Terrie's Take 961 (Tourism Edition) -- A New Guide Service for the Naive and Trusting

Terrie's Take terrie at mailman.japaninc.com
Mon Sep 17 13:57:59 JST 2018

* * * * * * * * 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, Sep 16, 2018, Issue No. 961

SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at: 

+++ A New Guide Service for the Naive and Trusting

With nearly JPY5trn being projected for inbound tourist spending this 
fiscal year, the Japan inbound travel market is certainly stoking the 
commercial hopes of many start-ups around the country. Every day some 
new firm with JPY10m~JPY20m of initial funding, announces a grand 
strategy for taking over the tourism sector. While I suspect that many 
of these firms won't make it past the Olympic Games in 2020, the types 
of businesses they are jumping in to do signify notable trends in 
Inbound Tourism, and furthermore reveal the thought processes of the 
larger public firms and private investors backing them.

One such company to catch our attention this last week was Huber, a 
matchmaker of mostly Japanese students acting as low-cost uncertified 
guides to foreigners who feel intimidated by the language barrier here. 
In essence Huber's business model is extremely simple, and although 
already incorporated into larger businesses by a number of players, 
including the likes of HIS and NEC, the company has successfully defined 
its niche with a pure-play message, and is reaping the benefits as a 
result. Indeed, this do-one-thing-really-well differentiation may be the 
magic ingredient they need to become a leader.

The announcement last week was actually by Huber's investor and main 
collaborator, ANA, which said that the two firms would start offering a 
tour guide matching service for foreign travelers by December this year. 
In making the announcement, ANA is continuing its push to extend its 
services line-up to become a full-service travel resource and not just 
an airline selling tickets at the cheapest price. Whether this approach 
will work for an airline is hard to say, because selling seats on 
airplanes is pretty much a commodity business, but we don't doubt that 
ANA is looking at Airbnb and its expansion into experiences, as a 
direction for the future. Our take is that after making all these 
alliances, ANA will eventually come to realize (some years from now) 
that it's all too complicated, and risky, and eventually return to its 
core business.

[Continued below...]

-------- UK property Investment Seminar in Tokyo! ---------

Date: 9/22 (Sat) 2018 12:30 - 20:00

Have you ever thought of investing in a 7% yield UK property from Tokyo?
On September 22nd, CERT Property, is proud to offer the opportunity to 
invest in their newest ANCOATS GARDENS project to foreign residents 
living abroad in Japan. ANCOATS GARDENS is located in the centre of 
Manchester about 7 minutes from Victoria Station with access to the 
Metrolink. Scheduled for completion in 2020, the new development will 
house 155 sophisticated apartments of various sizes where residents will 
have access to an outdoor terrace, and other facilities.

For more information and registering for this event, visit 

[...Article continues]

But in the meantime, having a partner like ANA will be great for Huber. 
If nothing else, they will have a flood of traffic, since airlines, not 
OTAs, are where most intending tourists make their first substantial 
travel purchase. Huber has also done a great job of bringing in 
investment from another local powerhouse - Tokyu - a very large 
conglomerate with all the right assets to service tourists, including: 
trains, hotels, shopping districts (Shibuya), entertainment facilities, 
and office complexes. The other big factor for Huber is that its service 
only became legal this year, when the Japanese government decided to 
change the law allowing unlicensed guides to work for money, so they are 
still a first-mover in the space. FYI, until 2018, guide licenses were 
notoriously hard to get and resulted in guide rates well beyond the 
pockets of most foreign tourists (typically JPY60,000~JPY70,000 per day).

The challenges Huber faces in succeeding in the guide matching business 
are also significant. The first is that there is a basic shortage of the 
types of guides that Huber wants to recruit - being bilingual university 
students. Japanese students have famously lost interest in learning 
foreign languages and also in working during their free time, and so 
Huber will be challenged to find even a thousand individuals interested 
in showing foreigners around. They might have better luck with Chinese 
and Korean students, but those kids are already well tapped and employed 
by the likes of CTrip and China-related travel companies, and I don't 
see Huber having better marketing than these online powerhouses.

Huber also faces challengers from a host of competitors. Such as a large 
NPO guide confederation which is providing free tour guide services 
around the country. The electronics giant, NEC, seems to be one of the 
sponsors behind this initiative, and you can find the website here:


As you can see, the guides are typically students in the area, or older 
retired folks who want to keep themselves active. It's going to be 
difficult for Huber to offer a paid service that is significantly better 
than these free NPOs, or cheaper than the commercial operators who will 
happily sell you an unlicensed but much more experienced guide for 

Another competitor for basic resources will be the Tokyo Olympics, which 
is recruiting up to 80,000 volunteers, starting September 26th. That's a 
lot of people being pulled into a 2-year project, and I seriously doubt 
there will be many bilinguals left over in the Kanto region to provide 
scalability for a guide service like Huber. OK, sure, the Olympics are 
mostly about Tokyo and Yokohama, but this also happens to be where about 
50% of all foreign tourists land as well.

Then there are the likes of Airbnb, Rakuten, Travelience (with their 
TripleLights guide service), HIS and all the conventional travel 
giants... all these companies offer guides in one shape or another. Some 
package the guides with defined activities, to become experiences - a 
great way to gather multiple travelers into a group so as to reduce the 
per person pricing, and some are just straight-out competitors. My guess 
is that as Huber gains more exposure for their service, other "student 
rentals" companies will pop up overnight. The barrier to entry is almost 

What is more likely to be a major challenge is the same thing that 
bedevils all "share economy" type businesses in Japan - and that's 
negative news. Readers will remember when we reported an accidental 
death of a Chinese child at an illegal Airbnb apartment on the 12th 
floor of a Tokyo high rise. I personally thought that the opprobrium 
stemming from that incident would get Airbnb closed down for good, which 
didn't happen, although it could have been a contributing factor for how 
they were partially closed down through regulatory maneuvering a couple 
of years later.

I believe the same risks exist for Huber and their business model. Some 
tourists coming in to Japan for the first time may have misguided ideas 
from Japanese manga/anime about Japanese sexuality and what's acceptable 
behavior here. Huber's website appears to target female and male 
students equally in terms of recruiting, and I have no doubt that some 
of them will experience unwanted attention or worse from some of their 
customers. Indeed, Huber itself seems to be aware of this risk, by 
offering a "team-of-guides" format, where a guide can team with a friend 
for activities such as "casual and deep experience like hanging around 
with friends". (Huber's own web copy).

Whatever the circumstances, the first time you see a press report of a 
Huber female student guide being hurt by a foreign male customer, you 
can be sure that Huber will receive "guidance" to change its business 
model. In fact, in my opinion, this risk factor is so high, I'm really 
surprised that ANA didn't take it into account when making the 
investment. But then, all share-economy business models create similar 
exposure, and in the end it boils down to whether you're able to take 
care of yourself when physically threatened (most Japanese kids don't 
learn this skill), and if you're feeling lucky or not. Hopefully most of 
Japan's visitors using the Huber service are just as naive and trusting 
as its local recruits are.

...The information janitors/


--------- Japan Travel Corporate Travel Services ----------

Japan Travel's Type-2 licensed travel agency business is one Japan's few 
independent foreign-owned inbound DMCs. One of our specialties is 
looking after corporate groups of 10-300 people. To date we have 
assisted in the successful holding of training events, incentive travel, 
conferences, off-sites, and team bonding programs. We have looked after 
the full gamut of services, such as: international air travel, hotels, 
local travel, event logistics and venues, entertainment, 
micro-management of dietary needs, and special needs customers.

We are highly motivated and are happy to work in a variety of roles 
tailored to suit your needs: as a full-fledged corporate travel agency 
partner, as a logistics partner for a particular issue, or as a source 
of innovative experiences and venues. Looking after hard-to-please 
high-tech groups is our specialty!

For corporate travel assistance, contact us at: tours at japantravel.com.
Or visit our pages at: http://japantravel.co.jp/en/about/travel-agency/


SUBSCRIBERS: 6,094 members as of Sep 16, 2018 (We purge our list regularly.)


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

HELP: E-mail Terrie-request at mailman.japaninc.com with the word 'help' in 
the subject or body (don't include the quotes), and you will get back a
message with instructions.

Send letters (Feedback, Inquiries & Information) to the editor to 
terrie.lloyd at japaninc.com.

For more information on advertising in this newsletter, contact 
ads at japaninc.com.

Get Terrie's Take by giving your name and email address at 
http://www.japaninc.com/newsletters/free_sign_up, or go straight to
Mailman at: http://mailman.japaninc.com/mailman/listinfo/terrie

http://www.japaninc.com/terries_take or, 

Copyright 2018 Japan Inc. Communications Inc.

----------------- Japan Inc opens up Japan ----------------

J at pan Inc authoritatively chronicles business trends in Japan. Each 
posting brings you in-depth analysis of business, people and technology
in the world's third largest economy.

Visit www.japaninc.com for the best business insight on Japan available.

More information about the Terrie mailing list