Japan looks beyond tourism's 'Golden Route': Rising yen slows nation's progress toward target of 10 million tourists a year by 2010

Nov 23, 2008 (Japan Times - McClatchy-Tribune Information Services via COMTEX) -- LEH | Quote | Chart | News | PowerRating -- In 2001, soon after the Sept. 11, 2001, terrorist attacks on the U.S., a friend working at a Tokyo travel agency griped about how terrorism affected his business, saying that tourism, after all, is a "peace industry."

The current slowdown in tourism worldwide shows that the industry is also extremely sensitive to the whims of the economy, particularly the currency markets. Yet it is an industry that Japan is increasingly turning to, to create jobs and to revitalize rural cities and towns.

The turning point for Japan's inbound tourism came in 2003, when the central government launched the Visit Japan Campaign, aiming to boost the number of incoming foreign visitors to 10 million per year by 2010 and 20 million by 2020. The Oct. 1 launch of the Japan Tourism Agency is another sign that Japan, whose outbound tourists have consistently outnumbered those coming in, is finally getting serious about inbound tourism.

Until recently, the campaign seemed to be working. The number of foreign travelers steadily increased from 5.2 million in 2003 to 8.3 million in 2007. Of the visitors in 2007, South Koreans comprised the biggest group, accounting for 31.2 percent of all inbound travel, followed by Taiwanese (16.6 percent), Chinese (11.3 percent) and Americans (9.8 percent). Altogether, visitors from the rest of Asia made up nearly three quarters of all arrivals, while North Americans accounted for 12.2 percent and Europeans 10.5 percent.

Then came the U.S. subprime housing-loan crisis, the sharp appreciation of the yen against other major currencies, and the Lehman Brothers shock. As with many industries around the world, Japan's tourism has been hit hard. In August, foreign arrivals dropped 2 percent from the same month last year to 742,100, marking the first time in 30 months that, on a month-to-month basis, the figures fell compared to the previous year's figure, according to the Japan National Tourist Organization. September arrivals dropped further to 641,500, casting a cloud of uncertainty over the future of the industry.

But unlike in other crises, tourism has not suffered from a drop in people's "desire to travel," says the United Nations World Tourism Organization, which tracks tourism trends worldwide. "Unlike previous crises such as 9/11 and SARS, the current downturn does not affect the desire to travel," the UNWTO said in a statement released Nov. 10. "The major concern is about whether one can afford to travel, or whether one wants to spend money on travel given the uncertain economic situation."

So the more pertinent question for Japan right now might be whether it is doing enough to serve those who, despite the circumstances, have decided to come here. Tomohiro Fukuda, team manager of the tour-planning team at JTB Sunrise Tours, which has offered tours to English-speaking travelers for 40 years, says for the industry to grow, operators would have to expand travel options to areas outside the "Golden Route."

The Golden Route refers to a five- or six-day tour of Japan, and it has long been the most popular travel option for first-time visitors arriving at Narita airport; tourists first go to Tokyo, then Hakone, Kyoto and Nara, before flying out from Osaka.

"It is believed to be the most efficient tour of Japan, and it has been around for 30 years," Fukuda says. The Golden Route explains why Tokyo and Osaka have remained the top destinations for Japan visitors for a long time. But as the volume of tourism into Japan has increased, styles of travel, as well as needs and wants of travelers, are diversifying.

Hokkaido, for example, has recently emerged as a popular destination for Asian travelers, especially Taiwanese. In fact, Taiwanese accounted for nearly half of the 1.8 million nights that foreigners spent in Hokkaido in 2007. South Koreans, on the other hand, logged 1.1 million overnight night stays across the Kyushu region in 2007, more than half of all stays by foreigners.

Sunrise Tours, which has captured more than 95 percent of the domestic tour market, plans to introduce new tours next year, trying to bring more people to less-explored regions such as Tohoku and Kyushu, Fukuda says.

Another new trend is that shorter, one-stop visits are on the rise, especially among South Korean visitors, who fly directly to regional airports to play golf, Fukuda says, noting that prefectures such as Yamagata and Fukushima have benefited from such demand.

In addition, experience-based tours have grown in recent years, and they now offer such options as making sushi, sharing a meal with professional sumo wrestlers, and dressing up in kimono.

Japan has a lot to improve to meet such diversifying needs. For one, the government must improve the nation's infrastructure to make rural areas more accessible to foreigners, says Takeshi Komiya, senior director of H.I.S. Experience Japan Co., which began offering experience-based tours in April 2007.

"In Tokyo, there might be signage in English, Chinese and Korean, but if you go into the regional areas, there is none," Komiya said. "That's not good for foreign visitors. And there is a limit to how much private enterprise can do to assist in this. It is not our job to improve infrastructure."

What else can be improved? The Japan Times' Timeout reporters recently spent a day gathering intelligence from both domestic tourism-industry operators and foreign merchants who have a stake in tourism to Japan. This opportunity arose at Yokoso Japan! Travel Mart, a travel trade show held in Yokohama. The semiannual event -- this time attended by 285 foreign representatives as well as 400 marketers from Japan -- was a microcosm for the latest tourism scene. The Pacifico Yokohama convention center, where the two-day event was held, bustled with energy as a European agent quizzed Kyushu tourism promoters on trekking routes and inn owners clad in traditional happi coats from the Chubu region talked up the area's attractions to South Korean tour operators.

It is the passions and ideas of these people that can make a difference for tourism in these hard times -- and help to make Japan a more memorable and rewarding place for people to visit.

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