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, Sep 04, 2016, Issue No. 863

SUBSCRIBE to, UNSUBSCRIBE from Terrie’s Take at:
http://mailman.japaninc.com/mailman/listinfo/terrie

+++ Dabbling in the Medical Inbound Tourism Sector

Over the last few weeks, Japan Travel has been approached by many
Japanese companies who are finally waking up to the fact that inbound
tourists could make them some money. As usual with Japanese businesses
it takes a while for a new trend to register then suddenly you get a
herd instinct effect, where everyone gets the same message at the same
time. Is this a function of the media? Possibly, since they are full of
inbound articles every day. But more likely it’s a function of the
annual fiscal cycle.

By this we mean that 2014 was the first fiscal year that Japan woke up
to the idea that it would be hosting the 2020 Olympics, and the
unfolding tourism boom become tangible. Then 2015 was the fiscal year
that many larger B2C companies started appointing managers to focus on
inbound tourists. Next, the current year of fiscal 2016 is the year that
those managers have received some exploratory budget and now they are
trying different avenues and opportunities. Following that, 2017 will be
the year that competition and the ad spend will start to increase.

About a year or so behind the B2C companies are the B2B2C companies, who
are following a similar schedule, and then a further year or so behind
them are the pure B2B companies – who will try to sell the other two
with better/cheaper systems. So a whole ecosystem is starting to spring
up around inbound tourism. This means lots of buzz, lots of meetings,
and chances to forge early alliances and customer relationships.

As a good example, about four weeks ago we were approached by a B2B2C
Systems Integration company that wants to get into the medical tourism
market. They support medical devices and are now trying to connect that
piece of business with the inbound tourism phenomenon. While this may
seem a bit of a stretch, the opportunities in the inbound medical
tourism market are actually very compelling, and I’m sure their
competitors won’t be far behind.

To make the leap between the sectors, the company has to firstly
reinvent part of their business to deal with individuals versus
businesses, then secondly they need to do a Proof of Concept (POC) to
get long-term Board buy in (and investment). So to get that POC kicked
off, the Manager selected to be in charge of Inbound strategy started
last year to lay the foundations of the new business he is conceiving by
busily visiting likely collaborators. This year, he is working on the
other side of the equation, sourcing suppliers like us.

[Continued below…]

———— Cycling Tours Trial Run in 2016 ————–

In a follow up to our ad in TT861 last month, we are calling on any
readers who would like to participate in our special discounted “guinea
pig” cycling tours to contact us with expressions of interest. We have
decided to change the departure dates and base them on demand, although
October is still a likely candidate for one or both.

Tour One: This 6-day, 5-night tour by road bike takes you from Hiroshima
to Shikoku via the Shimanamikaido bridges, then back to Hiroshima via
ferry and backroads. Highlights of the tour will be the bridges, which
are spectacular, quaint fishing villages on each of the islands, low
traffic and great road surfaces, and of course lots of coastal scenery.
Japan Travel can assist with transfers to get to Hiroshima. Group size
will be 5-15, and the fitness level needed is “medium”, which for us
means that you ride less than 100km a week normally and can do about
60km-80km per day of sustained flat country riding or 40km-60km per day
of medium-level (10% grades or less) hill climbing. Hotels will be
3-star and minshuku. Price will be approximately JPY150,000 plus airfares.

Tour Two: This 5-day, 4-night tour by road bike takes you from Nikko in
Tochigi to Inawashiroko in Fukushima, via countryside areas south of
Aizu Wakamatsu, Ouchijuku and Lake Tenei. Highlights of the tour will be
the turning leaves, country backroads, spectacular coastal riding around
Inawashiro Lake, and onsen. Japan Travel can assist with transfers to
get to Nikko. Group size will be 5-15, and the fitness level needed is
medium-to-difficult, meaning you ride less than 100km a week normally
and can do about 80km-100km per day of sustained flat country riding or
50km-70km per day of medium-level (10% grades or less) hill climbing.
Hotels will be 3-star and minshuku. Price will be approximately JPY135,000.

Special Note: A requirement of both trial tours is that you bring your
own bike (easily done since most airlines offer sports equipment luggage
discounts), and the group will not be using a support car. Otherwise the
itinerary and scenery will be much the same as the commercial version
next year. Minimum number of riders will be 5. A decision to go ahead
with either tour will be made mid-September.

If you are interested in joining either group, please contact us at:
tours@japantravel.com.
———————————————————–

As mentioned, the SI company’s plan is typically Japanese in that they
are creating a consortium of interested parties. This is complicated,
and involves lots of face-to-face meetings, but doing so has ensured
that they have trust-relationships well in place long before their
competitors do. The consortium will involve hospitals to provide the
base services, local authorities who want to promote medical tourism to
fund the POC, and also travel agents to create and sell value-added
packages – and that’s where we come in.

Their target, which is not hard to imagine, is mostly Chinese medical
tourists who don’t trust their own medical system. Our role is to
provide some “value-add” so that customers are not just comparing
hospital fees – namely, we will be tasked with developing tourism
packages located in the vicinity of the hospital, for the patients and
any accompanying relatives. I imagine these packages will include food,
special transport (for invalids), and order-in entertainment. We’ll have
to create some of these from scratch, with English and Chinese support,
which will be interesting.

I believe that the inbound medical tourism business will expand in the
future to include people looking for surgery, but right now most of the
action seems to be high-level exhaustive medical check-outs, otherwise
known as “Ningen Doku”. I have heard a number of stories from around the
country of wealthy Chinese coming in with their whole family and paying
for a full check up taking around 3 days. These checkups are incredibly
complete and can cost between JPY400K to JPY1.2MM per person each, so
they are profitable for the hospitals. Then of course there is all the
traveling and spending that happens in association with each visit. An
important point to note is that Japan’s regional hospitals are almost
uniformly good at doing these health check regimes, and so visitors can
go to picturesque places you normally wouldn’t associate with medical
tourism – like Asahikawa, Hokkaido (I heard JPY900K is the going rate
there), for example.

So will medical tourism grow to be a big business? That’s a good
question. There are supposed to be about 1.3m US dollar millionaires in
China now and that is expected to hit 2.3m by 2020. Not only do many of
these people not trust their own medical system, in addition if they are
diagnosed with something they’d rather it didn’t reach public ears and
damage their stock prices. Then of course there are actual follow up
surgeries and other treatments needed. Given that Japan is only 1.5-2.5
hours away for most of these people, and given that gourmet and
sightseeing side trips are easily bundled with blood tests and MRIs
(which are both are said to be cheaper in Japan than Shanghai for the
same professional level), then we imagine such trips here will soar.
That said, visas and political climate will be the modifiers.

From a numbers perspective, we imagine that over the next 3-5 years up
to 1% (my guess) of wealthy Chinese could be motivated to come to Tokyo
for checks and eventually operations. There are about 7,474 general
hospitals in Japan, and so broken down, this means an average 174
patients per hospital spending about JPY70m (JPY400K each), or a
national Ningen Doku income of JPY520bn in total – so these are not
numbers to be sneezed over.

That said, the law of economics will also quickly come into play: i.e.,
where there is demand, there will be supply, and where there is
excessive supply, there will be price drops. So I expect then that the
inbound medical tourism market, after a strong increase initially, will
run into the same issues that the other tourism segments, such as
cosmetics, have fallen into over the last 3 years, and that even as
overall numbers grow there will be a downwards push on value. But
remember, given that China’s millionaire population will almost double
in the next four years, and that there are 100 times more upper-middle
class consumers who can afford these services, the potential is really
quite huge.

Yeah, so this is an interesting prospect for us, and just another
reminder that the Japanese inbound travel market is rich with
opportunity and still many spaces to be a first mover in.

…The information janitors/

———————————————————–

—————– Partial Office for Sub-let ————–

Modern open-plan office used for incubating small international/start-up
companies has a recently vacated space for a group of 3-5 people.
Located just 200m from Roppongi Hills. JPY275,000 including furniture
(desks and chairs), or JPY250,000 if you bring your own. Internet
included on common connection. Separate charges for utilities, phones.
Minimum 6-month contract. Deposit required. We can also supply bilingual
(English-Japanese) back office services, such as HR and accounting,
business mentoring, technology outsourcing, and other assistance as
required.

For inquiries, contact terrie@lincmedia.co.jp
———————————————————–

—————- ICA Event – September 9th —————-

Title: “Tokyo Bay Cruise ICA Summer Networking”
Details: Complete event details at
http://www.icajapan.jp/event-registration/?ee=46
Venue: Tokyo Takeshiba Terminal http://www.nouryousen.jp/cruise.html

Date: September 9th (Friday)
Cost*: ¥3,000 ICA members; ¥4,000 non-members. Special offer on the
night. Join the ICA for ¥5,000, a 50% discount, and you will be admitted
at the members rate! Note: You must be at Tokyo Bay – Takeshiba Terminal
by 6:35pm as the ship sets sail at 7:00pm sharp. Meeting point is at the
Big Ship Mast at the front and if on arrival you are unable to find this
location then please call 080-4169-9660 ASAP.

RSVP: Tickets will be limited and you must register with the ICA by
September 2nd by 5pm.
———————————————————–
***********************************************************
END

SUBSCRIBERS: 6,677 members as of Sep 04, 2016 (We purge our list regularly.)

+++ ABOUT US

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

HELP: E-mail Terrie-request@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.

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

ADVERTISING INFORMATION
For more information on advertising in this newsletter, contact
ads@japaninc.com.

SUBSCRIBE
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

BACK ISSUES
http://www.japaninc.com/terries_take or,
http://mailman.japaninc.com/pipermail/terrie/

Copyright 2016 Japan Inc. Communications Inc.

—————– Japan Inc opens up Japan —————-

J@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.
———————————————————–

_______________________________________________
Terrie mailing list
Terrie@mailman.japaninc.com
http://mailman.japaninc.com/mailman/listinfo/terrie