“KIKO No Ikioi” is the Japanese
saying for “no choice but to carry on,” and travel companies in North Asia
have certainly carried on even though cross-border travel remains at a
standstill, two years into the pandemic. Global to local OTAs have carried on
investing in tech, team and product; startups have emerged, addressing COVID-induced
opportunities; and new players have risen, promising to shake things up in what
will be an exciting 2022. Here are the key takeaways from WiT Japan & North
The night before WiT Japan
& North Asia, I had recurring nightmares and wondered if we had reached a
bridge too far – to run a hybrid, bilingual event in an untested venue with an
untested production team, us in Singapore and them in Tokyo, and a language
barrier between our teams as wide as the Japan Sea.
My nightmare did come true
the first 10 to 15 minutes (although it felt longer) when nothing worked as
planned – we should do a bloopers video – but the Samurai performance by
Katsumi Sakakura, conceptualized during COVID as an act to
“dispel the plague,” inspired us to dispel all fears and power on and after a
bumpy start, we managed to power through our two-day ninth edition which marked
our “Homecoming” to Tokyo.
travel comes home, it will be massive, but for now…
In Japan, 32 million
inbound travelers (recorded in 2019) are waiting with bated breath to return.
Ask anyone which is the first destination they want to get to when they can,
and I guarantee, Japan is up there. Then there are the 20 million outbound
Japanese who haven’t been able to travel out the past two years.
In South Korea, an
outbound powerhouse that produced more than 28 million outbound trips in 2019,
2.3 times the number of outbound trips in 2009 and 1.5 times the number of
trips in 2015, residents are panting at the starting gate.
In Taiwan, one of the most
closed countries in North Asia, travel agencies suffered the biggest loss in
revenue (96.8%) between 2019 and 2021 given most are heavily reliant on
outbound travel, while hotels, which had quarantine and staycation business,
fared better, sustaining a 29.5% drop, according to figures shared by Daniel
Cheng of Redefine Tourism Mixer, Taiwan.
North Asia cross-border
travel remains stuck. Akiko Yoshida, senior executive vice president, Japan
National Tourism Organization, admitted she had no answer to when Japan’s
borders will open. And when you consider that East Asia was responsible for 70%
of Japan’s inbound visitors, and that governments in the region have been most
conservative in opening borders (and let’s not even talk about China), well,
full inbound recovery is still a long way away for the region.
tourism, temple stays, volunteer activities – domestic just got a whole lot
For now, the priority is
to get domestic travel back on track, and a stronger home industry has
certainly emerged out of this period. From Japan to South Korea to Taiwan,
speakers shared stories of regional revitalization of remote places, that had
been largely forgotten when the world looked outwards.
In Japan, Otera
Stay is turning abandoned temples into wellness retreats. Mai
Sato, founder, said of the total 77,000 temples in Japan, 30% (20,000) are set
to disappear in the next 30 years. “What a waste,” she said and so she started
her quest to convert temples and shrines into “the place you discover yourself,
the experience you change your life.”
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Rina Nagaoka set up Otetsutabi to
connect volunteers with local businesses and communities in which volunteers
get paid. This has created a whole plethora of local activities – from helping
at elementary schools to cleaning up plastic to chopping wood – as well as
forged closer ties between traveler and local community. Pitching as part of
the Startup Showcase, she won the People’s Choice Award.
Kou Sundberg, founder
of Kiraku, also runs Nazuna,
which converts traditional Japanese homes into luxury lodging. A former
investment analyst, he wants to start a new trend of sake tourism in Japan. His
company has renovated a sake brewery in Narai-juku, and apparently, it’s exporting
most of its sake to Singapore. If wine tourism works so well elsewhere, why not
sake tourism in Japan, he said.
In Taiwan, a “placemaking”
movement has taken off in local spots in which local communities are encouraged
and empowered to “make” their own experiences and activities. The Placemaking
Alliance, with about 100 members, is led by Gina Tsai, president, Creative
Tourism and Community Design Association. She cited Taitung province as an
example, in which government worked with local incubators for placemaking, and
products and services were distributed through travel agencies and digital
Taiwan’s number one listed
travel company, Lion Travel Group, with $1 billion annual revenues pre-COVID,
in its pivot to domestic, invested in destination experiences by cooperating
with government entities such as Taiwan Railway to convert railway stations to
tourism spaces. “Our goal is to serve FIT business in domestic travel, which is
95% of the addressable market, and that prepares us for the inbound future,”
said Ryan Shen, head of investment, who added he cannot wait for the Taiwan-Japan
corridor to open.
market emerges as lines between live, work, play blur
PerkUP, which runs co-workation.com,
is turning abandoned schools, camping sites, cottages and unused hotel grounds
into places for corporate events, retreats and experiences. It is addressing
the blurring of lines between live, work and play which is playing out in full
force in Japan. Isa Saito, co-founder and COO, estimates the Japanese workation
market at 3.34 trillion yen.
Takeshi Sabetto, secretary
of the Sharing Economy Association, and workation advisor to Japan Tourism
Agency, started ADDress, a multi-location sharing service to enable Japanese to
stay anywhere they choose. It currently has 200 ADDress houses, with each
property managed by a Yamori (concierge).
He said the pandemic had
created new aspirations by Japanese – “want to live anywhere, anytime,” “want
to live in both urban/rural areas,” “while having remote work, want to feel the
air of nature” and “want to interact with people who live in local area.”
Currently, its users are 65% male and 35% female, with singles forming about
60% of the community.
With vacant houses in
Japan expected to reach 21.66 million by 2033, he said there was a huge
opportunity to address four sectors – workation (remote work), second hometown,
weekend house and “seeking a place to migrate.”
This change in work
culture is particularly profound in a place like Japan, with its “salaryman”
image. JTB’s liquidation of fixed assets, selling its headquarters in Tokyo as
well as an office in Osaka, while done out of financial consideration, gives
the organization impetus to introduce “flexibility, remote work, work from home,”
said JTB’s CEO and president, Eijiro Yamakita
diversity firmly on top of agenda
ESG (environmental, social and governance) is exploding in Japan,
said Kathy Matsui, general partner of the $150m MPower Fund, which is Japan’s first
ESG-focused fund. The former Goldman Sachs executive, known for her
championship of “womenomics,” decided to set up the fund, with two female
founders, to help early and mid-stage startups start their journey right with
ESG principles embedded from the outset.
It’s hard to change
mindsets of large, traditional organizations while younger minds are more
“malleable,” she said.
In that regard, Takaya
Shinozuka, founder of Reiwa Travel, is an
example of an entrepreneur who, in his second startup, is placing HR and
governance among its top priorities, along with product and finance. “We are
taking this time to get HR and governance right from the start to build a more
sustainable business,” he said.
Matsui said Japan has made
good progress in terms of representation of women in the workforce – moving
from 50% in 2014 to 70% in 2019 – but “there is a dearth of women in management
JTB’s Yamakita said the
travel company, currently employing about 20,000 people, was also addressing
this issue and had set a 30% target of diversity in leadership “although it
will take some time,” he said.
Matsui, whose fund is
eyeing healthcare, fintech, next-generation workplace and education and
environment, said the travel vertical was interesting for her fund in the areas
of sustainability, wellness and the future of work.
becomes local, pushes loyalty, new products
Global OTAs such as
Expedia, Agoda and Booking.com are not being left behind in this domestic
world. With their global coverage, they have been able to recover well as a
whole, have invested in tech and product – Booking.com, for instance, has
introduced flights in five markets in APAC (Thailand, Philippines, Australia,
Hong Kong and India) – and they will also emerge as stronger domestic players.
In fact, Timothy Hughes,
vice president corporate development, Agoda said “we are as much domestic
players as anyone in Taiwan, Korea and Japan” and the OTA has spent the past
two years working on hotel supply for domestic markets. “Domestic supply is
different from global supply,” he said.
The fact is, these OTAs
have had time to work on their domestic content and partnerships the past two
Michael Dykes, senior
director, market management, Northeast Asia, Expedia Group, said 60% to 80% of current
demand in Northeast Asia is from Expedia Group loyalty program
members, and the group’s move to merge its loyalty scheme will strengthen its
market position in the region.
managing director, Asia Pacific, Booking.com, said,
“Though the Omicron variant may be causing a spike in cases across Asia
Pacific, travel sentiment is still positive, especially with regards to
domestic travel. According to our Travel Predictions research for 2022, 72% of
global travelers surveyed agreed they would say ‘yes’ to any vacation so
long as their budget allowed. In fact, 74% of Japanese travelers
agree that travel helps their mental and emotional wellbeing more than other
forms of self-care.”
For these global OTAs,
diversity and sustainability will also be dominating their agenda even as they
look to prepare for the rebound in cross-border travel in Asia. Dykes does not
believe Asia’s current laggard position in recovery will hold it back in
innovation and aspiration when travel fully returns.
biggest disruption to come is in corporate travel
With the pandemic creating
an upheaval in business travel and meetings, this sector is ripe for an
overhaul, and tech will play a big part in it.
Bertrand Saillet, managing
director, FCM Travel Asia, cited duty of care as a key trend to watch. “There
is a realization from companies especially in Japan that they need to do more
in that space, and TMCs have a role to play,” he said. To prepare for the
rebound in Japan, FCM has taken a stake in Japan’s NSF Engagement, formerly
Sony’s in-house corporate arm.
Kei Shibata, CEO, Venture
Republic Group – TRAVEL jp & Trip101 -
sees personalization as a key trend. Personalized service as opposed
to self-booking service can be the key to better address the uncertainty around
travel rules and restrictions, said the executive, whose company launched a
chat-based corporate booking tool with LINE. So far, 100 corporations had
signed up for the service and he was seeing demand for dynamic packaging –
clients wanting to book flights with hotel stays.
Johnny Thorsen, vice
president, strategy and partnerships, Spotnana, tips
transformation – global travel programs will migrate from a country-by-country
model to a single global instance with unlimited flexibility – and “platformitization”
– standalone products and services will be replaced by an open microservice
architecture with unlimited freedom of choice for the customer.
And the biggest change to
come – sustainability. “How can each company’s travel programs meet their
sustainability goals – this is much more than just carbon footprint,” said
Saillet, while Thorsen added, “Companies will start making active new policies
around green travel management.”
on the premium segment, new customers emerge for cruises
There is expectation that
the first wave of recovery will be in the premium segment as is already being
seen in the cruising sector. Michael Goh, president of Dream Cruises and head of international sales for
Genting International Lines, whose ships have carried 500,000 guests since it
started cruises to nowhere in Asia a year ago, said it was seeing most demand
for its premium suites. “People are hungry for luxury experiences, cabins with
private balconies,” he said.
The pandemic has also
caused a huge shift in customer demographics – the 20s to 40s now form 70% of Dream
Cruises’ customers while over-40s form the rest – and this has resulted in
Dream Cruises integrating APIs with Klook and setting up shop on e-commerce
sites like Lazada.
JTB’s Yamakita said its
JTB Boutique line of business would be a key focus with a new division created
to look after premium products such as private charters and cruises.
NFTs and all that buzz
In the Japanese OTA panel,
the metaverse, possibly the biggest buzzword of 2022, was cited along with
sustainability as trends to address, with leaders saying they would be curious
to know about its applications to travel.
In Taiwan, a startup
called MomentX is attempting to show just that
by healing brands develop their business in metaverse. Founder James Lee said
MomentX is a “cross-chain metaverse platform powered by Web3,” supporting multi
blockchains – Ethereum, Flow, Tezos, Polygon – and integrating with mainstream
wallets such as Metamask, Blocto, Temple.
When asked about how they
see the metaverse play out in destination marketing or in experiences, Takaya
Shinozuka of Reiwa Travel and Eric Gnock Fah of Klook said
they didn’t know enough about it to make any in-depth comment but they both
felt that for the moment, given the inability to travel, travelers would be
more interested in physical travel than being in a virtual world.
“We’ve been in it for so
long and people are missing the physical connections of travel,” said Gnock
I end with a quote shared
by JTB’s Yamakita, “Yuki ni taete baika uruwashi,” translated, “Withstand the
snow then plum blossom is beautiful.”
Here’s to beautiful plum
blossoms in 2022.
* This article first appeared on WebinTravel.