Terrie's Take 861 (Tourism Edition) - Recent Trends in Inbound Tourism, Cycling Tour
terrie at mailman.japaninc.com
Mon Aug 8 08:22:29 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, Aug 07, 2016, Issue No. 861
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+++ Recent Trends in Inbound Tourism
Back in March we wrote about the fact that the rising yen wouldn't put
off the flow of foreign inbound tourists to Japan, so long as it stayed
within a certain band. Research of other inbound destination countries
that have had large currency movements in the past has shown that you
need to have movements of about 20% in the short term (less than 3
months) and 15% in the long-term (4-12 months) to see a noticeable
"Japan is too expensive" effect on tourism. Looking at the exchange
rates for Japan's largest inbound source markets: China, Taiwan, South
Korea, Hong Kong, and Thailand, in the last year their currencies have
typically weakened about 10%-15% and yet tourist inflows are still
rising. Thus the theory seems to be holding true.
Japan Tourism Agency (JTA) numbers released at the end of July showed
that foreign inbound travelers for June 2016 were up a surprising 23.9%
over June 2015, although it should be noted that increases for the
previous couple of months were muted because of the Kumamoto earthquake
reducing the number of Korean arrivals into Kyushu. Nonetheless, for
June there were 1.98m arrivals and overall for the first six months of
the year 11.71m arrivals - meaning that half way through the year
Japan's tourist inflows are up 28.2% and for the rest of 2016 we could
well reach 25m travelers. This is really impressive growth.
What is driving the renewed surge in visits? According to the Nikkei,
cruises ships are one factor, with 156 visits to Japanese ports in the
first half of 2016, up 77% over last year. These cruise ships generate a
huge influx of tourists to regional and countryside areas, and are a
real boon to local economies. I was in Kochi City in Shikoku last week
on a local government project, and everyone I met wanted to talk about
the flood of 4,000 passengers from a single ship due to dock the
following day at this 340,000-person city. Normally Kochi has a hard
time getting tourists because of the lack of access options and so one
shipload of passengers is worth a whole month's worth of LCC customers.
------------ Cycling Tours Trial Run in 2016 --------------
In 2017 Japan Travel KK will start offering cycling tours around the
nation. As a run-up to this, we are going to offer two special
discounted "guinea pig" tours, for intrepid cyclists who would like to
help us firm up our routes. A requirement of both trial tours is that
you bring your own bike (easily done since most airlines offer sports
equipment luggage discounts), and the group will not be using a support
car. Otherwise the itinerary and scenery will be much the same as the
commercial version next year.
Tour One: September 26-October 01, 2016. This 6-day, 5-night tour by
road bike takes you from Hiroshima to Shikoku via the Shimanamikaido
bridges, then back to Hiroshima via ferry and backroads. Highlights of
the tour will be the bridges, which are spectacular, quaint fishing
villages on each of the islands, low traffic and great road surfaces,
and of course lots of coastal scenery. Japan Travel can assist with
transfers to get to Hiroshima. Group size will be 5-15, and the fitness
level needed is "medium", which for us means that you ride less than
100km a week normally and can do about 60km-80km per day of sustained
flat country riding or 40km-60km per day of medium-level (10% grades or
less) hill climbing. Hotels will be 3-star and minshuku. Price will be
approximately JPY150,000 plus airfares.
Tour Two: October 10-October 16, 2016. This 5-day, 4-night tour by road
bike takes you from Nikko in Tochigi to Inawashiroko in Fukushima, via
countryside areas south of Aizu Wakamatsu, Ouchijuku and Lake Tenei.
Highlights of the tour will be the turning leaves, country backroads,
spectacular coastal riding around Inawashiro Lake, and onsen. Japan
Travel can assist with transfers to get to Nikko. Group size will be
5-15, and the fitness level needed is medium-to-difficult, meaning you
ride less than 100km a week normally and can do about 80km-100km per day
of sustained flat country riding or 50km-70km per day of medium-level
(10% grades or less) hill climbing. Hotels will be 3-star and minshuku.
Price will be approximately JPY135,000.
If you are interested in joining either group, please contact us at:
tours at japantravel.com.
What's great about cruise ships is that you don't need hotels and even
restaurant infrastructure, so long as you can find enough buses, you can
distribute people out to the many attractions that normally service
locals. Kochi has some really nice botanical gardens, a massive covered
shopping street, and of course a very well preserved castle - one of
only seven in Japan to be made of original materials. All of these
facilities are enjoying a big jump in receipts and are now planning to
upgrade services (buses, language support, credit card acceptance, etc.)
so as to become more foreign visitor friendly.
Asians account for about 85% of inbound traffic to Japan, and so the
health of the Asia-wide economy is an important factor to continued
tourism growth here. Short-term concerns about the Chinese economy have
eased, but it's clear that "bakugai" (explosive buying) by Chinese
tourists has passed and people from that country are now looking for
more activities and food experiences. This is not to say that the
Chinese are not buying, though, just that purchases have moved from
high-end electronics goods to more affordable consumables such as
cosmetics and snacks.
Another noticeable trend is that large percentage of Asian visitors who
are repeaters - this demographic only continues to grow. Repeat
travelers are more adventurous and are migrating away from the major
cities after a short arrival stay, and exploring the countryside. If we
were to characterize trends for travelers from each major source
country, it would go something like this: i) Chinese families are
increasingly going to Kanazawa on the new shinkansen to enjoy the food
and sights, ii) South Koreans are once again catching ferries from Busan
to visit Kyushu onsen after a short hiatus after the Kumamoto
earthquake, iii) Thais are booking packages in Hokkaido to experience
snow, iv) HK youths are catching either of the city state's two LCCs to
16 regional locations in Japan and going everywhere using JR rail
passes, and v) Singaporean families are traveling in groups to Honshu
and Hokkaido fall and winter seasons also using the JR rail passes.
Of course the make up of travelers is far more complex than my simple
characterizations just now, and with the numbers getting so large (2m
people a month), there are many niches emerging. Japan Travel's own
client flow is as good an indication as any: we are seeing confident
repeaters renting cars, camper vans, and even long-term houses to base
themselves. Language is still a barrier for most people and so travel
agency services are doing well. Our biggest demographic in terms of
requests is from Singaporean housewives and Malaysian professionals, who
are repeaters and who are organizing a family or group tour to Japan and
who want to explore the countryside. As government research has
indicated, and which I can confirm, most customers are firming up their
travel plans about 2-3 months prior to their trip, meaning that right
now inquiries are for the fall season.
From what I can see of mid-term market trends, the Japanese market will
start to look more and more like the European one, where first-time
travelers take packages and public rail passes, and repeaters go for
cars and alternatives to get them off the beaten track. The government
needs to be thinking to extend its infrastructure projects away from the
major cities and to encourage local areas to create at least one
"authentic" point of attraction each. Authenticity is why foreign
tourists are recently flocking to Takayama, despite the lack of access
options, because that city and nearby locations features many older
buildings and streets and because of the traditional culinary expertise
of the area.
Unfortunately "infrastructure" to bureaucrats usually involves dams,
roads, bridges, and other unsightly objects in Japan's otherwise
beautiful hinterland. So the government needs to learn that for
tourists, infrastructure projects should involve actually REMOVING the
unsightly and restoring a feeling of earlier times. For example, power
lines need to be buried underground, natural landscaping (rocks and
plants) of the nation's rivers and coastline is long overdue, and old
roads need to be given a new lease of life as walkways and cycleways.
Per what happened in Italy in the 1990's as part of that country's
effort to build rural tourism, infrastructure spending in Japan should
also mean low-cost/no-cost loans to owners of iconic buildings and
landmarks, to rebuild in natural materials and with natural styles. Less
prefab multistory homes and more post-and-beam originals. If this
happens, then I have no doubt that the number of inbound tourists will
not only hit 25m or more, but that this number will be sustained thanks
to a loyal following of Japan fans around the region. Will this happen?
Well, Japan's bureaucrats are smart enough that once they look at the
natural flows of repeaters over the next couple of years it will become
obvious why foreign travelers congregate in certain locations, and they
will try to replicate that elsewhere.
...The information janitors/
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+++ ABOUT US
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)
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