Asia Matters: Economy Not Biggest Threat to Hawaii鈥檚 Japanese Tourism Market
Despite a recession at home, many Japanese visitors are willing to pay top-dollar when they feel certain of a product’s quality. But we cannot take customer satisfaction for granted.
These are unquestionably difficult days for Japan鈥檚 economy. And tourism executives and government officials in Hawaii are right to pay attention to the situation. But despite some scary numbers, the Japanese visitor market to Hawaii is not about to drop off a cliff.
A much bigger problem is stalking Hawaii鈥檚 Japanese tourism market. Hospitality officials in both the public and the private sectors need to worry more about service and customer satisfaction than quarterly GDP figures.
The seeds of Japan鈥檚 latest economic slide were planted earlier this year. In April, Japan鈥檚 government raised the national sales tax for the first time in 17 years, moving it to 8 percent from 5 percent to address one of the worst government balance sheets in the western world. Since then, consumer spending has fallen sharply, along with a number of other economic indicators. Prime Minister Shinzo Abe has called for a new round of elections next month, but no matter their outcome, short term economic prospects are not good.
Tourists soak in another Waikiki sunset.
PF Bentley/Civil Beat
Japanese spending on travel to Hawaii is likely to take a hit at some point, although it has not tumbled precipitously in the six months that Japan has actually been in recession.
August was a weak month for visitors from Japan. But according to by the Hawaii Tourism Authority , overall visitor arrivals from Japan through October are about the same this year as they were last year. It鈥檚 true that visitors are not staying as long and consequently are spending a bit less during their stays, and the decline has become more noticeable in the last few months. At the same time, organizers for next month鈥檚 Honolulu Marathon expect more entries from Japan this year than last year.
History shows recessions in Japan have not always matched declines in tourism to Hawaii. When the government raised the national sales tax in 1997, it helped push the domestic economy into recession, but it didn鈥檛 appear to disrupt many immediate travel plans to Hawaii. That year, more than 2.2 million Japanese visitors came to Hawaii 鈥 setting an annual record that still stands. And that August, traditionally the busiest month for visitors from Japan to Hawaii, the yen-dollar exchange rate stood at 117.89 鈥 nearly exactly its current value.
The country鈥檚 been in recession three of the last four years, and over that time Japanese visitor arrivals have never fallen below 1.2 million. This year they鈥檙e on track to top 1.5 million for the second year in a row.
Exchange rates have more of an impact on visitor arrivals, but even here the tourism numbers have held up over periods of a weaker yen, especially once those rates stabilize.
The much greater danger to Hawaii鈥檚 tourism market in Japan comes from a combination of arrogance, entitlement and complacency. And it鈥檚 illustrated by the hundred-dollar melon.
Western visitors to Tokyo have marveled for years about the price of fruit in department stores. Not the seasonal produce arranged in open bins, but the specially boxed gift melons, encased in tissue paper. They鈥檙e perfectly shaped and certain to be remarkably sweet. And that鈥檚 why they can cost the equivalent of $100 apiece.
This is critical to understand the Japanese market. Many consumers are willing to pay high prices, but they also have an absolute expectation of quality. In the case of the hospitality industry, that means a certain level of service, of competence, of professionalism. And in Hawaii, it appears that鈥檚 no longer a guaranteed product. Far too often, we are taking our Japanese visitors for granted, assuming that they are as much a part of the natural order of things as trade winds and rainbows.
This summer, the Japan Hawaii Travel Association noted a worrying spike in complaints from Japanese travelers. They included inattentiveness at the front desks of hotels, rooms not matching expectations for cleanliness, and tour coordinators not showing up on time. More troubling may be those visitors who don鈥檛 complain, but merely don鈥檛 return.
Which brings us to a key difference from 1997. Compared to the last time taxes went up and sent Japan鈥檚 economy skidding, the Japanese traveler has a wider world of comfortable choices when it comes to exploring different destinations.
, more Japanese visited China and South Korea this past August than came to Hawaii. Nearly as many went to Taiwan. Thailand and Hong Kong were not far behind. Smaller markets are showing steady growth in Japanese visitors 鈥 from the Philippines and Singapore to Australia and New Zealand. Hawaii retains a special relationship with its Japanese visitors, but it鈥檚 a relationship in need of attention.
The state of the Japanese economy and the relative value of the yen are not the most important factors for visitors from Japan. It鈥檚 the value the Japanese traveler is willing to assign to the Hawaii experience.
