The impact of the COVID-19 pandemic on business performance in the Japanese leisure industry

This study examines how the COVID-19 pandemic was associated with business performance in four Japanese leisure industries: golf courses, golf driving ranges, bowling alleys, and amusement and theme parks. Because many leisure activities require on-site participation and interpersonal interaction, mobility restrictions and voluntary behavioural restraint during the pandemic substantially disrupted business operations. Combining monthly establishment-level panel data from January 2019 to December 2021 with geocoded establishment locations, high-resolution human mobility data and prefecture-level data on newly confirmed COVID-19 cases, we estimate the relationship between local human mobility and establishment performance before and during the pandemic and use counterfactual simulations to distinguish a behavioural-change component associated with structural shifts in the mobility–performance relationship from an infection-related component associated with newly confirmed cases. The results show that behavioural changes in outing patterns were an important factor in the deterioration of business performance, but the relative importance of the behavioural-change and infection-related components varied substantially across leisure industries and outcomes. Behavioural changes were the dominant component for golf courses and amusement and theme parks, whereas golf driving ranges and bowling alleys exhibited a more outcome-specific balance between the two components. These findings indicate that the economic consequences of pandemic-related behavioural changes depended on activity-specific characteristics, including the indoor or outdoor setting, travel distance, local accessibility, the degree of interpersonal exposure and the distinction between core and ancillary consumption within establishments.