Japan Travel

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, Nov 29, 2015, Issue No. 830

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+++ Japantravel.com Hits 1,000,000 Unique Users Per Month

I thought it would be timely to update readers on our progress with the
www.japantravel.com business. The site is growing dramatically alongside
the remarkable growth in the inbound travel sector overall. Last month
we had more than 6.9m page views from 1.06m unique users mostly located
in North America, SE Asia, and Europe. We also had 9,132 contributors
producing stories, photos, and videos for us in 11 different languages.

I’m not sure if this makes us the largest inbound travel portal for
Japan yet, in that the incumbent www.japan-guide.com may still be
larger. However, in terms of momentum, we are clearly the growth story
in the sector.

Although a competitor, I can say that Japan Guide is a great site, and
its principals have been extremely diligent in producing useful
information for tourists. Their site is a constant reminder to us that
there are many areas we still need to improve on in terms of structure
and ease-of-use, and, yep, we’re working on that. But what they don’t
have is a massive community of passionate contributors who can cover the
entire length and breadth of the country. No matter where you want to
go, probably we have a story covering that location. As of today, Sunday
Nov 29, 2015, we have 22,384 articles and 110,527 photos up online.
These days a successful vertical portal can’t just be a webpage and a
forum, you need to have deep functionality and a unique edge in
producing content as well.

My original concept for Japantravel.com (or, japantourist.jp as it was
called when the site first started out) was to finance the portal from
advertising revenues. Back in 2011, you could still get JPY200-300 per
thousand impressions, which when combined with writing services should
have produced revenues of JPY3-5m per month, an amount that I felt could
support a small but strong team of community managers, technologists,
and marketers. What I underestimated over that first couple of years,
though, was the impact of the realtime ad bidding networks, which have
killed niche sectors like ours and ad rates in general, as well as the
lack of market depth for inbound travel advertising.

Perhaps the shallow media demand isn’t surprising, as it wasn’t until
Tokyo won the rights to host the 2020 Olympics in September 2013, and
Abe wrestled the yen down by 38% from 2011 prices, that inbound tourism
started to boom. In other words, this boom is just two calendar years
old and in terms of economic cycles it is only one full fiscal year old.
So budgets and preparation by Japanese corporates to invest in the
inbound travel market are just getting kicked off now.

Therefore, I expect the advertising market for inbound travel media to
increase substantially over the next couple of years.

[Continued below…]

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Now that the inbound tourism sector is covered in the Japanese press
every day, you can feel the excitement and anticipation build among
large Japanese companies. From the many meetings that I’ve had over the
last 12 months (about 5-10 a week), I think there will be a 3x surge in
advertising spending from next year, with the monetary amounts cresting
in 2019 and 2020. Certainly I can see Japan’s major advertising
companies gearing up for this — which of course is a happy scenario for us.

But while the future looks somewhat promising, start-up companies don’t
survive on future promises alone. We need revenues to pay today’s bills,
and creating such income out of media has been a challenge. Thus we have
had to track back to the money source, which at present is the travel
services sector itself. There is a flood of foreign inbound travelers
wanting accommodation, transport, interpreting, telecommunications, and
many other services. Almost all of these activities require licenses of
some kind, although in the case of Airbnb-style accommodation,
deregulation is on the way.

Therefore, earlier this year, I resolved to extend Japan Travel to
becoming a travel services planner and provider. For this reason we
applied for a Type II license which was received last week, on November
19th, 2015. There are four types of travel agent licenses, with the most
flexible being a Type I license. The problem is that this level requires
up to a JPY70m “big boy” deposit — so it’s out of our league. Luckily,
the much more reasonably priced Type II licenses allow almost the same
list of services other than being able to create outbound tour packages,
which we don’t do anyway.

Being a travel agent doesn’t mean Japan Travel will somehow merge with
the crowd (that wouldn’t be very entrepreneurial!). Rather, with the
license we will focus on developing interesting niche sectors that are
not well serviced by foreign-facing agencies: from sports and events
travel, to religious and traditional arts tours. Our main target will be
FIT travelers, meaning that our tours will be self-guided and basically
involve online planning, purchasing from multiple options,
pre-registrations, and other core support services. Although we will do
the usual hotels-and-buses arrangements when requested.

As an example, I personally love cycling, so we’re working towards
building a network of collaborating vendors who can help us create
iconic cycling experiences. Our value-add points will be everything from
recruiting country-side onsen that don’t normally take foreigners, to
providing day-ahead luggage delivery, walkie talkie-equipped support
vehicles, spare high-grade bikes and parts, personal medical data and
injury support, a bilingual call-in service, and guides who cycle with
the group. We hope that by having strong logistics and functionality we
will appeal to serious cyclists and make it harder for the copycats to
move in.

A recent collaboration partner is the Reevo company in Fukuoka
(http://reevo.jp), which supplies camper vans all over Japan. There are
already several camper van rental businesses on the web that service
foreigners, but they are small operations in just one or two cities.
Reevo on the other hand offers vehicles in 230+ locations all over the
country, and has a reservations system knitting them all together. Their
only problem is that they are set up to service Japanese travelers, not

With our new deal, Japan Travel will translate Reevo content into
English, using our crowd of several thousand contributor-translators,
then sell their unique rental service and self-guided tours to the
inbound public. While we don’t necessarily need a travel agent license
to create this kind of inventory, it is a grey area and once we include
marketing into the mix it starts to look very much like a tours
business. So I felt it was prudent to get us licensed.

We have similar tie-ups going on with many other Japanese travel
services companies, which will be publicly announced in due course.

Now that Japan Travel is stepping beyond the portal-only business, some
interesting discussions are starting to emerge, and I’m just starting to
realize just how vast the travel sector is. A good case in point is
tourist accommodation. If you’re an inbound group of, say, 20 people or
more, you can’t book a hotel in Kyoto for next April (2016), now. All
available rooms in any volume at a single location are already booked
solid. Therefore, I believe that even though Airbnb-style deregulation
is currently limited to Tokyo and Osaka, chronic accommodation shortages
will mean that it won’t be long before we see a similar revolution
taking place in the outskirts of Kyoto and other iconic destinations
like Nara, Matsumoto, and Sapporo. This of course has the real estate
developers excited, because land and buildings in the hinterland are
still very cheap, and they are all trying to guess where the next
popular destination will be. Hopefully we can play a role in steering
tourist flow to them.

So evolving from just being an inbound travel community portal, Japan
Travel is growing into three distinct businesses: online/mobile
marketing, travel services, and consulting. All three businesses will
significantly leverage the www.japantravel.com portal traffic, either
for sales or research, and so the portal itself will continue as a core
part of our operation. Indeed, we are building Japan-fan contributor
communities all over the world, with special focus in Asia, so that we
can continue to create lots of compelling new content, along with better
software functionality and User Experience (UX), and a full line-up of
competitively-priced travel services.

I admit that pushing into these new areas is a bit nerve wracking (lots
of new stuff to learn), but at the same time by expanding our income
base we are creating more stability and expandability for the future.
I’ll provide more reports on Japan Travel’s development in 2016.


Lastly, there are so many niche business opportunities involving
servicing inbound tourists that if I wasn’t already busy with Japan
Travel, I’d be surveying inbound travelers to see what else they need.
For example, how many travelers come to Japan as a result of a personal
celebration of some kind? A honeymoon, wedding anniversary, exam pass,
coming of age, or business deal maybe? And how many of them celebrate
with flowers, custom cakes, champagne, or high-end wines? Surprisingly,
though, fast daily deliveries to inbound travelers at their hotel or
apartment are not yet commonplace, unless you’re staying in a high-end
hotel where you can call down to the concierge. Rather, if you’re in an
Airbnb location, you have to deal with language challenges and fend for
yourself. That’s why I love talking to strategic-thinking vendors like
Robert Rann’s GrapeOff (www.grapeoff.com). They’re not in the “instant
delivery” business yet, but I would not be surprised if they were to
start such a service (OK, that’s just my personal suggestion). In the
meantime, though, they do have some nice bottles to celebrate with, per
their campaign below… :-)

…The information janitors/


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The market is flooded with low-cost and low-performance wines. If you
are looking for premium quality wines at discounted prices, then come to
Grape Off. We are so sure you will love our wines that we will give you
¥1000 to use towards your first purchase. Introduce a friend to Grape
Off and we’ll throw in an extra ¥2000!

Premium wines at discounted prices! www.grapeoff.com

—————- ICA Event – December 2nd —————–

Title: “Wednesday December 2nd, 2015 – ICA Japan End of Year Bonenkai”

Details: Complete event details at http://www.icajapan.jp/

Date: Wednesday, December 2nd, 2015
Time: 19:30pm to 22:30pm – Doors open. As a set menu it will include
multitude of food including Beers, Wines, Juices, Shochu and Soft Drinks
Cost: 5,500 yen – Open to all. No sign ups at the door!!!!!!! First
registered will secure a place as seats are very limited.
RSVP: By 4pm on Friday 27th November, 2015. Venue is Andy’s Shin
Hinomoto at Yurakucho.



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

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