More than 100,000 tourists from the city took group tours to Japan last year. In total, 736,391 tourists went abroad or to Hong Kong, Macau and Taiwan for vacations in 2008 from Shanghai, up about 6.8 percent from the year before.
Thailand ranked second in popularity, welcoming about 96,100 group tourists from the city, followed by Singapore, Malaysia and Australia.
Reduced prices also increased Japan's popularity. Many tours now cost between 5,000 yuan (731 U.S. dollars) and 6,000 yuan, about 40 percent less than when the tours were first offered.
Xu Fan, a member of the Panel of Tourism Experts of the United Nations' World Tourism Organization, said Japan-tours had matured in recent years, making more tourists return to Japan twice or even three times to experience different aspects of the country. In contrast, tourism in Southeast Asia had been affected by many negative factors, such as the turbulent political situation in Thailand.
Although the global economic downturn affected the whole market from September, Japan benefited from the anti-government protests in Thailand which disrupted tourism there for a while.
A popular Chinese movie "If You Are the One" also led to many fans taking trips to Hokkaido to see where it was filmed.
Last year the tourist volume to Europe was down about 30 percent from 2007.
The report said the number of tourists visiting Europe declined last year, although France and Italy were the ninth and 10th most popular destinations.
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