Terrie's Take 859 (Tourism Edition) -- Discovering Niche Opportunities in the Inbound Tourism Sector

Terrie's Take terrie at mailman.japaninc.com
Mon Jul 25 09:24:24 JST 2016

* * * * * * * * 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, Jul 24, 2016, Issue No. 859

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+++ Discovering Niche Opportunities in the Inbound Tourism Sector

Most of my friends in the IT sector, a business that I was also in for 
almost 30 years, live orderly and predictable lives. So when I tell them 
that I'm now in the travel sector and what a hotbed of opportunity it 
is, I'm often told I have one of the best jobs around - getting to 
travel and innovate the sector, and yet still enjoy the stimulation of 
creating systems and technology solutions. Of course it's not all plain 
sailing and competing with the likes of Expedia and TripAdvisor is no 
small challenge. But by being nimble, and looking after niche markets 
such as custom and adventure travelers, we are experiencing steadily 
rising demand. Better still, currently we have very little local 
competition in either sector.

Our typical custom traveler is either a family or business group. 
Usually they have some very specific objectives and so need specific 
research and negotiations by us on their behalf. Usually the group is 
just big enough that they can't easily use Booking.com, which maxes out 
at about 6-8 people, and logistics are difficult enough that they can't 
be sure of getting enough LCC or train seats to move everyone together. 
Then of course there is the need for the special suppliers and events - 
requiring some serious imagination and customization that most of our 
package-obsessed Japanese competitors don't want to deal with. So this 
is a very promising niche.

Our biggest custom traveler source markets are SE Asia, particularly 
Singapore, where people have the budgets and previous visit experience 
to value new and interesting opportunities; the Middle East, where they 
typically have larger families and thus have a greater need for 
logistics planning; and Europe, where corporations see Japan as an 
interesting new conference and training venue.

We're often asked, "Well what does your company specialize in?" because 
elsewhere in the world, the custom travel business is highly competitive 
and you're either an events specialist, or a package tours company, or a 
religious tours company, and so on. Instead, we just tell them that we 
do "whatever the customer requires -- just like a Systems Integration 
company." This usually satisfies the other party and of course brings me 
personally full circle back to the core concept of creating processes 
and solutions for my customers... :-)

[Continued below...]

--- Japan Travel Inbound Travel Professional Services -----

Japan Travel's inbound company travel professional services team now 
serves incentive and group training logistics and support. We assist 
your headquarters HR teams in hosting your foreign employee groups in a 
successful program in Japan. Our services include: hotels, 
transportation, meals (including special diets), entertainment, 
activities, help desk support, telecommunications, guest speakers, and 
of course the core training (delivered by our professional training 
services partners). We work on a menu-basis, providing as much or as 
little as your management team needs to get the project done.

Our customers include major foreign organizations looking to bring 20-40 
people to Japan. Our value-added services include helping to hire expert 
guest speakers to provide memorable highlights for the group visit. 
Speakers can include foreign and Japanese entrepreneurs, who share 
secrets about how Japan Inc. works; entertainers and artists who provide 
in-depth access to the nation's core values; and subject matter experts 
who are directly related to your training or incentive group's 
professional interests.

If you have a group needing assistance, we invite them to contact us at: 
tours at japantravel.com <mailto:tours at japantravel.com>.
Or visit our pages at:http://bit.ly/29c2eG5

So there is opportunity in custom tours... But even with systems in 
place, having to inject expert humans into the process of helping 
individual customers decide what to do still creates a serious cost 
disadvantage compared to the machine-driven businesses of Online Travel 
Agents (OTAs). One way to avoid this conflict is to focus on segments 
where human knowledge and interaction are actually valued and thus not 
up against a Trip Advisor "time-limited 25% discount".

One segment that sits high on Maslow's Hierarchy of Needs and thus lends 
itself to value-added human interaction is adventure travel, meaning 
sports and thrilling experiences. This is because the customers are 
usually traveling for something they are passionate about, and thus they 
are more likely to:
* Travel to more remote places rather than just Tokyo, Osaka, and Kyoto, 
and one of my personal goals is to help open up rural Japan
* Be more willing to travel outside of peak (seasonal) periods, since 
their activity is THE purpose for travel
* Be more financially committed to making their experiences happen, and 
thus have the budget to do something interesting and over a sustained period
* Have more technical expertise in their activity and thus value 
artisanship and skill of the suppliers over lower price and 
simple-minded convenience
* Spend their budgets on services rather than things, creating a channel 
of income for local people who don't have the resources of financiers 
and factories
* And perhaps most importantly for us, be more likely to keep coming 
back to Japan, since the best customer is the repeat customer

For us, "Adventure" means cycling first and foremost, since this is not 
only an activity, it is also an effective and low-cost way to transport 
people around the country. But there are tons of other summer 
activities/sports such as kayaking, white water rafting, diving, hiking, 
paragliding, bungy jumping, drifting (as in car drifting), ziplining, 
sailing, to do in Japan and that are worth traveling for. And, of 
course, there is snow sports in the winter. Yes, some of these 
activities, such as sailing, are still emerging, and the sophistication 
of the practitioners and their equipment is still low. But if there is 
one thing no one ever accused the Japanese of, it's an inability to 
learn and learn quickly.

I'm convinced that Japan will become East Asia's adventure sports 
destination for the following reasons:
* In the region, Japan has one of the best unspoiled seasonal 
environments left
* It's safe, no matter how far into the countryside you go
* The infrastructure and equipment and tour leaders/guides are all reliable
* Japanese love "gear" and so will ensure their guests are well prepared
* Easy access by public transport
* Undervalued land and labor inputs in the countryside, make Japan quite 
* In winter, Japan already has snow sports well covered

So where are the opportunities? They are almost everywhere you look.

Take that comment on "gear", how things are currently unsophisticated, 
and how improvement will attract a lot more repeat visitors. I was 
referring to sailing, but a much better example of how "gear" will bring 
guests is cycling. Right now, there are virtually no carbon road bike 
rental companies in Japan, and yet the nation's roads are smooth and 
fast and perfect for good quality equipment. It seems that the word has 
got out, because the demand (2017 season) for road cycling tours from 
Europe and particularly the UK market is starting to really ramp up. 
Experienced travel wholesalers are excited to be able to offer Japan as 
both rustic countryside and high-tech equipment married together.

Seeing the gap in supply as an opportunity, we went and negotiated a 
deal with a leading Japanese cycling retailer to get bikes that they 
would keep maintained for us. To be honest, I don't want to go into the 
cycle rentals business, but for the want of someone able to supply them 
and this being a big "plus alpha" for travelers until a more substantial 
vendor comes into existence, we decided to help fill the gap. I see a 
similar kick-start opportunities in other sectors as well - basically 
wherever there is a need for equipment and support of that equipment.

Where will this all take us? Well, if you look at the snow sports 
sector, Japan today is a leader in both the sports themselves and the 
gear to handle them - making the country a top destination in the 
winter. I believe that on the back of special interest repeat tourists 
from around Asia, some of Japan's summer sports, such as cycling and 
kayaking, will enjoy similar popularity and the country will become a 
mecca for adventure travelers in these newer sports 5-10 years from now.

...The information janitors/


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

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