Japanese restaurants and tourist sites are about to raise their prices for foreign visitors to support the weakening yen. Photo / Getty Images
Japanese restaurants and tourist sites are about to raise their prices for foreign visitors to support the weakening yen. Photo / Getty Images
Why are some Japanese restaurants and tourist sites charging visitors to Japan more money than locals for the same goods or services?
Tourists and fans of Japanese art, culture, and technology are all heading to Japan this year to take advantage of the weak local currency, the yen.
The plunge started in April and caused the yen to reach its weakest since 1990 (160 against the US dollar). This makes Japanese exports cheaper and more attractive but simultaneously drives up the cost of imports.
The weakened currency, along with an influx of post-Covid travel, has attracted more and more tourists to visit Japan, and because the yen is weak, for a much cheaper price, too. However, this leads to higher prices for everyday goods and increased living costs for locals.
Because of this, Japanese businesses and tourism sites are trying to implement a new strategy to take advantage of the surge of tourists, regain income, and combat over-tourism.
The new system, popularly known online as the “Gaijin tax”, is a two-tiered pricing system at tourist spots such as restaurants and popular tourism sites.
Gaijin tax is an unofficial surcharge in price, mostly in restaurants where they have two menus, one for locals and one for tourists. It highlights the Japanese word, “Gaijin,” which means “foreigner” or “non-Japanese.” This strategy is used so that businesses can charge tourists more money for their goods or services than they charge locals.
The Gaijin tax is more commonly seen in touristy spots, such as bustling cities, tourist sites and places that are trending. While not all restaurants engage in this practice, it has become widespread enough to attract significant attention and a little controversy.
Most of the controversy comes from a sentiment of discrimination, with tourists voicing their complaints of being treated differently and unfairly in comparison with Japanese citizens.
However, Japanese restaurants and tourism sites are defending the higher prices, justifying its purpose for the locals.
Japanese restaurant owners shared that the upcharge for foreigners is needed to hire English-speaking waiters and staff to assist them. Photo / 123rf
Shogo Yonemitsu, who runs Tamatebako, an all-you-can-eat seafood grill in Shibuya, shared with CNN how they impose the Gaijin tax in their shop not by adding a surcharge, but by giving the locals a discount. “We need (this pricing system) for cost reasons.”
Yonemitsu explained the need for a price hike for tourists because the restaurant needed to hire English-speaking staff to accommodate foreign customers.
“Given that we have 100 to 150 customers a day while the restaurant has a 35-seat capacity, every second is like a war. No matter how we do it, it takes more time to attend to a foreign customer such as to explain how the buffet works, how to grill and eat the food, all in English,” Yonemitsu shared with Japan Today.
He also emphasised that raising the price for all customers, tourists and locals alike, would not be ideal.
“I think imposing the extra costs created by foreign tourists on to locals would be unfair,” Yonemitsu said. “People say it’s discrimination, but it is really hard for us to serve foreigners, and it is beyond our capacity.”
Tourist sites such as the Unesco World Heritage site Himeji Castle, are also looking at implementing this strategy to combat the increase in tourists.
The mayor of Himeji recently said the western Japan city is contemplating charging foreign visitors quadruple the price for entry fees. He said the city is considering charging around $30 for foreigners, which is a big increase from the locals’ fee, around $5.
Himeji Castle, a popular tourist attraction in western Japan, is considering implementing the same two-tiered pricing system. Photo / 123rf
The practice of charging foreigners more has sparked a heated debate online.
Defenders of the Gaijin tax claim that it helps compensate for the additional costs associated with catering to tourists, such as providing multilingual menus and dealing with increased wear and tear on facilities. Online users also pointed out that the two-tiered system is implemented in other countries such as Thailand and the Philippines.
A user on Reddit said, “I’ve been to maybe 30 countries. Getting charged more because I’m a white guy in a country of non-white guys is par for the course. Try getting a cab in Mumbai without getting charged like 500% more than a local. Go to a street market anywhere in Southeast Asia and try to get local prices … good luck. I’m not defending Japan here, rather saying it’s far from only Japan.”
However, critics argue that it is discriminatory and tarnishes Japan’s reputation as a hospitable and fair destination. Many foreigners who have moved to Japan, are fluent in the language and have been living there for years shared that they are not exempted from the “Gaijin” treatment.
Others questioned if Japan needs the Gaijin tax, given that, in comparison to other countries that implement the same two-tiered system, such as Southeast Asian countries, Japan has more capacity as a first-world country to support its citizens.
One user shared, “Feels weird when it’s a “first world” country. Totally understandable in India for example. I would feel bad paying local prices.”
The Japanese government has acknowledged the controversy and is reportedly considering measures to address it. However, various tourism organisations and consumer rights groups have started campaigns to promote fair pricing practices and transparency.
