Terrie's Take 800 (Tourism Edition) -- Breaking Down Exclusionism and Vested Interests

Terrie's Take terrie at mailman.japaninc.com
Sun Apr 19 21:47:00 JST 2015

* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie 
Lloyd, a long-term technology and media entrepreneur living in Japan. 

Tourism Sector Edition Sunday, April 19, 2015, Issue No. 800

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+++ Breaking Down Exclusionism and Vested Interests

Last week my travel business, Japan Travel, launched Japan's first open 
tours marketplace for inbound travelers. While there are of course 
plenty of other websites that let you book tours in Japan, you will 
quickly find that these sites are either run by the tour operator, or 
they are operated in a way that allows the operator to skirt the law 
(more on this in a minute). Until now there hasn't really been a local 
Craig's List type of tours marketplace. So we thought we'd start one. 
You can find it at www.japantravel.com/tours.

The site is still in its first incarnation and still has a long way to 
go. We decided to feature tours that speak to our long-term goal of 
wanting to get people out of the Golden Triangle (Tokyo, Kyoto, Osaka) 
and explore Japan in greater depth. Staples such as Harajuku, Ginza, 
SkyTree, Mt. Fuji, Kiyomizu-dera Temple, the Hiroshima A-Bomb Dome, 
etc., are all fine, but there is so much MORE to Japan. For this reason 
we are searching for tours that you normally wouldn't think exist, and 
yet which can stimulate people to keep coming back for more. The more 
this happens, the healthier Japan's rural economy will become.

Some of the tours that we are still working on (so the site really is 
still in its infancy) include temple vegetarian cooking lessons, visits 
to Katana (sword) makers who are working on bespoke orders for high-end 
foreign clients, bilingual teachers showing how to use specific advanced 
gadgets (e.g., programming Japanese-made robots), visits to regional car 
auction sites after which you can actually buy the cars, WOOFing for 
several months at rice and green tea farms, and even overnighting with a 
cranky monk who will let you join him in prayer and hiking. Basically if 
you can spend time on it and can stay there, then we want to include it.

Showing such unique sides of Japan is a good thing isn't it?

[Continued below...]

-------------- Have a Tour to Promote? --------------------

Japan Travel is recruiting tour operators who would like to list their 
inventory on our new Tours Marketplace (http://bit.ly/1IsujUw). Listing 
is free, and only successful bookings will attract a marketing fee. Take 
advantage of our position as Japan's largest independent inbound travel 
website (714,000 unique users in March, 2015) and give your tours the 
exposure you need to develop your business. We are particularly 
interested in tours that include a unique aspect of Japan and where your 
marketing collateral includes strong photography and/or videos, 
evocative descriptions, and strong appeal. After June 1st, all new tours 
MUST include at least a one-night stay or formal (not public) ground 

Operators and agents wishing to apply, contact info at japantravel.com

Well, "yes", in that it helps to demystify the country and makes the 
rural sectors more accessible, and "no" in that it raises all kinds of 
problems with Japanese bureaucracy. One of the ugly sides of Japanese 
tourism is that the sector is aggressively defended by the incumbents 
and they don't want outsiders stealing their cheese -- especially as the 
inbound market enjoys its first significant expansion in more than 40 
years. This means that foreign innovators such as Airbnb, for example, 
are faced with huge hurdles getting started in Japan and may yet be 
forbidden through legal action from really getting off the ground.

Apart from accommodation, other legally over-regulated parts of the 
inbound tourism sector include charter flights, tour guides, travel 
agencies, ground transport, phone rentals, vehicle rentals, airport 
kiosk operations, personnel dispatch, and... well, the list goes on. My 
impression is that the regulations are designed to channel bond monies 
and other fees to NPOs staffed by people who have little to do with 
traveler service quality and protection, but who live quite nicely off 
the proceeds.

Take tour guides for example, a subject we have covered before. The 
guide exam is sufficiently difficult (of course in Japanese only) that 
to my knowledge there is only one foreigner who currently working as a 
registered tour guide in Japan. In Tokyo out of 76 listed registered 
guides, no one is non-Japanese. Fees are regulated, and the punishment 
for infringing the rules is a JPY500,000 fine, although no jail time. 
Side note: no jail time is a significant point, because it means there 
is regulation but not unmitigated illegality. In other words, it's a law 
that is not taken particularly seriously by the judicial system, and 
this probably explains why as of 2010 there had never been a prosecution 
of an illegally operating guide.

If there is an undertone related to the Japanese tourist industry, it's 
one of exclusionism and vested interests. For example, a review of the 
nation's top panel on inbound tourism policy, The Advisory Council on 
Tourism Nation Promotion, shows that it doesn't have a single foreigner 
in its ranks. It is amazing (a positive thing I guess) that they let a 
"maverick" like Hiroshi Mikitani from Rakuten in there, though. The 
member list for this rather important group and the interests they 
represent can be seen here:


What this means on a practical level is that anyone wanting to do 
something innovative in tourism in Japan either has to be extremely 
creative or break the law. I've decided to work on the creative aspect, 
however, in contrast a number of successful online travel agents have 
realized that simply ignoring Japanese laws is easier. They can do this 
by operating outside the country and thereby taking advantage of the one 
huge weakness of the Japanese legal system -- that it can't and won't 
enforce against companies and individuals who are not resident in Japan.

[Continued below...]

------------------ ICA Event - May 21st -------------------

Speaker: Rochelle Kopp - Managing Principal of Japan Intercultural 
Title: "Managing Across Cultures"

Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, May 21st, 2015
Time: 6:30 Doors open, Buffet Dinner included and Cash Bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No sign 
ups at the door!!!!!!!
RSVP: By 5pm on Monday 18th May 2015. Venue is The Foreign 
Correspondents' Club of Japan.

So when you see an online site offering cheap guides or low-cost 
holidays, take a careful look and see how many of their staff are based 
in Japan -- usually none or one. If there is someone in Japan, then they 
will technically be in a support and service role, not part of the 
selling and money-collecting processes that the Japanese authorities are 
so eager to stop having happen at home. This structural separation makes 
it difficult for the authorities to shut them down.

You might ask how it is possible for someone operating outside Japan to 
run a successful Japan inbound travel business. Ten years ago it would 
not have been possible, but now with the help of the Internet to 
identify independent and willing providers of ground transport, the 
utility of Booking.com and other online hotel services, rapidly 
increasing acceptance of credit cards, and by selling with the euphemism 
"Self guided tours" or sending in a Japanese-speaking tour "leader" from 
the home country, it is.

I'm not complaining about the off-shore operators, because their 
services are typically professional and the tours are innovative. 
Indeed, they are shaking things up and that's healthy for an atrophied 
industry. Rather, if the trend continues, then there will be a tipping 
point where they are taking sufficient business off the table that the 
government will realize it can't hold back the tides of change. We will 
see just how far in the future this tipping point occurs when the 
government decides what to do about Airbnb, which is no longer off-shore 
but which is still very much a disruptor and innovator.

If the government allows Airbnb to stay but requires a modification in 
format (as happened to PayPal in the payments industry when it 
"legalized" its operation in Japan), then it will be a big concession 
and a signal of change. If on the other hand they kick out Airbnb, as 
rumors currently suggest will happen, then the message to foreign 
investors in the Japan tourism sector will be clear -- keep innovation 
off-shore and stay outside the short arms of the Japanese legal system.

Lastly, some of you might notice that this is issue 800 for Terrie's 
Take -- another significant milestone (century) for me, and one that 
happens every two years. I'd like to thank my readers for your wonderful 
friendship, feedback, and education. Yeah, I get lots of better-informed 
opinion after some of my rants, and that certainly helps me think things 
through better in future issues. I will continue to put my worst 
transgressions up as Corrections, so please keep the comments coming.

...The information janitors/


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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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