TT-800 (Tourism Edition) -- Breaking Down Exclusionism and Vested Interests

Japan Travel
* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie
Lloyd, a long-term technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

Tourism Sector Edition Sunday, April 19, 2015, Issue No. 800

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+++ Breaking Down Exclusionism and Vested Interests

Last week my travel business, Japan Travel, launched Japan's first open
tours marketplace for inbound travelers. While there are of course
plenty of other websites that let you book tours in Japan, you will
quickly find that these sites are either run by the tour operator, or
they are operated in a way that allows the operator to skirt the law
(more on this in a minute). Until now there hasn't really been a local
Craig's List type of tours marketplace. So we thought we'd start one.
You can find it at www.japantravel.com/tours.

The site is still in its first incarnation and still has a long way to
go. We decided to feature tours that speak to our long-term goal of
wanting to get people out of the Golden Triangle (Tokyo, Kyoto, Osaka)
and explore Japan in greater depth. Staples such as Harajuku, Ginza,
SkyTree, Mt. Fuji, Kiyomizu-dera Temple, the Hiroshima A-Bomb Dome,
etc., are all fine, but there is so much MORE to Japan. For this reason
we are searching for tours that you normally wouldn't think exist, and
yet which can stimulate people to keep coming back for more. The more
this happens, the healthier Japan's rural economy will become.

Some of the tours that we are still working on (so the site really is
still in its infancy) include temple vegetarian cooking lessons, visits
to Katana (sword) makers who are working on bespoke orders for high-end
foreign clients, bilingual teachers showing how to use specific advanced
gadgets (e.g., programming Japanese-made robots), visits to regional car
auction sites after which you can actually buy the cars, WOOFing for
several months at rice and green tea farms, and even overnighting with a
cranky monk who will let you join him in prayer and hiking. Basically if
you can spend time on it and can stay there, then we want to include it.

Showing such unique sides of Japan is a good thing isn't it?

[Continued below...]

-------------- Have a Tour to Promote? --------------------

Japan Travel is recruiting tour operators who would like to list their
inventory on our new Tours Marketplace (http://bit.ly/1IsujUw). Listing
is free, and only successful bookings will attract a marketing fee. Take
advantage of our position as Japan's largest independent inbound travel
website (714,000 unique users in March, 2015) and give your tours the
exposure you need to develop your business. We are particularly
interested in tours that include a unique aspect of Japan and where your
marketing collateral includes strong photography and/or videos,
evocative descriptions, and strong appeal. After June 1st, all new tours
MUST include at least a one-night stay or formal (not public) ground
transport.

Operators and agents wishing to apply, contact info@japantravel.com
-----------------------------------------------------------

Well, "yes", in that it helps to demystify the country and makes the
rural sectors more accessible, and "no" in that it raises all kinds of
problems with Japanese bureaucracy. One of the ugly sides of Japanese
tourism is that the sector is aggressively defended by the incumbents
and they don't want outsiders stealing their cheese -- especially as the
inbound market enjoys its first significant expansion in more than 40
years. This means that foreign innovators such as Airbnb, for example,
are faced with huge hurdles getting started in Japan and may yet be
forbidden through legal action from really getting off the ground.

Apart from accommodation, other legally over-regulated parts of the
inbound tourism sector include charter flights, tour guides, travel
agencies, ground transport, phone rentals, vehicle rentals, airport
kiosk operations, personnel dispatch, and... well, the list goes on. My
impression is that the regulations are designed to channel bond monies
and other fees to NPOs staffed by people who have little to do with
traveler service quality and protection, but who live quite nicely off
the proceeds.

Take tour guides for example, a subject we have covered before. The
guide exam is sufficiently difficult (of course in Japanese only) that
to my knowledge there is only one foreigner who currently working as a
registered tour guide in Japan. In Tokyo out of 76 listed registered
guides, no one is non-Japanese. Fees are regulated, and the punishment
for infringing the rules is a JPY500,000 fine, although no jail time.
Side note: no jail time is a significant point, because it means there
is regulation but not unmitigated illegality. In other words, it's a law
that is not taken particularly seriously by the judicial system, and
this probably explains why as of 2010 there had never been a prosecution
of an illegally operating guide.

If there is an undertone related to the Japanese tourist industry, it's
one of exclusionism and vested interests. For example, a review of the
nation's top panel on inbound tourism policy, The Advisory Council on
Tourism Nation Promotion, shows that it doesn't have a single foreigner
in its ranks. It is amazing (a positive thing I guess) that they let a
"maverick" like Hiroshi Mikitani from Rakuten in there, though. The
member list for this rather important group and the interests they
represent can be seen here:

http://bit.ly/1D20QMl

What this means on a practical level is that anyone wanting to do
something innovative in tourism in Japan either has to be extremely
creative or break the law. I've decided to work on the creative aspect,
however, in contrast a number of successful online travel agents have
realized that simply ignoring Japanese laws is easier. They can do this
by operating outside the country and thereby taking advantage of the one
huge weakness of the Japanese legal system -- that it can't and won't
enforce against companies and individuals who are not resident in Japan.

[Continued below...]

------------------ ICA Event - May 21st -------------------

Speaker: Rochelle Kopp - Managing Principal of Japan Intercultural
Consulting
Title: "Managing Across Cultures"

Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, May 21st, 2015
Time: 6:30 Doors open, Buffet Dinner included and Cash Bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No sign
ups at the door!!!!!!!
RSVP: By 5pm on Monday 18th May 2015. Venue is The Foreign
Correspondents' Club of Japan.
http://www.fccj.or.jp/about/access.html
-----------------------------------------------------------

So when you see an online site offering cheap guides or low-cost
holidays, take a careful look and see how many of their staff are based
in Japan -- usually none or one. If there is someone in Japan, then they
will technically be in a support and service role, not part of the
selling and money-collecting processes that the Japanese authorities are
so eager to stop having happen at home. This structural separation makes
it difficult for the authorities to shut them down.

You might ask how it is possible for someone operating outside Japan to
run a successful Japan inbound travel business. Ten years ago it would
not have been possible, but now with the help of the Internet to
identify independent and willing providers of ground transport, the
utility of Booking.com and other online hotel services, rapidly
increasing acceptance of credit cards, and by selling with the euphemism
"Self guided tours" or sending in a Japanese-speaking tour "leader" from
the home country, it is.

I'm not complaining about the off-shore operators, because their
services are typically professional and the tours are innovative.
Indeed, they are shaking things up and that's healthy for an atrophied
industry. Rather, if the trend continues, then there will be a tipping
point where they are taking sufficient business off the table that the
government will realize it can't hold back the tides of change. We will
see just how far in the future this tipping point occurs when the
government decides what to do about Airbnb, which is no longer off-shore
but which is still very much a disruptor and innovator.

If the government allows Airbnb to stay but requires a modification in
format (as happened to PayPal in the payments industry when it
"legalized" its operation in Japan), then it will be a big concession
and a signal of change. If on the other hand they kick out Airbnb, as
rumors currently suggest will happen, then the message to foreign
investors in the Japan tourism sector will be clear -- keep innovation
off-shore and stay outside the short arms of the Japanese legal system.

******************
Lastly, some of you might notice that this is issue 800 for Terrie's
Take -- another significant milestone (century) for me, and one that
happens every two years. I'd like to thank my readers for your wonderful
friendship, feedback, and education. Yeah, I get lots of better-informed
opinion after some of my rants, and that certainly helps me think things
through better in future issues. I will continue to put my worst
transgressions up as Corrections, so please keep the comments coming.

...The information janitors/

***********************************************************
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