14.76 Million Visitors, Yet Half of Coupons Remain Unsold

In 2023, Hiroshima City welcomed 14.76 million tourists, an increase of 420,000 from the previous year, setting a new record. The heightened international interest ahead of the 80th anniversary of the atomic bombing, the increased recognition following the G7 Hiroshima Summit, and the depreciation of the yen—these multiple tailwinds have combined to create an unprecedented influx of visitors to the city.

The number of hotel rooms has reached 18,598, and it is expected to exceed 20,000 by the fiscal year 2028. With a succession of new openings, including foreign-owned hotels, the accommodation infrastructure has entered a phase where “supply is chasing demand.”

However, during the same period, the premium coupons issued by Hiroshima City saw applications reach only about half of the available quota. This system, designed to stimulate local consumption, remains underutilized and has not reached the residents.

In a city that welcomed 14.76 million visitors, the fact that half of the coupons remain unsold is not just a coincidence. It quietly but accurately illustrates the fault lines running through Hiroshima’s economy.

The Map of “Money Coming from Outside”

The economic effects of the increase in tourists have primarily concentrated in the city center.

In March 2025, Hiroshima Electric Railway’s streetcars began servicing a new station building connected to the south exit of Hiroshima Station. This direct access has significantly changed the flow of movement around Hiroshima Station. According to the city’s announcement, consumption in the city center has increased compared to the same month last year since the new service began. The connection of a transportation infrastructure with over a century of history to a new commercial hub has physically rewritten the pathways for tourists.

Average daily room rates (ADR) have also been on the rise. With the recovery of inbound demand, the average room rate in Hiroshima City continues to trend upward. Occupancy rates remain high, creating a rare favorable environment for hotel operators where both “volume” and “price” are increasing.

However, this map of benefits shows clear disparities. The increase in consumption is particularly notable around Hiroshima Station, the Kamiyacho and Hatchobori areas, and along the route to Miyajimaguchi. While the economic effects expand linearly along the paths tourists walk, suburban shopping streets and residential areas outside this line hardly feel the impact of the 14.76 million visitors.

Money coming from outside only falls where the feet of visitors tread. While this is obvious, this obviousness creates structural biases.

“Money Circulating Inside” is Stagnant

The leftover premium coupons cannot simply be dismissed as a failure of a promotional strategy.

Hiroshima City’s premium coupons are designed to include a premium of about 20-30% over their face value, which should provide a clear “benefit” for households. However, several factors have contributed to the low application rates.

First, the complexity of the application process. Residents have repeatedly voiced that it is “too cumbersome.” This “cumbersome” is not an expression of laziness. For the elderly, who may be unfamiliar with online applications, the hurdles include verifying participating stores and managing expiration dates—these small frictions accumulate, creating a state where “even if they know it’s a good deal, they don’t reach for it.” There is a disconnect between the intended recipients of the system and the literacy the system assumes.

Next, there is the fundamental issue of consumer mindset. Amid ongoing price increases, the real disposable income of working households in Hiroshima City has stagnated. Rising prices for food and energy are straining household budgets, leading to the reality that it’s not just a matter of “having money but not spending it”; rather, it’s that “the margin for spending is shrinking.” While the premium portion of the coupons can indeed help households, for those already struggling to find the initial outlay, the benefits of the premium are less accessible.

Additionally, the skew in the stores where the coupons can be used cannot be overlooked. If large commercial facilities and chain stores dominate the list of participating stores, the circulation of consumption is more likely to follow a structure of “going out of the region” rather than “circulating within the region.” If the system is difficult for local individual shops and small businesses to participate in, a twist occurs between the original goal of “revitalizing the local economy” and the actual implementation.

Behind residents’ expressions of “cumbersome” lies a quiet resignation—more than a distrust of the system, it reflects a sense that the system is not designed for them.

The Nature of the Fault Line—Systems That Reach and Those That Don’t

The disconnect between “money coming from outside” and “money circulating inside” is not unique to Hiroshima. Many regional cities with thriving tourism industries face similar structural challenges. However, in the case of Hiroshima, the contrast is particularly stark in the numbers.

The figure of 14.76 million tourists and the fact that half of the coupons remain unsold—when these two numbers are juxtaposed, the differences in the design philosophies of “systems that reach” and “systems that don’t reach” become apparent.

The development of tourism infrastructure—hotel construction, streetcar access to station buildings, multilingual support—has been designed with the behavior of “visitors” in mind, following their pathways. The criteria for investment decisions are clear, with risks and returns calculated based on demand forecasts. Private capital leads the way, and market principles refine the system.

On the other hand, domestic demand stimulation measures represented by premium coupons tend to be designed to target the entire population of “residents,” yet in practice, they often only reach specific segments. In an effort to ensure fairness, government-led initiatives can result in systems that are “somewhat inconvenient” for everyone. The fact that the intended recipients do not receive the benefits, yet the system can still claim to have been “implemented,” remains.

This asymmetry is not a matter of intent but a structural issue. While the tourism industry’s systems are designed starting from the behavior of “visitors,” domestic demand stimulation measures are often designed without sufficiently observing the behavior of “residents.”

Reframing the Question—”Who Does This System Benefit?”

When discussing Hiroshima City’s economy, the question of “how to balance tourism and daily life” is often repeated. However, it may be necessary to slightly change the way this question is framed.

The term balance presupposes a state of equilibrium between two forces. However, in reality, the tourism economy and the daily economy do not sit on the same scale. The scale of money flow, the subjects of decision-making, and the time frames are all different. The metaphor of a scale itself can obscure the structure of the problem.

Rather, the question should be, “Who does this system benefit?”

The streetcar access to the station building has made it easier for tourists to access the area. At the same time, it has also made transfers easier for residents who use the streetcars for commuting and schooling. This initiative has been effective because it was invested in a location where the pathways of “visitors” and “residents” overlap.

The reason the premium coupons did not reach residents is likely because they were designed without sufficiently observing the daily pathways of “residents”—their shopping habits, information acquisition, and household budgeting. The goodwill of the system is not in question. However, goodwill that does not reach its intended recipients erodes trust by the amount it fails to reach.

Numbers to Watch Going Forward

There are several indicators to pay attention to when reading Hiroshima City’s economy in the future.

One is the “leakage rate” of tourist spending. Of the money spent by tourists in Hiroshima City, how much remains as income for local businesses, and how much flows out to external headquarters or suppliers? As the number of hotel chains and national chain restaurants increases, a gap emerges between sales figures and the money that remains in the region.

Another is the trend in the consumption gap between the city center and the suburbs. Will the effects of the streetcar access remain concentrated in the city center, or will they also extend to surrounding areas? Changes in this disparity will serve as a measure of the reach of the “systems that reach.”

Finally, how the next round of premium coupons—or alternative measures—will be designed is crucial. Simplifying the application process, expanding the list of participating stores, and focusing on targeted households. Whether the administration listens to residents’ complaints of “cumbersome” or reflects them in the design will change the temperature of trust between the administration and residents.

Filling the Fault Line Probably Doesn’t Require Major Policies

In a city that welcomed 14.76 million visitors, the fact that half of the coupons remain unsold does not mean that Hiroshima’s economy is broken. The strength of external demand itself is proof of the city’s vitality.

However, the stronger the momentum of money coming from outside, the more pronounced the weakness of money circulating inside becomes. If this fault line is left unaddressed, the city that thrives on tourism and the city where life does not improve will continue to coexist at the same address.

Filling the fault line probably does not require major policies. Just as the streetcars have connected to the station building, it is about designing small points of intersection where the pathways of “visitors” and “residents” overlap, one by one. Making the application for coupons a bit easier. Ensuring that local shops naturally line the streets tourists walk. It is the accumulation of such modest arrangements that will gradually narrow the width of the fault line.

Hiroshima’s streetcars have been running in this city for over a century. While they may not be flashy, they move along the same tracks every day for the benefit of the residents. A city where both visitors from outside and residents can ride the same streetcar—within that system, there is likely a tangible sense of the answer.