Background Information
The “Go To Travel” campaign was launched by the Japanese government on July 22, 2020, as part of a broader initiative to stimulate the economy in the wake of the COVID-19 pandemic. The campaign aimed to support the domestic travel industry, which had been severely affected by the pandemic, by offering significant discounts and subsidies to encourage residents of Japan to travel within the country. This policy was part of the larger “Go To” campaign series, which also included initiatives like “Go To Eat” to support dining establishments.
Economic Theory Behind the Policy and Intended Impact
The economic theory behind the Go To Travel campaign is rooted in Keynesian economics, which advocates for increased government spending to stimulate demand during economic downturns. The primary components of the campaign included:
Subsidies and Discounts: The campaign covered 50% of travel expenses, with up to 35% off accommodation and transportation costs and an additional 15% provided in the form of coupons for use at local businesses. The maximum subsidy was ¥20,000 per person per night for overnight trips and ¥10,000 for day trips.
Boosting Domestic Tourism: With international tourism effectively halted, the campaign aimed to boost domestic tourism, providing immediate relief to the travel and hospitality sectors.
Economic Support for Local Businesses: The coupons provided as part of the campaign could be used at participating restaurants, shops, and other local businesses, thus spreading the economic benefits across various sectors.
Intended Impact: The campaign sought to revive the domestic tourism industry, preserve jobs, and stimulate local economies by encouraging spending in areas heavily dependent on tourism. By providing financial incentives, the government hoped to mitigate the economic downturn and support a quicker recovery.
Unintended Consequences and Evaluations of Effectiveness
While the Go To Travel campaign provided significant economic support, it also faced several challenges and unintended consequences:
Health Concerns: The campaign was controversial due to concerns about increasing COVID-19 infections. Critics argued that encouraging travel during a pandemic could exacerbate the spread of the virus. Indeed, there were instances where the campaign was temporarily suspended due to spikes in COVID-19 cases.
Economic Disparities: The benefits of the campaign were not evenly distributed. While it provided substantial support to popular tourist destinations, some less-visited areas saw limited economic impact.
Administrative Challenges: Implementing the campaign and ensuring compliance with health guidelines presented logistical challenges. There were also issues with the distribution and usage of coupons.
Evaluations of Effectiveness: Despite these challenges, the Go To Travel campaign succeeded in boosting domestic travel and supporting the tourism sector. By offering substantial discounts and subsidies, the campaign helped sustain businesses and jobs in the hospitality industry. However, the balance between economic support and public health remained a contentious issue throughout the campaign’s duration.
In conclusion, Japan’s Go To Travel campaign was a significant effort to stimulate the economy by promoting domestic tourism during the COVID-19 pandemic. While it provided much-needed economic support, it also faced criticism and challenges related to health risks and implementation.