Coronavirus: in Japan, Chinese tourists’ absence begins to bite
- A guaranteed Chinese clientele was the backbone on which numerous Japanese hotels, retailers and restaurants built their businesses
- But all that changed with the virus outbreak, which now threatens the Olympics, university admissions and cherry blossom viewings as well
Fujimosu ryokan in the resort town of Nishiura Onsen, on the coast south of Nagoya in central Japan, first opened its doors in 1956 and initially targeted Japanese travellers. Following a slump in domestic travel about seven years ago, however, the management of the 46-room property turned to the Chinese market.
According to market analysis firm Tokyo Shoko Research, the strategy was working well and the ryokan had as many as 50 tour groups from China. But that all came to a sudden halt on January 27, when the Chinese government imposed a ban on its citizens travelling abroad in groups.
“It is a precious ryokan that my forefathers kept going up until now, but with no customers, there is nothing that we can do,” Go Ito, the owner of the property, told the Mainichi newspaper.
The impact of the coronavirus outbreak is already being felt across Japan’s economy, but it is arguably the travel and transport sectors that are most exposed.
“I went through Narita Airport yesterday morning and I could see that the area for low-cost carriers was almost deserted,” said Martin Schulz, senior economist for the Fujitsu Research Institute in Tokyo, who predicted the aviation sector would suffer “a very strong impact”, pointing to 13 regional airports in more remote parts of Japan that had worked hard to attract budget airlines flying from Chinese airports and have now been forced to halt flights.
The knock-on effect from this loss of tourists will inevitably be hurt for local hotels, retailers and restaurants who built their businesses on a guaranteed Chinese clientele.
“Japan remained relatively open to Chinese tourists; the problem came when the virus spread too fast and restrictions were put in place for all travellers,” Schulz said.
He said Japanese companies had been “very careful” about their exposure to external shocks since the untold disruption to supply chains caused by 2011’s earthquake and tsunami in the country’s northeast, followed by severe flooding in Thailand a year later, but believes little could have been done to protect firms from this latest calamity.
“There are a lot of companies that are going to take a big hit from this, but we also have to look beyond the threats of immediate bankruptcies,” he said.
“We have to look down the line and the Tokyo Olympic Games. If that is cancelled by the organisers or if people who had been planning to come start to cancel their visits, that will have a serious impact on the inbound tourism sector.”
Only an apocalypse – or government ineptitude – can stop the Olympics
Japan’s higher education sector – which was already feeling the impact of a falling number of domestic students and was actively appealing to young people in foreign markets – is also facing difficulties, said Makoto Watanabe, a professor of communications at Hokkaido Bunkyo University.
“A lot of Japanese higher education colleges and universities, especially the less prestigious schools or those in rural parts of Japan, have been working hard in recent years to attract students from China, South Korea and, more recently, parts of Southeast Asia,” he said.
“But now they have run into a serious problem. There are plenty of parents who have read the news about cases of the virus here in Japan and don’t want their children to come; at the same time, the schools need foreign students to stay in business, but they are very worried about a student from overseas bringing the virus into their university.”
The start of the new academic year in April will bring a better idea of how many foreign students have turned down places at Japanese universities, Watanabe said, adding that in his view “a lot of colleges that were already struggling are going to find this coming year even harder”.
Media coverage of the outbreak has triggered a number of panicked responses from Japanese shoppers – perhaps mindful of the problems that occurred in the aftermath of the 2011 earthquake – with supermarket shelves being stripped of toilet paper over the weekend.
“Certain sectors of the public have gone into panic mode and toilet paper is always the first to go,” said Schulz, the economist.
Rumours of a looming toilet paper shortage caused by paper companies switching their output to face masks were dismissed on Monday by an industry body, which said in a statement that the materials used in the two products were completely different.
Nevertheless, a degree of panic buying continues, with canned goods and bottled water proving particularly popular.
The concern has even spilled over into Japan’s much-anticipated hanami cherry blossom viewing season, with organisers of some of the biggest events announcing that they will be cancelled this year.
The national mint, in central Osaka, traditionally hosts one of the biggest hanami events in the nation’s second city, but issued a statement on Friday saying that its gates will remain locked this April.
Other events are expected to follow suit, with the number of people partying beneath cherry blossoms in public parks across the country set to be a fraction of those in a typical year.
