Terrie's Take 677 -- Comparing Japanese & Swiss Tourism Efforts, ebiz news from Japan

Sun Sep 9 22:23:15 JST 2012

* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
(http://www.terrie.com)

General Edition Sunday, September 09, 2012, Issue No. 677

+++ INDEX

- What's New -- Comparing Japanese & Swiss Tourism Efforts
- News -- Single mother families hit hard
- Upcoming Events
- Corrections/Feedback
- Travel Picks -- Mt Koya in Wakayama & flowers in Fukuoka
- News Credits

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+++ WHAT'S NEW

In mid-August the government started putting out press
releases about the resurgence in inbound tourism to Japan
-- it's a good-news story. Over 845,000 foreigners came
here by sky and sea, the second highest number on record
after July 2010. The Japan Tourism Agency said a sharp
increase in Chinese travelers (more than 200,000 people, a
record) was the main contributing factor, along with other
nationalities taking family trips on newly available
discount airlines. Mostly the increased visitors came from
China, South Korea, and Taiwan, in that order. Visits from
Thailand, Indonesia, and Vietnam were also well up.

Actually, South Korean numbers were down because of the
Takeshima (Dokdo) islands spat, but the Chinese wave seemed
impervious to inter-governmental jousting over the Senkaku
(Diaoyutai/Diaoyu) islands to the west of Okinawa.

Why the resurgence in numbers? From what we've heard in the
industry, the Chinese numbers are due to hugely discounted
trips offered by Chinese travel agencies, as well as the
loosening of visa requirements. This seems to be borne out
by the fact that Chinese visitor numbers to Okinawa hit a
record 18,700, up 770% over July last year. They are most
likely coming in because with a visit to Okinawa, per
Japanese government regulations, they can then travel
relatively freely in the rest of Japan for the following 3
years. It will be interesting to see the statistics for
Fukushima when they come out, since they have a similar but
even more generous provision.

Also, it should be noted that while all eyes in the tourism
industry are on China, in fact the largest contributor to
tourism in Okinawa in July was Taiwan, with 23,200 visits.
The JTA thinks the 39% increase of Taiwanese over last year
is mainly due to the low-cost airlines starting to operate
into Japan and their effect on lowering air travel prices
in general. In our opinion, the Taiwanese are the most
reliable and possibly the most valuable repeat tourists to
Japan and despite the current fixation on mainland China
the Japanese government needs to make a concerted effort to
continue wooing them.

[Continued below...]

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[...Article continues]

The recovery this year highlights an important point, that
it is entirely within the Japanese government's power to
increase tourist numbers -- all they need to do is to
remove some of the out-of-date visit restrictions for
visitors from formerly third world countries. We were told
by a major inbound tour operator in Shinjuku that they have
had a huge surge in visitors from Thailand in the last few
months, thanks to easier visa requirements as well as a
well-timed tourism campaign. Given the high level of
interest in Japan and things Japanese by the populations of
S.E. Asia, we see further visa flexibility being used to
open the visitor "tap" even wider, although it is likely to
dilute the net worth and spending power of those wanting to
visit. Indeed, this is already happening with travelers from
China.

Now that there is so much travel interest in Japan again,
we wonder if the comments about it being too expensive as a
holiday destination really hold water? The government had
previously identified travel costs as being one of the
three big deterrents for candidate travelers and the main
reason why even Korea had higher absolute tourist numbers
(ironic given Japan's appealing scenic, commercial, and
cultural heritage). We started wondering how other
"expensive" destinations cope in drawing tourists and
discovered that Switzerland could be a possible model
for Japan's future tourism planning. In fact, we've heard
frequent references in the past on how Japan might become
the Switzerland of Asia economically, with a
post-industrial economy that punches above its weight. But
we've not heard it used in the context of tourism before.

Actually, the Swiss have a very similar number of inbound
tourists each year. In 2010, 8.6m people traveled to that
country, and in Japan the number was  8.3m. Much
like Japan, the sources of Switzerland's tourists are
nearby countries (Germany, UK, France) and the USA. For
both countries, proximity is a big drawing card so long as
you can offer something that the source countries cannot.
For the Germans, Switzerland has alpine beauty, great
skiing,banking services, and language familiarity. For
Japan you could throw in onsens, shopping, and the
ability to buy and bequeath land. Anyway, as a result
 there were 2.2m Germans traveling to Switzerland in
 2010, then 701,000 French (in second place).

With a population of just 8m people, and 8.6m tourists, it
is not hard to understand why tourism is so important to
the Swiss economy. In 2010, about Sfr14.9bn (JPY1.2trn), or
2.9% of the nation's GDP came from inbound tourist
spending, feeding about about 144,000 workers (3% of the
workforce). Japan estimates its inbound tourist spending at
JPY1.15trn for 2010, about the same, although of course
this is a much smaller fraction (0.22%) of its GDP. We
couldn't find stats on tourism-related workers for the
inbound segment only, but we imagine that since only 5% of
Japan's 63,000 hotels, ryokan, and other accommodation
providers accept foreigners, it is probably around 200,000
people. We make this assumption because in 2007 up to 6.9%
of the working population (about 4.2m people) were supposed
to be involved directly and indirectly with the tourism
industry as a whole.

Then there is the tourism budget of the two countries. In
Switzerland the government spends Sfr53m (JPY4.4bn) to
attract foreigners to its borders, and of this Sfr48m
(JPY4bn) goes to the inbound marketing arm Swiss Tourism.
Swiss Tourism also gets funds from the tourism industry and
has a total budget of around Sfr87m (JPY7.2bn). It appears
that almost all of this money goes into inbound marketing
and operations. Meanwhile in 2010 in Japan, the JTA's
budget for both inbound AND domestic tourism was JPY9.48bn,
some JPY1.9bn of which went to the JNTO. The JNTO then
received another JPY1.1bn from private industry. Our guess
is that after funding JNTO, the JTA might have 5% of its
funds left over for international marketing, meaning that
the total inbound market spend for Japan is probably around
JPY4bn.

What can we learn from this? That the Swiss spend about
double what the Japanese do on inbound marketing, thus
explaining why they are doing so well in promoting their
country abroad.

But money applied is not the whole story, there is also the
will of each tourist organization to, well, organize. From
what we can see of the Swiss, at least for the last 10
years they have focused on ensuring that all parts of the
tourism sector are working together to offer a uniformly
good product. Looking at their planning materials (made
public on the Internet) you can see that inter-governmental
and inter-industry dialog, collaboration, and oversight are
very high on their list of priorities.

The Japanese tourism effort in contrast seems to be
extremely fragmented and in serious need of oversight by a
properly funded organizing body. Of course this is what the
JTA is supposed to be, so maybe it's just a matter of time
before things improve. However, from our many discussions
with regional governments and local tourism bodies during
the course of this year, it seems that there is very little
effort being put into bringing Japan's far-flung tourism
interests together and to overcome bureaucratic fiefdoms.
For example, why is it that LCCs airlines aren't allowed
access to many regional airports around the country?
 When was the last time you saw an international tourism
promotion and tours to Miyazaki or other outlying
regions? And why are Japanese inn owners still allowed
to discriminate guests based on nationality?

If we look at Switzerland's tourism performance, "hobbled"
as it is by an expensive currency, then they must be a
good benchmark for Japanese inbound tourism. If by luck or
awareness Japan was to set its sights on performing at the
level that Switzerland does, especially given the proximity
of major feeder regions such as China, South Korea, and SE
Asia, then our expectation is that Japan should be able to
create at least 10 times more income from tourism spending
than it does now, and put 3-5 times more employees to work
in the sector. If it was to do this, on an income basis
alone, tourism would become bigger than agriculture as an
earnings engine for the country.

This would be a meaningful development and we're sure that
those 5,000 or so soon-to-be unemployed Sharp factory
workers would be more satisfied finding their next jobs
serving foreigners sake and sashimi than swatting
mosquitoes down in the rice paddies... :-)

***************

By the way, if you're in Healthcare and/or IT, you might
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Health Growth Opportunity Briefing on September 11th.
Details appear in the Upcoming Events section below, or you
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their knowledge accessible like this.

...The information janitors/

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+++ NEWS

- ING selling off Japanese insurance assets
- Moves to increase senior employment levels
- Sharp HQ building up as collateral
- Single mother families hit hard
- Goodman Group investing big in Japan

=> ING selling off Japanese insurance assets

As part of a recovery plan stemming from a government
bail-out after the Lehman shock, Dutch insurance firm ING
has decided to sell its Japanese insurance business to Hong
Kong's Pacific Century Group. The deal involves 770,000
insurance policy holders in Japan and the business will
reportedly sell for some tens of billions of yen. One
problem is that most of the ING policies are guaranteed
principle variable annuity contracts, and the company is
apparently considering offering customers refunds to reduce
their liabilities on the policies. (Source: TT commentary
from e.nikkei.com, Sep 8, 2012)

http://e.nikkei.com/e/ac/tnks/Nni20120907D0709F03.htm

=> Moves to increase senior employment levels

Although they may not be around much longer, the DPJ has
announced a policy committing to increase employment rates
for people aged between 60 and 64. Currently 57.3% of that
demographic is employed and the government wants to
increase this number to 63%. They have also said that they
wish to improve assistance offered to young people and
mothers with young children, so as be able to help them
find gainful employment, too. ***Ed: There is no sign of
the number of jobs in the economy expanding, so putting
nearly-retired people back into the workforce can only push
the unemployment down on to younger people who don't have
the same personal connections or experience. There really
isn't an easy answer on what to do with the surplus of
older workers and once the retirement age is increased to
70 (which we think it will be) the situation will only be
exacerbated further.** (Source: TT commentary from
e.nikkei.com, Sep 7, 2012)

http://e.nikkei.com/e/ac/tnks/Nni20120907D07JF353.htm

=> Sharp HQ building up as collateral

With the news this week that Japan's banks are going to act
with or without Hon Hai's investment, Sharp is now setting
to and providing necessary collateral for JPY150bn of extra
loans. First up for mortgage have been the company's Osaka
headquarters building and various factories that are not
already earmarked for sale. ***Ed: This is a pretty big
loss of face for Sharp and a sign of just how serious
things are in the company. Investors have already trashed
Sharp anyway, with shares once again down to around
JPY200.** (Source: TT commentary from omanobserver.om, Sep
07, 2012)

http://main.omanobserver.om/node/108719

=> Single mother families hit hard

The Welfare Ministry has released figures that show in
2010, single-mother families had average income of just
JPY2.91m, less than half that of families with both parents
present. Furthermore, 47.7% of those disadvantaged families
had savings of less than JPY500,000, meaning that they are
very vulnerable to sudden financial crises, such as kids
getting sick or parents needing hospitalization. Another
interesting statistic was that just 7.5% of the
single-mother households were that way because of death of
the husband. Rather, divorce was the major contributing
factor and yet only 37.7% of these families were receiving
payments from the absent father. ***Ed: The real problem
here is that the courts cut the father off from meaningful
contact with their children (enforced single-parent custody
and all that) and so the Dads feel little compunction to
pay family support. Nor is there effective enforcement
either. If the courts were experts in basic psychology,
instead of perpetuating their 19th century fantasies about
protecting the house name, then Japan's kids would be a lot
happier and healthier for it.** (Source: TT commentary from
japantimes.co.jp, Sep 9, 2012)

http://www.japantimes.co.jp/text/nn20120909a9.html

=> Goodman Group investing big in Japan

When they first arrived in Japan, Australian logistics
property fund, Goodman Group, said they would invest
JPY100bn here and they appear to be true to their word. The
company has announced a US$1bn fund partnering with the Abu
Dhabi Investment Council, to invest into the Japanese
logistics sector. Goodman already has 3 projects worth
about US$500m in Japan, and the Goodman Japan Core Fund
will accelerate its activities further. (Source: TT
commentary from theaustralian.com.au, Sep 8, 2012)

http://bit.ly/PSUc4g

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

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-----------------------------------------------------------

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***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors at terrie.com.

=> No comments this week.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

=> Mt. Koya, Wakayama
Japanese Spirituality at its Best

Hidden away on a mountain plateau that is surrounded by
densely forested 1,000 meter peaks, seemingly far away from
the hustle and bustle of Japan’s cities, lies Mt. Koya,
also called Koyasan. This is the place where Buddhist monk
Kukai, founder of the Shingon branch of Japanese Buddhism,
established a mountain monastery in early 800. Over
1,200 years later and Koyasan is still a thriving religious
center.

Located 2 hours by train from Osaka, it is one of Japan’s
Shangri-la locations and is not to be missed. Devotees of
Shingon Buddhism come on pilgrimages or for religious
training to any one of Koyasan’s over 100 temples or its
very own university. Koyasan is located within easy reach
of Osaka, and a visit to this mountain monastery can be
done as a day-trip. However, we highly recommend staying
overnight in one of the temple lodgings where you will
experience the monks’ warm hospitality.

http://japantourist.jp/view/mt-koya-japanese-spirituality-at-its-best

Noko Island Park, Fukuoka
A relaxing walk surrounded by beautiful flowers

I'd never really had an interest in flowers until I
arrived at Noko Island Park. Originally a fishing island,
the park is now known for its stunning collection of
flowers blooming all-year round. Take my word for it, you
won't be disappointed. I went in April and July and I'm
pleased to report that it wasn't overcrowded as so many
tourist places can be. The whole experience was just
fabulous and very different both times. Be sure to pick up
the pamphlet which includes a flower calendar for when you
want to visit again.

As you come out of the entrance, don't be tempted by the
tantalizing view of the flower path on your right - take
the left turn for a preview of what's to come. You'll pass
a Noko-Noko Ball (golf-croquet) field and see a hill-side
of perfectly arranged flowers. Once you've taken your
photos, go back and take the right turn to experience a
dream-like stroll through the flower path. It includes an
Azalea garden, a Hydrangea garden and Trumpet Daffodils.
Many areas are slightly hidden so make sure to walk
through all the paths - you don't want to miss a thing!

http://japantourist.jp/view/noko-island-park

***------------------------****-------------------------***

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