Can luxury travel give Japan’s economy a post-Olympics shot in the arm?

Virtually every time she finds herself enjoying the view or sampling local cuisine in one of Japan’s many picturesque backwaters, Evelyn Teplass-Mugii asks herself why there is not another foreigner in sight. All too often, she says, the tourists are following the well-worn “Golden Route” which links the bright lights of Tokyo and Osaka, with a cultural and historic detour to the ancient capital of Kyoto typically thrown in. But for a foreign visitor to leave Japan with memories of only those cities is a missed opportunity, according to Teplass-Mugii, executive director of Tokyo-based travel company The Art of Travel. “There are so many places to see and so many things to do that often when I go to these places I wonder why there is nobody else there with me,” she said. All that could soon be set to change, however, under a new government initiative designed to get overseas visitors off the beaten track. Though details are scant, with no mention yet of how much money might be made available, the plan appears to involve government support for the construction of 50 new high-end hotels in parts of the country that are less popular with tourists or where the local travel industry has taken a hit. Japanese tourists flock to Taiwan over Hong Kong, South Korea Chief Cabinet Secretary Yoshihide Suga hinted at as much last weekend during a visit to Kyushu, the most southwesterly of Japan’s main islands that was rocked by a series of earthquakes in April 2016, damaging infrastructure and crippling the local travel industry. Kumamoto Castle, often described as one of the best examples of a feudal-era fortress in Japan, was badly damaged in a magnitude 6.2 quake on April 14, 2016, with stone walls collapsing and a number of buildings crumbling entirely. After inspecting reconstruction work in the prefecture, Suga said the government “will aim to build around 50 world-class hotels across Japan”. Funds for the ambitious development programme will come from a loan scheme for private sector companies being set up under a new stimulus package recently unveiled by the government. A raft of measures worth 26 trillion yen (US$239 billion) have been announced to boost Japan’s flagging economy, which has been dented by the global economic slowdown, the US-China trade war and the impact of the recent domestic consumption tax increase. Concerns have also been raised of further economic hurt in the months following next year’s Tokyo Olympic Games. Tourism could hold the answer to at least some of these woes, the government hopes. As recently as 2009, fewer than 7 million foreign tourists were visiting Japan each year, but by 2013 more than 10 million were coming – and the figure has continued to climb. Last year, it stood at 31.19 million and – thanks in part to the Olympic Games – is expected to hit 40 million in 2020. Prime Minister Shinzo Abe wants that number to reach 60 million by the end of the decade. While the travel industry is delighted at this new-found appreciation of Japan as a tourist destination, many within it caution that there is a growing need to get visitors off the so-called Golden Route that links Tokyo with Kyoto and Osaka. Aware of the congestion that is already clogging these three must-see destinations, the government will be offering incentives for hotel developers to build new properties elsewhere in Japan. “As a luxury travel company, we know there is a real shortage of high-end accommodation options across Japan so this is very welcome, although I do hope that a lot of thought goes into how these hotels are going to be developed,” said Teplass-Mugii, of The Art of Travel. “It has to be done thoughtfully and find a balance between global brands and local ownership and the creation of properties that are different and distinctively Japanese.” One pitfall would be creating a slew of new hotels that were all much of muchness and not very different from those found elsewhere in the world, she said. While the “Golden Route” remains popular with the vast majority of first-time tourists in Japan, repeat visitors are showing signs of stretching their wings to reach other parts of the country. Chinese tourists, for example, have shown a preference for visiting the Tohoku region in the north of Honshu – the largest island – where winter sports opportunities, beautiful landscapes and unique festivals abound, according to the Japan National Tourism Organisation. “For their first few visits, Chinese visitors still choose to go to Tokyo, Osaka, Hokkaido and Okinawa, but they seem to get more adventurous after that and head off to Kyushu or the Hokuriku region or Shikoku,” said Keiko Matsuda, senior assistant manager of the organisation’s East Asia Overseas Promotion Department, which uses popular Chinese social media platforms such as Weibo and WeChat to spread the word. High-end tourism can have a number of knock-on benefits for local economies as money filters down from top-class hotels and restaurants, according to Ashley Harvey, country manager for destination management and public relations firm Aviareps Japan. “I suspect there has been a shift in thinking away from volume tourism to the significantly higher returns that can come from the luxury market,” he said “The thinking is that the luxury market can act as a key driver of the travel economy and will proportionally have a much larger effects as these people will stay longer, are not worried about price points and whatever they spend in hotels and restaurants provides opportunities in a whole load of associated businesses.” Harvey described the potential for luxury tourism in Japan as “huge”, but said it was critical that attention was diverted away from Tokyo, Kyoto and Osaka. “Japan absolutely can handle 60 million foreign visitors every year, but Kyoto can’t,” he said. “There needs to be far greater awareness of the product, of how people can get to some of these more distant places, of meeting their needs for helicopters or private jets.” Some areas of the country, such as the tropical islands of Okinawa and ski resorts in Nagano and Hokkaido prefectures, were already “getting on the luxury travel bandwagon”, Harvey said, but others like Lake Biwa have the potential to become Japan’s version of Italy’s Lake Como – a “playground of wealthy tourists”, he said.