The Japanese government's rollout of a new travel subsidy program aimed at boosting domestic tourism has hit a snag, with some travel-related firms having already spent the allocated funds.
The Japan Tourism Agency is asking participating businesses across the country to review their budgets while also considering increasing funding for the scheme, dubbed the "National Travel Discount."
Launched on Tuesday, the same day COVID-19 border controls were eased for international arrivals, the program provides the equivalent of up to 11,000 yen ($77) in discounts and coupons per traveler per day. The money can be used for meals, shopping and accommodation expenses.
The scheme is being implemented through use of state funds, including 560 billion yen left over from its "Go To Travel" predecessor, and 330 billion yen from similar existing programs operating at the prefectural level.
Budgets have been allocated to all 47 of Japan's prefectures, with the amount each receives based on criteria such as local accommodation figures. The prefectural governments then redistribute the funds between local businesses such as travel agencies and hotels to sell their products and services within the scope of the scheme.
Authorities of northeastern Yamagata Prefecture had planned to use the funds they were granted over three months from October through December, but have since decided to divert some of their November budget to this month after local businesses spent all of the government's initial allocated subsidy.
"In some cases, too much funding has been given to local businesses, while estimates for others have fallen short," one government source said, requesting that prefectures redistribute their quota based on past tourism data.
Meanwhile, high consumer interest in the scheme has overwhelmed some participating travel agencies.
Seanuts Co., which manages accommodation bookings for around 5,100 hotels and other facilities, said that high traffic caused by a large number of hits to its website led to a system malfunction, leaving customers unable to book, while also possibly canceling existing reservations.
The outage has persisted since Tuesday morning when the National Travel Discount was launched, but as of Friday, it is still unknown when it will be resolved, according to Seanuts.
"If sales are strong, the number of businesses that suspend participation in the scheme could increase further," one local government official said, adding that it could be the case regardless of whether quotas were reviewed.
While the tourism agency has indicated it will continue funding for the scheme until late December, Chief Cabinet Secretary Hirokazu Matsuno told a press conference Wednesday that the government would "make appropriate additional allocations as necessary."
The new program was initially planned to be introduced in July but was postponed due to the nation's seventh wave of coronavirus infections.
A total of 87.81 million people took advantage of the Go To Travel program from July 22, 2020, until it ended on Dec. 28, 2020, due to a large increase in COVID-19 cases.
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