Japan Travel


* * * * * * * * 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, February 01, 2015, Issue No. 790

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+++ JAPAN’S GROUND TRANSPORT OPPORTUNITY

The Japanese inbound travel market until ten years ago was controlled
primarily by Japanese companies who extended what they did for
Japanese locals to include some foreign language staff. But otherwise
there was little effort made to change and make things more appealing
to foreign guests. The internet changed all that, and with the rise of
Online Travel Agents (OTAs) suddenly foreigners are being directed to
places and activities in Japan that are being decided and arranged by
marketers and tour planners based abroad.

This trend to use foreign travel managers has developed to such an
extent that it is thought that about 30% of the inbound market is now
controlled by foreigners from start to finish. This naturally is not
good news to Japanese operators who are finding their traditionally
fat margins being sliced and diced by others, and they know they have
to do something about it. In our opinion, of all the local operators,
really the only one trying to reverse the foreign takeover is JTB. For
all its faults, JTB is at least busy creating offices and partnerships
all over the world and in particular in SE Asia, an investment that
should pay off for them in coming years.

But most of the other operators are in a huge quandary. Their tours
are still bought often enough that for now they don’t need to try too
hard to stay in business, but they also fear the future. Foreign OTAs
and home-country travel agencies are taking away major market share. A
good example is with Chinese tourists, whose tours used to be
coordinated and booked by local Japanese agencies, but where over the
last 3 years more and more reservations and bookings are being made by
the Chinese operator directly with vendors and stores, thus bypassing
Japanese tour companies completely.

Besides the fierce competition, another major problem is lack of
innovation by the local players. Let’s take a trip to see Mount Fuji
— an iconic tour if there ever was one — as an example. Since the
last Tokyo Olympic games in 1964, JTB’s Sunrise tours arm has been
offering daily visits to Mount Fuji and surrounds, currently priced
between JPY7,900 to JPY18,500 depending on what you eat for lunch and
where. Hato Bus does a similar round trip plus lunch for JPY10,000.
Club Tourism does their’s with lunch for about JPY8,000.

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What these tours all have in common besides the fact that they have
had the same itinerary for decades, is that if you deduct the lunch
cost, the actual round trip of 280km or so is sold for just
JPY4,000-JPY5,000 per person. That’s pretty darned cheap, and is
really only possible because they transport hundreds of foreign
visitors a day to the same destination and stop at the same places for
lunch and souvenirs.

But once you get off the beaten track and want to visit, say, Fuji
first then the other part of the World Heritage listing — Miho no
Matsubara beach, you’ll quickly find that not only are there very few
options to get you there, but it’s super expensive too. Well, OK, you
could ride from Fuji 5th station on the bus back to Tokyo, catch the
Shinkansen to Shizuoka, then transfer and catch the Shizuoka Railway
to Shin-Shizuoka, then transfer to a bus to take you to
Hagoromo-no-matsu stop, then walk down to the beach. Yeah, just about
all day to get there and back, with 30 minutes to take some photos of
Fuji in the distance… Probably not.

Or, you could get a cab from Mount Fuji 5th station to the beach
direct. 82km without traffic, and that will set you back at least
JPY50,000 return.

The point we are making here, is that as soon as you want to do
something a bit unusual in Japan that requires traveling outside the
urban centers, as tourists are wont to do, you will quickly find that
it either can’t be done or it’s way expensive — unlike pretty much
every other country in Asia, where cabs and transport in general are
really cheap. That’s frustrating for Asian tourists in particular,
which is unfortunate because they are the ones most likely to repeat
travel here (82% of HK tourists in 2010 were repeat visitors) and
explore outside the main centers.

The www.japantravel.com website has a custom travel request form and
the top request is about ground transport and options. Some recent
examples include:
* A bus for 40-60 passengers from an ocean liner stopping in Osaka for
a day, and wanting a side excursion to Kyoto and several other
locations.
* A way for a group of 16 to get from Takayama to the Light Up
Festival at Shirakawago. Not as obvious as it sounds, as non-residents
are not allowed to bring in buses.
* A luxury hire car for a wealthy couple with lots of bags, from Kyoto
to Ueda, Nagano.
* A luxury SUV from Narita airport to downtown Tokyo. Must be an SUV.

Do all of these sound like they should be easy? Yes, they should be
just a phone call away, in ten different languages. But the shortage
of buses (in 2012 there were 48,135 licenced buses in Japan),
bilingual bus drivers (down 2% in 2013), rules about driving out of
one’s designated area (as a taxi or bus company), and a general lack
of luxury cars other than sedans and one-box wagons, makes all of the
above requests a major effort to solve. And in the end, these
frustrated customers come to www.japantravel.com, hoping we can help
them — usually we can’t. This is not a good situation given that
Japan is going to get to its 20m foreign tourist target based on
repeaters who, as they start gaining confidence traveling here, will
want what they want not someone else’s idea of what they want. Maybe
the government should divert some of its Cool Japan fund into special
loans to help companies invest in more vehicles and better services?
Some transportation red tape cutting would be good, too.

The news is not all bad. I’ll note that here in Tokyo we do have MK
Taxi, which is good at ignoring government guidelines and makes its
cabs cheaper to ride. They do also have a very good service line-up,
but still, even they have no SUVs. In fact, almost no one does —
which seems amazing for a city of 35m people. We suppose this is
because most customers until now have been Japanese, who would be
perfectly happy with a one-box wagon with a nice paint job, or a Crown
sedan. Unfortunately neither of these options are what you could call
luxury vehicles.

What this spells to us is that inter-city ground transport is an
obvious and immediate opportunity for some enterprising entrepreneur,
or, an enterprising (and hungry) foreign firm. For example, I’d have
thought the Gray Line would be all over it, buying out local firms or
expanding its Japan operations. But not so. Right now, they, like
everyone else, seem satisfied with the status quo. So maybe rather
than the bus sector, the first group to move will be rental cars and
rental motorcycles. I’m not seeing a big pick-up in this area yet, but
I have certainly heard of firms budgeting for improvements in their
foreign customer experience — English-langauge car navigation
systems, easier bookings, bilingual road-side service, etc., so maybe
this will change.

In the meantime I suppose we should be grateful that we have unlimited
7-day JR Rail Passes at just JPY29,000 (5-day Europasses are double
this), and LCCs flying all over Japan for less than JPY10,000 a
flight.

Then maybe a Dahon fold-up bicycle and bike bag for the side
excursions? At least our repeat guests will be staying fit! :-)

…The information janitors/

***********************************************************
END

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+++ ABOUT US

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