Delegates to NAJ’s recent RTO Summit West in Marina del Rey, Calif. who have worked the Japanese market at any point during the past two decades are either familiar with, or have been told about, the halcyon days of the 1990s when Japan was the number one overseas source market for inbound tourism to the USA. There were several years in which the market generated more than 5 million visitors to the United States—it peaked at 5.368 million in 1997—with that level last reached in 2000. The market has aged to the point that the peak travel ready population is not being replaced because of the nation’s shrinking birth rate. And most recently—for the past couple of years—the slumping market has been hit by government economic recovery policies that have resulted in a 40 percent decline of the yen against the dollar.
Against this backdrop, an expert panel addressed the question: “Will this Market Ever Bounce Back?” Panelists included: Ko Ueno (moderator), executive director, Japanese Tour Operators Association, who moderated the session; Ryoko Baba, manager of groups Kintetsu International; Shinsuke Takahashi, manager, West Coast Tour planning division, West Coast Hotel, reservation division, H.I.S. International Tours (NY) Inc.; and Katsuhisa Seki, general manager, JTB USA.
The Long Slide: Arrivals from Japan to USA
2000-2014
| Year | Arrivals (millions) | Change, Year-over-Year (%)* |
|---|---|---|
| 2014† | 3,618 | -3% |
| 2013 | 3,730 | 1% |
| 2012 | 3,698 | 14% |
| 2011 | 3,250 | -4% |
| 2010 | 3,386 | 16% |
| 2009 | 2,918 | -10% |
| 2008 | 3,250 | -8% |
| 2007 | 3,551 | -4% |
| 2006 | 3,673 | -5% |
| 2005 | 3,884 | 4% |
| 2004 | 3,748 | 18% |
| 2003 | 3,170 | -3% |
| 2002 | 3,267 | -11% |
| 2001 | 4,082 | -19% |
| 2000 | 5,061 | 5% |
* Total Decline, 2000-2014: -28.5%
† Forecast
Source: U.S. Department of Commerce, International Trade Administration, National Travel and Tourism Office
Ko Ueno, the moderator, needs no special effects. Though he turns 80 in August, he captivated delegates with his high energy level—he is an avid skier and golfer who likes karaoke—and made the simplest factoid come across like an exciting find, even if the news was less than upbeat. He quickly ran through the following, which could be characterized as good news (+) or challenging news (-).
(-) In 2013, outbound traffic from Japan to the USA was down every month except May
(+) However, inbound travel to Japan record breaking growth because of the weak yen
(-) From 2013 to 2015, the yen dropped 49 percent against the U.S. dollar
(+) Most Japanese have several weeks of vacation for their travel
(-) Japanese have a language problem when visiting other countries.
(-) Japanese tend to fly Japanese airlines, eat Japanese food, use Japanese products
(-) Oil surcharges automatically imposed on the price of airline tickets by Japanese carriers are major problem.
(-) In Japan, consumer protection regulations for the travel industry are very strict–travel companies -have to put up a large bond to protect the customer.
(+ and -) Four out of five (80 percent) of all travel agency sales are made by the top 10 companies.
(-) With the yen down against the dollar, how does one increase the number of customers? Target the senior market; 25 percent of the Japanese market is comprised of seniors (60-plus). Target the retirees in this market.
Ryoko Baba, explained to delegates that Kintetsu’s strength in U.S. product lies in group tours, packages that include key cities (such as Las Vegas) and series tours to established attractions, especially U.S. national parks. A fair portion of Japanese group travel is actually business travel, as profitable Japanese companies will pay for these trips.
Shinsuke Takahashi of H.I.S. spoke of the challenges confronting travel sellers in Japan, pointing to the many requirements confronting them such as one requiring that air passengers stay at least three nights at a destination.
Japanese consumers are not as flexible as those from China, he said, noting that the lack of flexibility is a problem. ”Hopefully, things will get more flexible,” he observed, while pointing out that, despite the fact that Japan is a long-established source market for the U.S., the language barrier is still a problem.
Currently, the U.S. West Coast remains a favored region for Japanese overseas travelers, and H.I.S. is constantly changing and updating its brochures with new deals for its customers.
Katsuhisa Seki gave delegates a quick run through of the four major product lines of JTB, Japan’s largest travel company: Look JTB
- Tabi Monogatari by JTB Media Retailing
- Royal Road by Royal Road Ginza, with tours designed for high-end customers only
- JTB Grand Tour, a niche market product that includes packages to the North Pole, South Pole and Africa.
And while it could not be described as a tone of optimism, Seki told delegates that American packages are still very popular among the Japanese
