Terrie's Take 882 (Tourism Edition) -- We're Getting into the Cycling Business!

Mon Feb 6 00:04:19 JST 2017

* * * * * * * * 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.
(http://www.terrielloyd.com)

Tourism Sector Edition Sunday, Feb 05, 2017, Issue No. 882

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+++ We're Getting into the Cycling Business!

At the end of December, Japan Travel KK signed a contract with Japan's 
largest bicycle rental company, DoCoMo Bike Share ("DBS" for short) - a 
company you've probably never heard of. The contract calls for Japan 
Travel to become DBS' main (but not sole) marketing and sales partner 
for foreign inbound tourists. This is a big deal for us because DBS has 
thousands of bicycles across the country, and has agreements with many 
cities and wards that allow them to keep the bikes conveniently 
available out on sidewalks. You've probably walked past DBS bike ports 
many times. The bikes are bright red and are recognizable due to the 
sophisticated control/communications box on the back. They're located in 
most, but not all, inner Tokyo wards.

Actually, it's that control box on the back of each bike that opened the 
door for us to do business with DBS.

Firstly, you might wonder why DoCoMo, a mobile telecomms company, is in 
the bicycle business at all? The reason is because the firm wanted to 
establish a working example of how Internet of Things (IoT) devices 
could be used in the real world and hit on bicycles as its Proof of 
Concept (PoC). That PoC has since become a multi-million dollar company 
in its own right. I guess one of the original planning team liked cycling?

The IoT capability allows DBS to know where a bicycle is at any given 
time - useful when your business is all about letting people ride from 
one place to another and not requiring them to have to return the bike 
back to its original location. The company uses various systems to track 
used bikes and to decide when to "balance" them by shipping some to 
other parking ports.

The control box also allows security of the bikes. You either need to 
subscribe to get a season pass Felica card (similar to a Suica card but 
currently not compatible), or go through a Japanese security check then 
use your credit card to get an online-issued one-time PIN number. Unlike 
city bikes in London, New York, or other countries, the DBS system 
doesn't support cash, coupons, or on-street kiosks, mostly because of 
complex local government regulations dictating how the company uses 
public space - and equipment cluttering sidewalks is not part of their 
vision. Japan Travel's role will be to make it easier for foreign 
tourists to sign up for bikes in their own language, and to provide 
extra services such as helmets, phones, and tours.

The tours were a strong motivator for both parties to do the tie-up. 
It's long been a goal for us to help people break free of the umbilical 
cord that is a JR rail pass (or equivalent subway pass) and get them 
exploring the whole city rather than just the overcrowded precincts of 
the train station. Tokyo, and indeed most Japanese cities, have a ton of 
great sights, historical areas, restaurants, and parks that are only 
accessible if you have your own transportation. While a city bike like 
DBS' electric jalopies are not long-distance machines, they nonetheless 
can do 35-40km on a single charge, and therefore are more than adequate 
for casual exploring. Put another way, a bicycle allows you to travel 
4-5 times the distance you'd cover walking, and thus let you see more 
and/or be more selective about the locations you do want to see and 
experience.

[Continued below...]

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--- 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.

If you have a group needing assistance, we invite them to contact us at: 
tours at japantravel.com.

Or visit our pages at:http://bit.ly/29c2eG5
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Our cycling tours business model will have two variants: self-guided 
trips, with maps and location explanations, and tours guided by a 
knowledgeable local who speaks the travelers' language. For the 
self-guided tours, we are working with several technology vendors to 
bring our itineraries to life on smartphones. Served as geo-aware apps, 
we will comment on points of interest while sync'ing with the rider's 
location - thus they can go as fast or slow as they like and still have 
a smooth experience.

Because successful traveller apps need to be detailed and therefore 
complicated to make, we plan to sell them for between JPY300 and JPY500 
each. The verdict is still out on whether travelers to Tokyo will part 
with that kind of money, but as one of our tech partners told us, they 
had 10k downloads of their best London app, priced at 5 pounds each, in 
just 3 months. So we're somewhat hopeful.

If the model works, I'll be delighted - not just because of the extra 
income to the company, but more importantly because we will be able to 
profit share with the more talented contributors in our community. 
Currently our contributor community numbers more than 22,500 people and 
is fueled by a points-and-rewards system, which has been great, but 
being able to offer a cash-based system as well should help our creative 
types better justify the extra time and energy investment. Airbnb lets 
people share accommodation, so why not let our community members share 
their local knowledge in the same way?

The cycling tourism business in Japan could become quite significant, as 
it has in other countries around the world. A 2016 study found that 
cycling tourism contributes somewhere between £236.2m and £358m a year 
to the Scottish economy, a country that receives 14.5m inbound tourists 
(mostly from England). A 2014 Canadian study found that apart from 
actually riding, cycling tourists most enjoyed:
* Culinary experiences (yup, cycling makes you hungry), visiting 
cultural sites and museums, hiking, camping, wine tasting, and shopping.
* 67% of cycling event participants took part in other non-cycling 
activities including visits to museums, breweries/wineries, and kayaking.

A 2013 study by Tourism New Zealand of its primary markets found that 
there were 13.8m cyclists (ACs: Active Considerers) interested in doing 
cycling tours in New Zealand. When you look at the markets they list, 
you can see the potential for similar visits to Japan.
* China - 6.2m ACs, USA - 4.2m, Germany - 1.1m, UK - 0.9m, and Australia 
- 0.8m

Perhaps even more interesting, Tourism New Zealand surveyed the UK 
cohort on their preferred destinations and found that while New Zealand 
was their single most preferred target, second was the USA (84%), third 
was China and Japan tied at 82%, then Germany at 68%!

I'm not the only one who thinks Japan is on the cusp of an inbound 
cycling boom. I am aware of plans afoot all across the country by 
prefectural governments wanting to get tourists out to their rural 
areas. As Japanese government bodies are wont to do, they plan to spend 
most of their money upgrading their roads and cycleways, using a tiny 
amount left over for marketing. That's fine by us, though, as our main 
revenue source will be in the tourists themselves, not a prefectural 
government budget. With DBS, we are working to build a substantial 
inventory of high-end rental road bikes, mostly carbon but some 
aluminum, and use these to assist those prefectures to create a premium 
product.

In short: the prefectures have the onsen, the roads, the open markets, 
and the beautiful views, and we have the bikes, the personnel, and the 
marketing.

...The information janitors/
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