On Japan tourism, what PATA gets wrong, WTTC sets right

I have great respect for Martin Craigs, the chairman of the Pacific Asia Travel Association, as he and I see eye-to-eye on most issues concerning travel and tourism policies or non-policy by certain g

I have great respect for Martin Craigs, the chairman of the Pacific Asia Travel Association, as he and I see eye-to-eye on most issues concerning travel and tourism policies or non-policy by certain governments. However, I canโ€™t help but question the organizationโ€™s overpraise of Japan as the โ€œstar performerโ€ in garnering the most inbound tourists in its latest tourism figures and not mention the cause.

As well, there was no mention of the disparity of travel among Asians themselves. Why have the Japanese stopped traveling to South Korea, while South Koreans are traveling to Japan in droves? This has caused certain businesses in South Korea to go bankrupt, as bemoaned South Koreans during a session at the World Travel & Tourism Councilโ€™s first regional Asian summit, held in Seoul, South Korea. Unfortunately for them, the Japanese delegation did not give an official answer, just a โ€œpersonalโ€ one.

Based on my recent visit to Tokyo, Japan, for the 2013 edition of Japan Association of Travel Agentsโ€™ TABIHAKU Travel Showcase, I have it on good authority that the Japanese government is โ€œclose to being brokeโ€ financially. As such, there is major ongoing discourse within the Japanese government regarding restructuring its economy and reining in Japan’s huge government debt, which currently exceeds 200% of its GDP. It has been cited that the economic woes are caused by persistent deflation, reliance on exports to drive growth, and an aging and shrinking population. Simply put, the Japanese yen continues to depreciate in value. For tourists visiting Japan, this is great news because they get more bang for their buck. This explains the spike in the number of tourists traveling to Japan.

The picture that PATAโ€™s report painted would have fine and dandy, but because of the weak yen, Japanese have stopped traveling. In doing so, they have put certain destinations that have traditionally been relying on Japanese visitors. Namely, the Republic of Korea. It was claimed by South Koreans at the WTTC event that they are experiencing a double-digit decline in Japanese traffic. Japanโ€™s travel and tourism industry is thriving, but they are simply not returning the favor.

I recently spoke to WTTC chairman and president David Scowsill about the issue and the man ought to be commended for framing the situation correctly. He got right what PATA missed or failed to mention in its October 4, 2013 report. He recognizes that there are still โ€œsome political sensitivitiesโ€ between the two countries, but he does see that it’s not all gloom and doom if the โ€œoperating businesses” such as PATA and JATA got together โ€œto study this kind of problem.โ€

Scowsill agreed: “Whatever is going on at the political level [is separate], the inbound and outbound operations with the airlines and the hotels, they [JATA and PATA] can discuss the practicalities of whatโ€™s going on. What you say is absolutely right, that the Japanese business into Korea has temporarily gone down quite dramatically because of the way the Japanese government is managing the exchange rate. Suddenly, Korea has become very expensive for the Japanese, so they are simply not going there. Now this is probably a temporary situation and that things will rebound themselves over time.โ€

What if South Koreans stopped traveling to Japan in return?
As we all know too well in the world of travel and tourism, reciprocity is very much at play. For instance, when the US decided to impose visa restrictions upon Brazil, Brazil acted in turn and did the very same thing. Thankfully, this was a temporary situation. The issue was resolved recently when the US lifted its visa requirement for Brazilians prompting Brazil to act diplomatically and return the favor.

So, in the spirit of reciprocity, Japan is threading a very dangerous path because, as of right now, the number of South Koreans traveling to Japan has been on the rise. According to the Japan National Tourism Organization’s figures, South Koreans traveling to Japan (as of August 2013) have increased by 32.3 percent compared to last year (from 1,345,376 in 2012 to 1,779,800 in 2013). Therefore, if South Koreans cease traveling to Japan either as a result of the ongoing political tension or the weak yen, the repercussions for Japan could be catastrophic.

However, Scowsill is optimistic. โ€œI donโ€™t believe that either the individual consumers or the travelers talk and think that way at all. If you are a South Korean consumer living in Seoul or any part of Korea and youโ€™re looking to go on a holiday somewhere, you are going to decide to go to China or Japan or wherever and youโ€™re not going to be influenced by any politicians, so thereโ€™s no reciprocity going on here. Itโ€™s just the flow of the market. You see this between Europe and North America. When the dollar exchange rate veers dramatically, suddenly the Americans are going to Europe or Europeans are going to the States. And it depends on the dollar exchange rate. You see in the last 10 to 15 years, it changes quite a lot. So this is a phenomena that all of these countries are going to have to get used to.โ€

Can we pin the down the current situation as a consequence of the yen being weak at the moment?
Yes. It is completely that. It has nothing to do with politics. The important thing is that if there is a political confrontation, it runs for a very short period of time. And even if the politicians are right and say itโ€™s not good to travel to a country, after two or three weeks, everybody ignores it and life goes on and everything goes back to normal. And this situation going on with Japan and Korea can be pinned down on the exchange rate. Nothing else.โ€

So, the take home message from Scowsill is simple. JATA and PATA should get together immediately to discuss this situation and that the weak yen is to be blamed for the Japaneseโ€™s reluctance to travel these days.

About the author

Avatar of Nell Alcantara

Nell Alcantara

Share to...