Thomas White Global Investing
Japan Stamp
July 29, 2011
A Postcard from the Asia Pacific
Japan: Looks to China to rouse foreign tourism

Tokyo’s Asakusa tourist area

Offering Japan’s foreign tourism industry support might also be beneficial for China. While China’s white collar workers enjoy shopping for quality Japanese electronic goods, China benefits from enhancing its brand on the global stage.

Japan, perhaps the world’s most resilient survivor, has had to deal with several natural and manmade catastrophes, most notably the devastation during World War II. This March, a monstrous earthquake hit the country’s north-east coast and triggered a tsunami and a nuclear radiation crisis, forcing Japan to summon up once again its heritage of valor and determination. And just as all eyes were riveted on the Japanese women’s soccer team’s near-impossible World Cup victory over the U.S., the world is once again rooting for this comeback kid.

While other industries were also hit by the trio of disasters, the aftermath tainted Japan’s global tourism image. If flight and hotel cancellations were anything to go by, the traveling public’s perception of Japan has been quite pessimistic.

According to Japan National Tourism Organization (JNTO) statistics, the number of foreign visitors to Japan plummeted by over 62% year-over-year this April. What’s more, the number of visitors pouring into Japan from its top tourism markets of China, South Korea and Taiwan declined between 49% and 67% for April. Japan has realized that it not only needs to change a global opinion, but the country needs to rouse its tourist base as well. And that means getting the flow of tourists back from China.

In April, only 76,164 Chinese travelers visited Japan; almost half the number that visited in the same month last year according to JNTO statistics. Despite the slump in April, Chinese travelers accounted for over 25% of inbound foreign travelers to Japan. The decline in the number of visiting Chinese has narrowed from April, but has a long way to go to reach the 7.6% growth level that was seen in January 2011.

The World Travel and Tourism Council (WTTC), which had earlier expected Japan’s travel and tourism industry to directly contribute around $134.9 billion, or 2.2%, to total GDP in 2011, anticipates that this figure will now plunge by between $11.6 billion and $24.4 billion. Although foreign tourism amounts to a mere 6% of the tourism industry’s GDP contribution, it was a growing component prior to the 2011 disaster.

With this, officials from both China and Japan are joining hands to inspire more Chinese travelers to visit their neighbor and rebuild Japan’s struggling foreign tourism industry. Only last week, China’s Vice Premier Wang Qishan met a Japanese delegation to promote friendship between the two countries, stressing that China is keen on working towards strengthening Sino-Japanese communication and ties in all areas of tourism. China’s National Tourism Administration chief, Shao Qiwei, has also made efforts to revive Chinese tourism to Japan, including setting up a Sino-Japanese joint venture travel agency in China, and restarting group tours to Japan. In May, through the Pacific Asia Travel Association (PATA), China agreed to work with Korea to help Japan’s tourism industry recover by developing ‘golden tour routes’ that link the three countries.

China, of course, has had its own share of natural disasters recently, and no doubt is keen to return the kindness extended by its neighbor. Three years ago, Japan had sent rescue teams and made donations to aid China’s recovery from the Sichuan earthquake. According to a commentary posted by Chinese Xinhuanet news service on its website, “the virtue of returning the favor after receiving one runs in the bloods of both nations.”

Offering Japan’s foreign tourism industry support might also be beneficial for China. The world’s second-largest economy has been trying to enhance its stature on the global stage. Giving conciliatory support to Japan, with whom its ties have been stormy, might add to the China ‘brand’ and further improve the country’s soft power.

Along with other measures, including a relaxation of Japanese visa requirements for Chinese citizens, Japan’s electronic goods market could boost inbound tourism from China. Since last year, young Chinese white collar workers have increasingly traveled to Japan to do their shopping. According to the website, the number of counterfeit products in the Chinese market compared to the good quality of Japanese products could be reasons behind this trend.

Meanwhile, campaigns and events across the globe have united people and whole nations to revive Japan’s foreign tourism industry. Singapore’s Changi Airport has launched a campaign called ‘Enchanting Japan’ to promote foreign tourism to the disaster-struck country. Pop singers from Justin Bieber to Lady Gaga have given concerts to showcase their support for the cause. South Indian film star, Rajnikanth, who is the only Indian actor with a large fan base in Japan, said he will visit Japan as part of his efforts to help the country.

And from these efforts come a glimmer of hope. According to China Eastern Airlines, over 150 travel groups were scheduled to visit Japan from China between late June and mid-July. The airline, which was quoted by Chinese online news service, Xinhuanet, added that this number equaled 60% of the travelers who visited Japan during the same period last year.

Having earned widespread respect through its never-say-die spirit, Japan has swayed emotions worldwide. With its legendary resilience and the global aid, Japan’s foreign tourism industry might just be on its way to block tackle* obstacles and emerge victorious, just like its celebrated women’s soccer team.

* A soccer term meaning ‘strong frontal attack’

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