New frontier: The way forward for tourism

The COVID-19 pandemic couldn’t have come at a worse time for Japan’s tourism industry.

The nation was anticipating an influx of big-spending foreign travelers to the 2020 Summer Olympics in Tokyo. The quadrennial sporting extravaganza was postponed for a year, however, and is now slated to be held in July without any of the estimated 1 million overseas spectators in attendance.

Meanwhile, domestic travel has been hammered by wave after wave of virus infections that have led to a third state of emergency and a slew of restrictive measures adopted by a growing number of cities and prefectures, dealing crushing blows to hotels and travel agencies as well as air and ground transportation operators.

Now, with the country scrambling to tame a fierce fourth wave with new strains that are more contagious and a slow vaccine rollout that is likely to delay the recovery of the economy for years, the sector — considered to be a pillar of the government’s growth strategy — is wondering when it can see the light at the end of the tunnel. And when it does, what will the post-pandemic tourism landscape look like?

“Markets and consumption habits are disrupted in times of crises, but in the long term most of those changes are temporary,” says Hiroshi Kurosu, a research fellow at JTB Tourism Research and Consulting.

“On the other hand, there are trends triggered by a crisis that become mainstream, although in most of those cases the groundwork has been laid before the cataclysmic event,” he says.

Hiroshi Kurosu, a research fellow at JTB’s Tourism Research and Consulting, says that markets and consumption habits are typically disrupted in times of crises, but most of these changes are temporary. | COURTESY OF JTB TOURISM RESEARCH AND CONSULTING

Micro-tourism, outdoor or adventure tourism, workations and sustainable tourism are among the buzzwords that have appeared over the past year as new travel trends emerge in an era of social distancing.

Whether some or all of these forms of travel will stick with consumers in the years to come is too early to tell, Kurosu says, but the key for Japan to thrive in an increasingly competitive global market is to enhance the quality of its hospitality to increase customer spending and satisfaction.

“In that sense, micro-tourism has the potential to transform the mindset of both travelers and the destinations that accept them, although it’s unclear whether the concept will take a firm hold after the pandemic,” he says.

With long-distance travel frowned upon, a growing number of hoteliers and municipalities have been calling for residents to seek out accommodations and tourist attractions only one or two hours away from their homes as a means to energize local economies while minimizing virus contagion risks.

Hoshino Resorts Co. CEO Yoshiharu Hoshino, for example, has been a leading proponent of micro-tourism, or staycations. In the absence of inbound travelers, the head of one of Japan’s largest and most well-known operators of luxury hotels and ryokan (traditional inns) argues that now is the time to focus on domestic tourists, who spent a combined total of ¥22 trillion in 2019. That’s compared to ¥4.8 trillion spent by inbound foreign travelers in the same year, according to the Japan Tourism Agency.

Some statistics show the idea is catching on. According to the Tohoku District Transport Bureau, the number of residents from the the northern Tohoku region that sought accommodations within the region’s six prefectures — Akita, Aomori, Fukushima, Iwate, Miyagi and Yamagata — grew 11.1% between July and December last year compared to the same period the previous year.

That was likely the result of a combination of promotional campaigns espousing the virtue of rediscovering the many regional charms Japan has to offer and the government-sponsored Go To Travel campaign that subsidies up to 50% of domestic travel costs. The program aiming to address the economic fallout from the pandemic has since been suspended, however, after virus cases soared.

Akira Ide, an associate professor at Kanazawa University in Ishikawa Prefecture and an expert on tourism, voices doubt as to whether micro-tourism can appeal to consumers in the long run.

“Since the onset of the pandemic I’ve sought out tourist sites in and around the prefecture I live in, but I often felt visiting these places once was enough,” Ide says. “And they’re not necessarily cheap either — I can imagine people opting to go to Disneyland or better-known attractions rather than dropping money at relatively obscure destinations close to home.”

Akira Ide, an associate professor at Kanazawa University, doubts whether micro-tourism can appeal to consumers in the long run. | COURTESY OF AKIRA IDE

Ide says the success of the concept depends on whether such sites and accommodations can draw repeat visitors, a prospect that would require the coordinated efforts of both municipalities and local hospitality hosts.

“Micro-tourism may fit the business model of high-end hotel operators such as Hoshino Resorts that can target wealthier customers who currently aren’t able to vacation overseas,” Ide says. “But that may not be the case for many of the more affordable inns.”

Meanwhile, outdoor recreational activities have been flourishing as people avoid crowded and cramped spaces and seek fresh air.

Camping, for example, has seen a revival these past several years, thanks to the introduction of various new options including solo camping and glamping (glamorous camping), which offers luxury tent stays complete with food and amenities.

Sales of fishing gear are also robust, while the number of those acquiring boating licenses hit a 15-year-high last year as more Japanese take to the waters.

The Yano Research Institute estimates the domestic outdoor business market size in 2020 at ¥489.5 billion. While that’s 94.7% of the size of the previous year, it says the dip is temporary and due to COVID-19, and expects sales to remain strong in the years to come.

“Camping has been in the limelight as a relatively safe pastime, for it takes place ‘outdoors,’ ‘with only family members,’ or ‘without anyone around,’” it said in a report last December. “These keywords are considered to lower risks for infection, and camping is one of the few recreational activities that can achieve these conditions. The demand for camping, therefore, has been on a stable rise even during the pandemic.”

A street near Kiyomizu Temple, a popular tourist attraction in Kyoto, is empty amid the COVID-19 outbreak in July 2020. | REUTERS

The pandemic-battered aviation industry is picking up on the trend. Japan Airlines Co., one of the nation’s two main carriers, and JAL group subsidiary Jalpak Co. announced in March that it signed an agreement with Hokkaido Treasure Island Travel Inc. Together, they plan to produce travel itineraries under JAL’s dynamic package brand featuring the northern island’s abundant nature, culture and cuisine as a means to lure both domestic and inbound tourists when travel restrictions are loosened.

A record-high 31.88 million overseas travelers visited Japan in 2019, although that figure plummeted to 4.11 million last year. The number of domestic flights have also been drastically reduced to curb the spread of COVID-19, crippling airlines.

Under the circumstances, Hiroki Nakashita, assistant manager of JAL’s Planning and Tourism Promotion division, says the company has been collaborating with travel agencies and hotels and ryokan to offer workation packages and rooms offering private hot springs that allow guests plenty of personal space.

The airline “will be offering flexible travel packages that adhere to social distancing guidelines while responding to individual needs such as skiing or cycling,” Nakashita says. Prior to the outbreak, for example, inbound tourists flocked to the so-called golden route, or the nation’s representative tourist destinations such as Tokyo, Kyoto, Osaka and Mount Fuji.

“We’re focused on offering itineraries that avoid crowded areas while introducing tourists to what Japan’s lesser-known cities and regions have to offer,” Nakashita says.

The renewed focus on workations and travel plans off the beaten path came as COVID-19 and remote working brought business travel to a screeching halt, hitting the revenues of airlines, bullet trains, hotels and rental car companies. While reports indicate Japan plans to introduce “vaccine passports” to make it easier for people who have been inoculated against the virus to travel internationally, especially those on business, the scale of the program and when the measure will be implemented remains unclear.

A HafH property in Nagasaki | COURTESY OF HAFH

According to the Global Business Travel Association, despite a relatively strong pre-COVID-19 first quarter of 2020, global spending on business travel is expected to show a 52% decrease for all of 2020 to $694 billion, down from $1.4 trillion in 2019.

“The magnitude of these losses and their impact on travel suppliers is unprecedented: The 2020 business travel spending losses are expected to be 10 times larger than the impact of either 9/11 or the Great Recession of 2008,” it said in a report released in February.

Tasuku Miyahara, the manager of Nakashita’s division, says the situation has led JAL to reduce its focus on business travelers and cater more toward tourists “since demand for business trips may not return to 100% even after the pandemic.”

As business travel falters and teleworking becomes the norm, workations appear to be growing in popularity. The ratio of office workers signing up to HafH, a startup offering monthly fixed-price subscription co-living services with hotels, hostels and guesthouses, grew 12 percentage points to 45% of all users in 2020 year on year.

“COVID-19 essentially accelerated the trend toward remote work by around five years. When the pandemic is over, corporations will face the question of whether to revert back to their old work habits or to adapt to a more sustainable working environment,” says Ryo Osera, co-founder of HafH.

Founded in April 2019, HafH, which stands for “Home away from Home,” currently offers 735 rooms in 36 countries, including those in Taiwan, Germany, India and the United States. Osera says the pandemic has seen the number of new members to the service soar, with an eightfold increase in new subscribers in December compared to the same month the year before.

Ryo Osera, co-founder of HafH, says users of his service aren’t looking for tourist attractions, but are rather drawn toward the idea of immersing themselves in local life.
| COURTESY OF HAFH

“With the pandemic upending our sense of normalcy at home, our users aren’t looking for tourist attractions, but are rather drawn toward the idea of immersing themselves in local life,” Osera says. “For example, joining Okinawan communities for beach sweeps or helping out ranches in Hokkaido. I believe this is a travel trend that we’ll see more of.”

Keiichiro Nakamura, a tourism consultant based in Okinawa, says the crisis is an opportunity to make future travel more sustainable and environmentally friendly.

Prior to the pandemic, the southernmost islands of Japan welcomed around 10 million visitors annually. Of those, around 70% were domestic travelers and 30% were overseas guests mostly coming from Taiwan, South Korea, China and Hong Kong.

“People coming to the islands of Okinawa are drawn to the beautiful ocean and distinct culture, but it’s rare that they are exposed to the issues facing local communities,” he says. For example, around 30 minutes by ferry from the main island of Okinawa sits Kudaka — known as the island of the gods where holy rituals of the Ryukyu Dynasty were performed. While the island is home to only around 150 residents, it welcomes around 60,000 tourists annually.

“Microplastic pollution has been a problem at Kudaka,” Nakamura says. “We’re devising a system where tourists can help clean the island’s beaches and bear a portion of the costs of sending the garbage to incinerators on the main island. By having tourists get involved in providing a solution to these issues, we hope to create loyal customers who can join us in making these islands a better place for both residents and guests.”

So when will travel recover? With emerging new virus variants and delays in vaccine rollouts, the answer can only be guessed at.

“The optimist in me says inbound travelers will gradually return in stages, starting this winter,” says Fumiko Kato, CEO of WAmazing Inc., an online platform for foreign tourists visiting Japan. “But winter is when the virus spreads more effectively, so next spring may be a safer bet.”

Fumiko Kato is CEO of WAmazing Inc., an online platform for foreign tourists visiting Japan. | COURTESY OF WAMAZING

Kato says wealthy tourists from neighboring Asian countries traveling privately or in small groups will likely lead the way, as well as those with special interests such as skiing or watching kabuki. It may take some years for inbound tourism to be restored to pre-pandemic levels, she says, meaning the government’s goal to attract 60 million foreign visitors by 2030 will likely be delayed.

Kato’s startup, which has 330,000 members to date, distributes free SIM cards at 22 international airports in Japan, which tourists can use to access WAmazing’s one-stop app that allows users to book accommodations, buy rail passes and reserve ski lift tickets, among other things.

It also runs its own e-commerce service where tax-free products can be purchased for pick-up at airports before departure. The inbound tourism market has been lucrative until the outbreak.

Spending by the average foreign tourist per visit, for example, came to ¥137,948 in 2019, more than double the ¥60,995 spent by domestic travelers per trip, according to the JTA.

WAmazing’s business took a direct hit from the pandemic, however, as borders closed. To survive, the company got rid of its office and took up translation work and tourism consulting as new revenue streams.

“If there is a silver lining to all this, it’s that we’ve learned to diversify our portfolio to mitigate risk. And by losing our office and working remotely, we can now hire talent from all over Japan,” Kato says. “Similar outbreaks could sweep the world in the future. In that event, we are prepared.”

In line with COVID-19 guidelines, the government is strongly requesting that residents and visitors exercise caution if they choose to visit bars, restaurants, music venues and other public spaces.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.

SUBSCRIBE NOW

PHOTO GALLERY (CLICK TO ENLARGE)