Tourism as Relatively a New Field in Japan - Essay Example

?Executive Summary Aims and Objectives While Japan continues to experience a decline in domestic travel, Okinawa has seen healthy growth. However, the industry is faced with image issues, such as unbalanced market share in segmentation and major leakages. Despite this, tourism contributes significantly to the local economy. World Tourism Tourism is one of the fastest growing economic sectors worldwide, recovering from the economic downturn of 2008 and 2009. Despite the fact that 2011 was a turbulent year, international tourist arrivals grew by 4.6% to reach 983 million worldwide, up from 940 million in 2010. Also, international tourism receipts reached a record of US$1.030 trillion, up from US$928 billion in 2010. Tourism growth worldwide will be at a more moderate rate of 3.3% per year as compared to the average of 4.2% witnessed over the last six decades. The presence of emerging economies will add an average of 30 million arrivals per year, compared to 14 million from advanced economies. As a result, there will be a shift in the global market share by 2030. Japan Tourism is relatively a new attraction in Japan. In 2003, the first initiative was established to attract 10 million international visitors to Japan by 2010. This was later updated in 2007 to grasp a better understanding of foreign visitors and to increase satisfaction with the hope of creating repeat visits. As the country continued with efforts to make the shift from being a “Trade Nation” to “Tourism Nation,” the central government enacted its first tourism policy, making tourism a priority. As a result, the Japan Tourism Agency was created in order to promote the country abroad. The Japanese economy is facing many challenges, most notably a lower birth rate and aging population. Tourism brought US$608 billion (4.9% of GDP), while creating employment for 4.06 million people, and 6.3% of total employment during 2009. Okinawa Tourism has traditionally flourished in Okinawa. Regarded as the “Hawaii of Japan”, it has been a popular destination for domestic visitors, accounting for 95% of total domestic arrivals. The contribution of tourism to GDP in 2009 was 4.6%, which is quite significant when compared to other “big destinations” in the world (USA - 3.4%, Australia - 4.3%, France - 3.7%, and Japan - 3.4%. Okinawa is uniquely situated within a 1,500 kilometer radius from most major cities in Southeast Asia; however, the percentage of international tourist arrivals from this area is low. The advantages compared to other beach destinations like Bali, Phuket, and Cebu are accessibility, safety, and cleanliness. For the last few years, the share of the international markets, especially from Mainland China, Hong Kong, Shanghai, and Korea, grew steadily with a visa relaxation scheme and additional flights. In order to develop an untapped market, analysis and research on a destination competitive environment is evaluated. Destination Management Tourism is no longer about changing cultures and history; the industry has evolved into a brand. The results of the Travel and Tourism Competitive Index and Country Brand Index are used to evaluate countries’ progress over time in each category. This is necessary to improve a country’s competitiveness, growth, and prosperity. Although Japan has a strong country brand, it scored poorly in its affinity of the country and must strengthen the country’s creative and innovative industries. Okinawa can benefit from Japan’s strong country brand to develop its competitive identity. The second part of the section studies the structure and role of the government in tourism development. The transparency of tourism organizations in Okinawa is questionable. For an industry that is economically significant, tourism is weak politically. The government needs to be inclusive and engage participative decision makers and influencers in destination management. In the event of a crisis, it is the government’s role to provide ample opportunities for the media to gain access full and accurate information in order to establish credibility and trust in an organization. Benchmark study Okinawa is often regarded as the “Hawaii of Japan.” Being on the same latitude as Hawaii, Okinawa shares Hawaii’s warm subtropical climate, dramatic scenery, and is a popular tourist destination for Japanese tourists. Hawaii is at the stage as a tourist destination where Okinawa strives to be. While Hawaii has succeeded in capturing more than seven million visitors after overcoming some turbulent events, such as the global economic downturn in 2009 and the aftermath of the March 11 earthquake disaster in 2011, Okinawa has also been struggling and has yet to reach the six million mark since 2007. Studies show that Hawaii attracts older, better-educated, and more affluent visitors with an average income of US$150,000. The sentiment of the local community is just as important to promote tourism. In Hawaii, tourism is positioned as a vital part of the local economy; almost 80% of residents favor the industry. On the other hand, Okinawa locals are not aware of the positive effects of the tourism industry and also the role of tourism organizations is unclear. The increase in public awareness about the industry is an urgent need for tourism development in Okinawa. Conclusion Even with its rich natural and attractive cultural resources, tourism development in Okinawa is still premature. The island is crowded with a rapid rate of growth at the cost of depleting precious local resources. Failure to deliver the brand promise as projected could help the tourism industry lose its value proposition in Okinawa. It is clearly not about chasing the number of visitor arrivals. It means that greater emphasis must be placed on creating value for visitors and increasing spending per capita. Recommendations In order to capture a worldwide audience, communication must be in English. Another goal is to capture the luxury travel segment, which is one of the fastest growing markets in the industry. The number of millionaire households grew 12.2% worldwide during 2010. These types of customers always look for exclusivity, unusual experiences, and personalized services. Additionally, the market needs to be diversified instead of just focusing on the European market, where tourists take longer vacation days than their Asian counterparts. Representation, especially in Europe, is necessary to develop its market share and increase awareness and interest about Okinawa. Lastly, an introduction of tourism tax could be an alternative solution to shrinking Japan’s debt in the midst of controversial consumption tax increases. Okinawa can benefit from this additional taxation to support its infrastructure and local community. Conclusions Tourism is a money market industry. The industry plays an important role in today’s world economy. The evidence has presented that for small island economies like Okinawa, tourism is the main driver for the prosperity of the local people and businesses. Even with its rich natural and cultural resources, tourism development in Okinawa is still premature. But this is why it is rewarding to be involved in the making of a next great tourist destination. The size and importance of tourism in Okinawa is not thoroughly understood by the locals and even some of the industry stakeholders. It is clear that Okinawa requires a clear vision of a destination image. Key findings show that in order to sustain tourism development in Okinawa, decisions must be made very carefully about the accessibility and carrying capacity of all levels. The island is crowded with rapid growth rates, but this comes at the cost of depleting precious local resources. Failure to deliver the brand promise as projected could help Okinawa lose its value proposition; this will erode confidence in its destination brand. It is clear that the Visit Okinawa campaign has nothing to do with chasing a higher number of visitor arrivals. If Okinawa is going to become the next great tourist destination, the industry must shift away from quantity-focused tourism to quality-focused tourism. This means that greater emphasis must be placed on creating value for visitors and increase spending per capita. Successful tourism development, as seen in Hawaii and Singapore, requires a strong level of support from local and central government, well-established tourism organizations, and leadership that fosters and implements a shared vision. Okinawa still struggles with a high unemployment rate and maintains a heavy reliance on government subsidiaries. The government released its 5th edition of the Tourism Promotion Basic Plan for the next ten years in 2012. The goal of this plan is to attract 10 million visitor arrivals; out of this number, two million will be international visitors. These international visitors will generate US$12.6 billion tourism revenue, increase the average length of their stay to five days, and spend up to US$1,000 per capita. It is time for Okinawa show its potential and become the leading tourism destination in Japan. Recommendations In order to capture a worldwide audience through international news media on global television networks, publications, and on the Internet, the brand identity, vision, and mission statement must be communicated in simple English. Just like other global companies, tourism organizations need to position themselves on the global map. The tagline “OKINAWA, Japan’s Tropical Side” was created in 2011 and has been utilized in various promotional activities. This is only the first step; it is not adequate enough in communicating or positioning the vision of Okinawa tourism development. An organization’s mission statement describes clear objectives and value propositions. The message has to be simple yet powerful and consistent with the vision. This then creates positive aspirations in every stakeholder who shares common goals. It is apparent in the benchmarking section that Hawaii attracts older, wealthier, and better-educated visitors than Okinawa. Twenty-two percent of accommodation in Hawaii is classified as luxury; on the other hand, in Okinawa 45.9% of accommodation is budget-oriented. According to the Future of Luxury Travel, the number of millionaire households worldwide grew by 12.2% in 2010 to a total of 12.5 million. The United States continues to lead the world in millionaires, with 5.2 million millionaires households, followed by Japan with 1.5 million millionaire households, China with 1.1 million, and the United Kingdom with 570,000 (Horwath HTL, 2011). In fact, the luxury travel market is the fastest growing segment of the travel industry worldwide. In North America, luxury travel products make up almost US$3 trillion in annual sales (Tarlow, 2011). While there is no homogenous type in luxury travellers, common wants are exclusivity, unusual experiences, and personalized services. For example, Japan Airlines offers first class service to domestic destinations; it would be beneficial to include a route to Okinawa in order to attract premiere travellers. In May 2012, the luxury brand Ritz Carlton built its first hotel in Okinawa; this created much international attention. It may be a lengthy process to develop any tourism product, especially infrastructure and superstructure, but there is a growing demand for luxurious travel destinations. The longer visitors stay the more money they spend during their visit. The average length of stay for a tourist in Okinawa is 3.83 days and 9.47 days in Hawaii. Hawaii’s share of domestic and international travelers is 70:30, whereas in Okinawa it is 95:5. Due to the visa relaxations in 2011, Okinawa enjoyed an increase of 14.5% of tourists from the Chinese market. Although this is a good sign, market segments need to be diversified for Okinawa to truly become an international tourist destination. When vacation days given and taken in various countries were surveyed (Renzenbrink, 2012), countries such as France, Germany, and the United Kingdom took 30 vacation days each compared to countries like the United States (12 days taken), Japan (5 days taken), and South Korea (7 days taken). In 2011, Hawaii welcomed a total of 114,823 visitors from European markets with an average length of stay of13.10 days and US$2,073.4 spending per trip. It was believed that poor air transport infrastructure, long travel times, and high prices were the reasons for not capturing as much of the European market in Okinawa. However, in 2010, Bali welcomed 104,029 visitors from France, 96,412 visitors from the United Kingdom, and 84,406 visitors from Germany. In Cebu, visitors from these particular countries were recorded at 6,488, 13,438, and 12,564 respectively. The Okinawa government is too focused on neighboring Asian markets. Hawaii currently has global marketing partners in each major market area, with a total budget allocation of US$41 million including the United Kingdom, Ireland, and Germany,. This figure accounts for 0.4% of the total budget. Okinawa has representation offices in the following cities: Seoul, Taipei, Shanghai, Hong Kong, and Beijing. However, only the Seoul and Taipei offices are dedicated for tourism development with 10% of the operating budget. It is highly recommended that promotion and marketing activities are included in major European cities. Representation in international source markets is necessary to develop market share and increase awareness and interest about the destination. In Japan, there has been a heated debate over the increase in consumption tax from five percent to 10 percent under the newly appointed Noda administration. In light of the March 11, 2011 earthquake and tsunami disaster, which resulted in a radiation scare, this created distrust in the leadership of the Japanese government. Prime Minister Noda pleaded that it was a necessary tax hike to support social welfare and pension systems, which have become growing problems as the country’s population ages (Tabuchi, 2012). A tourism tax could be an alternative solution to shrinking the country’s debt. The World Travel and Tourism Council (WTTC) forecasts that tourism taxes, which accounted for US$1.64 billion in 2010 (9.7% of all taxes on travel and tourism), will account for 10.7% of global taxation revenues by 2020 (Larry Dwyer). Hawaii imposes a transient accommodation tax (TAT), which generated US$284.5 million in 2010; part of this goes to the Hawaii Tourism Authority for tourism development. Tourists, who are forced to pay a total of 13.5% tax, including 9.25% TAT and 4.25% general excise tax, continue to come to Hawaii for vacations, and the number of visitor arrivals are growing. Okinawa can also benefit from this additional taxation to support its infrastructure and local community. Future Research Further research is recommended to validate the framework explained in this paper. When building a destination brand, it is important to engage with key stakeholders at the beginning. Through doing so, the gap between stakeholders and visitor perception can be identified (WTO and ETC, 2009). This should be the “bottom-up approach” rather than “top-down” to avoid bureaucracy and create flexibility to face complex matters. The debate over the introduction of tourism taxation should be explored further. A cost analysis and case study, if available, about other destinations that adapted this policy can be conducted. Taxation is a specific area that takes expertise and special attention to come up with the right strategy to sustain the industry. Also, it is encouraged to study empirically about infrastructure and superstructure, new market segments, human resource development, and brand identity in order to create awareness about the importance of tourism in the local community. Read More