(Bloomberg) -- Tourists in Japan will pay more for rail passes after the JR train network raised prices for the first time in four decades, by an average of 70%. But even with the big increase, demand is likely to stay strong thanks to a cheaper yen and flow of inbound visitors.
From the start of this month, a rail pass offering 14 days of unlimited travel across Japan costs ¥80,000 ($534), up from ¥47,250. There are also options for one- and three-week passes, as well as first class. The price hikes vary from about 65% to 77%.
The JR group of six train operators contends that previous fares were set when there were fewer bullet-train destinations and that higher prices are justified with services extending into the northern regions. The JR network covers more than 19,000 kilometers (11,800 miles) across the archipelago.
“We never raised the prices other than making slight adjustments during consumer-tax hikes,” said Koki Mizuno, a spokesman at Central Japan Railway Co. System upgrades made over the years, such as introducing online seat reservations and the ability to use automatic ticket gates, hadn’t been reflected in pass prices, he added.
Travelers now have the option to pay an extra fee to ride the Nozomi and Mizuho, the fastest shinkansen bullet-train services, instead of being limited to the slower ones making more stops. Residents of Japan aren’t allowed to purchase the passes, which can be used for express trains, local lines and even some ferries.
“Its a screaming deal,” said Rachel Wright, who visited from San Francisco with her husband to celebrate his 30th birthday. They went to Kyoto, Osaka, Hiroshima, Gifu and Kanazawa prefectures, as well as Hakone — a hot spring area close to Mt. Fuji — over 16 days, using a 21-day pass. They bought the tickets before the fare increase, and said they’d still consider purchasing the newly priced passes.
“Even if you don’t save money, its very convenient because you just slide in and go anywhere,” she said. Before, a round trip on the bullet train from Tokyo to Osaka cost roughly the same as a week-long pass.
The price increase may have an impact on other travel options, according to Bloomberg Intelligence analyst Denise Wong. Some visitors may shift to low-cost carriers, including Jetstar and All Nippon Airways Co.’s Peach, for long-distance intercity travel, Wong said, given that airfares can cost 10% to 70% less than regular train tickets.
Travelers such as Kylie Hone, an Australian visiting with her family of five, may fit that criteria. Hone, who toured Tokyo, Osaka, Hiroshima and Kyoto on a recent trip, said she would rather buy individual tickets because it wouldn’t make sense to buy passes at the new, higher price. “It was our last time to buy the passes,” Hone said.
Yet, Wong said that “trains could maintain a strong edge over airlines for short- to medium-distance trips, where traveling by air is less efficient due to airport access and dwell time, and with modest dollar cost savings.”
Asked whether there were any concerns of losing customers due to the hike, JR Central’s Mizuno said: “It continues to be a good deal.”
©2023 Bloomberg L.P.