all travelers staying overnight in Atami is perhaps more simple, as foreign tourists only account for 1% of the city’s 2.97 million yearly overnight stays.

Foreign visitors to Atami are particularly attracted to Atami Castle, which offers panoramic views of the Sagami Bay

Were the city to charge the accommodation tax to only foreign tourists, the amount of revenue gained would be minimal in comparison to the 565 million yen expected over the next financial year.

The discontent around the tax does highlight the issues that local authorities face in terms of raising sufficient funds to preserve infrastructure around towns and cities in the face of rising tourism, whilst also maintaining a good public image to attract potential visitors.

Source: Yomiuri Shimbun