Terrie's Take 909 (Tourism Edition) - DMOs, Action, and Authenticity - A Tourism Recipe for Remote Prefectures

Terrie's Take terrie at mailman.japaninc.com
Mon Aug 14 08:52:30 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.

Tourism Sector Edition Sunday, Aug 13 2017, Issue No. 909

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+++ DMOs, Action, and Authenticity - A Tourism Recipe for Remote Prefectures

One of the major reasons I got into the travel business was the 
opportunity to not just sell tours and entertainment, but to work at a 
deeper level, helping remote regions to improve their infrastructure and 
attractiveness, and thus help those areas bring home some tourist 
dollars. With the continuing migration of Japanese youth from country 
areas to the major cities, the only thing that will keep those kids 
nearer to home is if they are able to pursue a worthwhile career and 
support their own families.

And so while I'm very focused on building the www.japantravel.com 
business, I nonetheless try to reserve some extra time and energy to 
find and assist regional areas willing to make the conceptual leap 
between just wishing for foreign tourist income and actually doing 
something about it. Not that the regional areas have not been trying. In 
recent years, both through both central government largesse and through 
local desperation, billions of yen have been spent on websites, videos, 
photos, and translation - but which even if people view them, seldom 
result in the tangible result of more foreign tourists.

Why? because even though such prefectures may be wonderful places, the 
fact is that they are usually too remote and lack the wow factor needed 
to draw foreign tourists the extra hundreds of kilometers away from the 
usual ports of entry and proven tourist favorites. The cost of JR rail 
tickets and domestic airfares also doesn't help.

Earlier this year I had the opportunity to propose a deep project to a 
certain northern territory that is remote from Tokyo and which is not 
directly serviced by western airlines (they have two infrequent Chinese 
air routes and one Korean air service). The area has all the right 
components for a tourism industry - remote rugged coastline, hiking 
trails and climbable mountains, apples and other bounty of the land, 
ancient villages and bucolic countryside hamlets. But while it has all 
these things, with the exception of one festival, no one point is 
outstanding enough to pull the foreign tourist in preference to other 
more convenient places with the same attractions. For example, if you 
want nature and you're entering at Tokyo, Tochigi fits the bill and is 
just 100km away. If you're entering at Sapporo, then you have the 
breadbasket of Japan at your doorstep, so why travel further?

[Continued below...]

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As you might have guessed, the region is Aomori, a wonderful part of 
Japan that attracts about millions of Japanese domestic tourists (35m 
room nights) with its distinctive scenery and cool-weather 
fruit/vegetable harvests every year. But in contrast, the region last 
year only received enough foreign tourists to have spent just 100,000 
room nights there. Remember, that's room nights. So if you assume that 
each person there for the Nebuta Matsuri (the peak attractant for 
tourists in the area) is staying for at least 2-3 nights, then the 
actual number of people traveling to Aomori is probably far less.

So how does Aomori combat the fact that it is being eclipsed by Hokkaido 
to the north and by equally scenic locations to the south? Given that 
the Nebuta festival is such a huge hit, maybe they should start another 
festival? The problem here is that their inbound travel traffic already 
clusters around the Nebuta event and as soon as it is over, the number 
of visitors plummets. So, given the amount of effort and funds it would 
need to start a second festival, the benefit to the area is still going 
to be a short peak and empty hotel rooms for most of the rest of the 
year - probably a poor return on investment. Better that they use the 
Nebuta festival as an eye-catching marketing point, but after the 
awareness level is raised, look to shifting visitors to other points of 

Aomori, like so many other remote regions around Japan, needs to find 
something it's good at and which can be delivered for at least 6-9 
months a year. An attractant that takes advantage of their remoteness 
and many kilometers of rugged coastline. Then once they have decided on 
that main theme, they need to apply imagination, development funds, and 
persistence to turn it into reality. My own proposal to Aomori was that 
they should focus on becoming an adventure destination - on the basis 
that if the experience is compelling enough, then the remote location 
will become a blessing not a curse. Among the increasingly popular 
sports overseas that people are traveling great distances to enjoy, are 
hiking, cycling, kayaking, and mountain climbing -- all a good fit for 
Aomori. (OK, and of course skiing and cross-country snow sports in the 

It's not like these sports are not on the minds of the Aomori tourism 
folks, indeed, it's kind of obvious. Rather, the challenge for them and 
in fact for any prefectural government is the idea that they need to 
move beyond just being an information provider. They need to dig into 
the business infrastructure of their region and help lift the commercial 
boats at the same time as telling the world what they have. I do find it 
interesting that local governments all over the country are so shy in 
getting involved in business, especially since this is the home of 
"Japan Inc." Perhaps it's because of past incidents of collusion between 
governments and business which subsequently became scandals. However, 
now that we have the whole emerging trend of properly structured and 
reported Public-Private Partnerships overseas, it seems that the 
opportunity for collaboration between government and private business 
has become appropriate once again. And of course this is a big 
contributing factor to the rise of Destination Management Organizations 
(DMOs) around the country.

http://bit.ly/2fCUHIq [Definition of DMO]

If Japanese local governments can get themselves motivated to help 
fund/administer a ground shift in inbound tourism investment, then what 
needs to happen is the following:
a) They need to invest in tourism projects that are meaningful 
multi-year efforts, rather than the current light-weight one-year budget 
periods. I don't understand why local governments are allergic to 
long-term commitments. Maybe the new DMOs will fix this.
b) They need to create infrastructure that is geared to tourism rather 
than local constituents' practical needs - such as cycle ways, campsites 
in remote areas, and upkeep of tracks for non-locals to trek through.
c) They need to continue their financial and administrative involvement 
beyond mere creation and promotion of travel information - instead 
focusing on creating a public-private technology ecosystem whereby local 
merchants can build resources, upload and market their inventory in real 
time, run their actual operations in the cloud, and accept foreign 
payments from a diverse range of cards and payment methods.
d) They need to create a business loans environment that lets local 
merchants invest with confidence in more rooms, more attractions, better 
facilities, beautification, and infrastructure. The most practical move 
would be to offer guarantees and loans backing to local banks as well as 
to some regional venture capital investors (some prefectures such as 
Fukuoka and Sendai already have such VCs).

Moving to such a high level of involvement with the root operations of 
tourism is certainly not second nature to local governments. And yet, if 
they don't move into this role, then who will? Central government 
funding all to often goes to the big corporations in Tokyo, and local 
private sources of capital are so risk averse that for them there will 
never be a time when foreign tourists will be important enough to lend 
money over.

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There are some other parts of Japan which have created an image for 
themselves that has not only overcome the remoteness of their locations, 
but in fact has enhanced the romantic association that such remoteness 
lends. Take, for example, the Nakasendo pilgrimage route in the Kiso 
Valley (Gifu Prefecture), which now draws thousands of wealthy foreign 
tourists to such small towns as Magome and Tsumago. There was a time not 
so long ago, that this area was unknown and overlooked by foreigners. 
But thanks to the persistence and end-to-end efforts of tourism 
companies overseas to make the journey a vivid trip back into history, 
the idea has caught on. There was no DMO involved, but it is a great 
example of how "content" trumps distance.

Another good example is the Minakami area which has become an extreme 
sports haven in central Japan. Originally based on the efforts of one 
Kiwi-led company, Mike Harris' Canyons, the Tone river is now ground 
zero for whitewater rafting and canyoning adventures in Japan. 20 years 
ago there was just one operator on the river carrying maybe half a dozen 
rafts a day, now there are multiple operators with 10 times as many 
rafts and passengers. The whitewater rafters of course need something to 
do in the afternoons, and so now bungy jumping, canyoning, and 
paragliding are becoming popular in the area as well.

What Aomori can learn from the DMOs and Nakasendo and Minakami is that 
if you mix experience-related investment with action and a multi-day 
course, people WILL travel to even remote locations to enjoy an 
experience they can't get elsewhere. Just like they travel to 
Disneyland. As with both of these locations, you need a mix of dedicated 
local merchants who are willing to create services that match the 
environments they are based in, and who will push to envelope to ensure 
that the experiences are not smothered with too much Japanese 
over-control, or by poorly developed surroundings. Modern tourists 
willing to travel far for an experience also want that experience to 
feel authentic. If they are riding a wild river, it really does need to 
be wild, and not tamed with concrete. If they are seeking a piece of 
history, you'd better try to get rid of the power poles and cheap 
post-war prefabs that otherwise despoil a special location.

I don't know if Aomori will buy into my proposal, which in any case is 
only a small part of what needs to be done. But I can say that if they 
and other equally remote prefectures don't make the effort, then due to 
their lack of natural gifts like spectacular mountains or volcanoes, 
they will be doomed to a tourism future of mediocrity. Which would be a 
sad thing, given that the people, the food, and the existing scenery are 
pure Japan - service-oriented, wholesome, and memorable. Just they need 
the value added content that creates the experience that people want 
badly enough  they'll travel long distances to enjoy it.

...The information janitors/

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

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