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The Honolulu Advertiser

Posted on: Sunday, December 28, 2003

JAPAN
State intent on boosting visitor count from Japan

By Adrian Mangiboyat Jr.
Special to The Advertiser

Japan visitors sought

Hawai'i hopes to lure more visitors from Japan, which has been slowly digging itself out from one of the longest-running recessions in its history.

Associated Press

As Hawai'i heads into the new year, many are keeping a close watch on Japan and its still-struggling economy.

With Japanese making up almost 20 percent of the state's visitors and their spending 17 percent of all tourist dollars, Hawai'i is inextricably tied to conditions in Japan.

Japan's investments in the Islands have also dwindled, with major sell-offs that have reduced its role in Hawai'i real estate. Still, the Japanese remain key investors in commercial and hotel properties and high-end neighborhoods.

Japan has been slowly digging itself out from one of the longest-lived recessions in its history. Travel after the Sept. 11 terrorist attacks plummeted. That was followed by the Iraq war and the SARS outbreak. Japanese travelers who are inclined to stay close to home in times of global trouble kept away from Hawai'i in droves.

It's just been in the past six months that they have slowly returned, with visitor arrivals from Japan preliminarily posting a 1.9 percent increase in November from the prior year — not cause for wild rejoicing, but still an improvement over the nearly 40 percent drop seen in May.

The continuing softness in the numbers is placing renewed importance on the Islands' visitor marketing.

Change in marketer

Beginning in January, international tourism promotions will move out of the hands of the state's long-time tourism promotion agency, the Hawai'i Visitors and Convention Bureau.

Dentsu Inc., Japan's largest advertising and public relations firm, steps in to market the state in Japan under a four-year contract with the Hawai'i Tourism Authority.

A newcomer to the travel industry, Dentsu will have to prove itself as an effective successor to HVCB, which closed its office doors in Tokyo on Friday. The shuttering of the office, which opened in 1969, ends HVCB's legacy as the longest-running foreign visitors bureau in the country.

Some see Dentsu as bringing new ideas to the table of tourism marketing, helping to put a fresh new face on Hawai'i's brand image. Others see Dentsu struggling through a long learning curve before it can get down to business.

Major Asia competition

The timing of the marketing effort is critical. Hawai'i is up against stiff competition from Asian countries hoping to rebound from the downturn in Japan traffic following SARS and Iraq war.

Asian destinations such as Thailand, China, Bali, South Korea and Hong Kong launched an aggressive, multimillion-dollar campaign in Japan in mid-2003 that runs into the next year offering deeply discounted travel packages.

China, which saw arrivals from Japan plunge by as much as 78 percent in May, has seen a recovery to near pre-SARS levels in October. It expects to top the 2 million visitor mark by the end of 2003, a figure Hawai'i has not seen since 1998.

China's introduction in September of visa-free travel for Japanese visitors helped speed its recovery.

"The attractiveness of Hawai'i has become less. Not many people think of Hawai'i as their first choice to visit," explained Hisanori Otsuka, vice president of the Jalpak Hawai'i department.

And factors like a decline in flights to Hawai'i because of cuts by major airlines including Northwest Airlines and the JAL Group, could spell even fewer visitors, said Masato Takamatsu, vice president of marketing at Japan Marketing.

With the ratio of repeat travelers from Japan higher than that of first-time vacationers, Hawai'i could find it hard to boost Japanese arrivals in a down year such as 2003.

"If the total volume of arrivals is growing, the increased share of repeat visitors is a wonderful sign," Takamatsu explained, "but when the market is on a decline, the increased share of repeat visitors means a rapid drop of first-time visitors."

The challenge for Hawai'i has become clear: "Unless Hawai'i succeeds in capturing more first-time travelers over the next few years, it will also lose the repeat market in the long run," he said.

Enhancing the experience

The Hawai'i Tourism Authority had been working closely with HVCB in an attempt to reverse the decline in first-time visitors from Japan, including funding programs that focus on Hawai'i's culture.

For the most part, the Japanese travel industry supports the authority's efforts but still believes there is much room for improvement.

Makoto Fukada, managing director of International Sales, Planning and Marketing at JAL Sales, said more emphasis should be placed on marketing the "real Hawai'i, its true attractiveness. "

"Hawai'i is the locomotive of tourism demand in the Japanese market as it is ranked among the top of all destinations among Japanese," he said.

From next year, Hawai'i promotions in Japan will venture beyond the popular image of shopping, dining and sunning to concentrate on history, art, music, culture and eco-tourism, according to Dentsu's marketing plans.

There is good reason for that, said Takamatsu. "When you consider the trends of duty-free item shopping, particularly premium brand products overseas, it is important to take note that Japanese consumers can more easily purchase their favorite brands in Japan," he said, making shopping abroad less of a draw.

Still Hawai'i continues to rank second in the world after Italy in the amount of Japanese yen spent overseas, much of which is spent on name-brand products.

The changing interest in luxury brand shopping may be an opportunity for Hawai'i to tap into a gold mine: its unique local products, said Takahisa Yuge, marketing director of Globetrotter Guidebook.

"It isn't that travelers are no longer interested in brand goods but that they have discovered the value of shopping at big-box stores such as Longs Drugs and Kmart that offer everyday goods at great prices not available in Japan," he explained. On the other hand, products such as Hawaiian quilts, koa furniture and Hawaiian salt products can only be found in the Islands.

Groups show promise

Growth in two Japanese visitor sector staples — family travel and wedding couples — is questionable due to security concerns, industry officials say.

Instead, Hawai'i's main hope in luring new travelers appears to be among senior travelers and women in their 30s.

The two demographic groups were showing the biggest increases in arrivals abroad before the onset of SARS and the war on Iraq. And they are the most resilient of markets, having quickly resumed their travel habits after Sept. 11 and the war, according to the Japan Association of Travel Agents and JTB Foundation.

Tokyo-based Adrian Mangiboyat is editor of Travel Journal International online. Advertiser staff writer Kelly Yamanouchi contributed to this report.