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Saturday, June 19, 2010

Canadian keeps options open via multitask tack

Osaka-based entrepreneur Ray Kruger believes in perseverance as way forward


By JANE SINGER
Special to The Japan Times

When Osaka-based entrepreneur Ray Kruger, 60, takes a break from a 70-hour work week to reminisce, his stories command attention. He explains about the haunted Buddhist temple he owns in the mountains near Kameoka, Kyoto Prefecture, a 440-year-old registered national treasure still used for occasional funerals and village rites, and his hilltop villa on an island in the Seto Inland Sea, where he brings friends and employees for water skiing and boating.

News photo
Ray Kruger works at his office in Osaka. JANE SINGER PHOTO

He details visits to 90 countries and recounts the ups and downs of a former friendship with Hollywood action star Steven Seagal when Seagal was just a guy running an aikido dojo down the street from Kruger's office. He also describes the less glamorous aspects of operating a 21-employee travel agency and an English-language school at a time when many of his competitors have not survived.

Thin and wiry, with a shock of gray hair, Kruger exudes a low-key and friendly intensity. He grew up in a small town in northern Alberta, where his father ran a machine shop. After university in Alberta he and a friend motorcycled throughout the United States and Mexico, the first in a series of jaunts that would take him to dozens of countries over a seven-year period.

In 1970 he worked in Hawaii, then jumped on a ship to Japan to visit the Osaka Expo. After hitchhiking around the country for several months, he took a ferry to Taiwan, where he taught English and decided to pursue a master's of art in Chinese culture in Taipei. "Unfortunately Canada had just recognized mainland China at that time," he explains, "so the embassy left (Taiwan). No embassy, no study visa — I also had to leave."

Next came travel around Southeast Asia, Australia, Europe, India (where he nearly died of amoebic dysentery in Kolkata), the Seychelles, Africa and Israel. He says of that time: "I was seeking knowledge — I wanted to see local architecture and learn different languages. Europe was mind-boggling. The best education I could get. Believe me, travel the world for seven years and you'll have a Ph.D. in history and culture."

In 1974, Kruger taught English for six months in Kyoto before living in Australia for two years. Finally, in 1976, the peripatetic traveler returned to Canada for a year. "But I was bored with life there," he says. "I had loved Japan — I had never seen the sea until I was 20 and I discovered that I loved seafood. My eyes had been opened."

In 1977, he returned to Japan and began teaching high school and private English lessons in Osaka. He adds, "In 1979 I decided to open a business so I'd have more job security." And not just one business: Kruger decided to open a store for used English books, a travel agency and a language school at the same time, reasoning that if one failed the other two could sustain him.

News photo
Ray Kruger (second from right) poses with members of a tour group before taking off on the first flight to leave the Kansai International Airport in 1994. COURTESY OF RAY KRUGER

No Japanese bank would provide a loan so he borrowed money from friends: "One Japanese friend fronted me his life savings of ¥3.5 million, saying only that he wanted the money back when he got married." With about ¥5 million in startup capital he opened Academy Travel, Academy Eikaiwa English School and a store for used English-language books (which closed after 20 years) on two floors of a building in the Juso district, with two part-time employees.

From seasoned customer to purveyor; the travel business seemed like a perfect fit. But after two years of working 90- and 100-hour weeks at the office, while also teaching English to make needed cash, Kruger was ready to throw in the towel. "I was tired of living on one 'bento' (boxed meal) a day; I hadn't eaten meat for six months. But I kept in mind a Japanese saying: ishi no ue ni mo san-nen (three years even atop a rock), meaning that if you persevere, things will get better."

Late one night in 1981, two inebriated Japanese businessmen stumbled up the stairs to Kruger's second-floor office and asked him to teach English. Thinking they wanted an impromptu lesson, Kruger almost refused, but he soon realized that they were asking that his company provide English instruction for their company, an Osaka-based sportswear giant.

"We signed the contract, I hired 10 English teachers and I finally secured enough revenues — about ¥170,000 a month — to enable me to cut out my outside teaching and concentrate on bringing in clients. Within months our office income doubled. Finally, I was able to cut my working hours down to 70-80 hours a week." Kruger resumed his social life: He would attend parties, hand out business cards and field a volley of travel queries the next day.

The travel business was much simpler back then, Kruger says. "In those days, discount tickets to New York in the off-season, for example, could be had for about ¥95,000. Prices rose during the 'shoulder seasons' (July 1-19 and Aug. 16-31) to ¥130,000, then during the two peak seasons (July 20-Aug. 15 and Dec. 20-30), prices would shoot up to ¥210,000. I thought that there was no reason to have such a huge increase in Japan, especially since prices for flights from Seoul or Hong Kong only rose by ¥20,000 during peak seasons."

In 1980, Kruger came up with a plan to capitalize on the price difference by buying tickets from travel agencies in Hong Kong, Seoul or Taiwan for flights originating there that stopped in Japan en route to North America. "I would schedule a departure from Hong Kong a week before the intended Japan departure time, then cancel the Hong Kong-Japan coupon. Suddenly I was able to offer half-price tickets during peak season, and customers, especially families looking for cheap holiday tickets, began flocking to my door."

Eventually some other agencies caught on to Kruger's strategy and by the late 1980s, the airlines finally put an end to the scheme, but those years were sweet, he says.

Kruger tried all kinds of schemes to expand his business, including offering departing English teachers free or reduced-price tickets home in exchange for giving him their classes or private students. Kruger now employs 10 part-time English teachers in his school, which is managed by his wife, a U.K.-educated professional interpreter.

Today Academy Travel serves a client base that is about half Japanese and 65 percent corporate. The main office, in a building that Kruger owns, is in a covered shopping arcade adjacent to Hankyu Railroad's Juso Station, the gritty working class area that was a principal setting for the Michael Douglas movie "Black Rain."

Kruger offers customers a choice of JTB and other Japanese low-cost package tours, as well as customized group tours and other discount fares and services. He advises individuals to choose a set package for nonpeak travel, saying, "More and more people buy online today, but you can only buy what you see, so you don't have the information you need. We'll check all the companies, and more than half the time we can offer you something cheaper than you can find online."

He bemoans the complexity of selling air travel today: "There used to be three airline classes but today we're given 10 different prices for economy class alone. Travel agents are being squeezed by a decrease in commissions from airlines, which are desperately scrambling for every bit of income to stay alive."

Kruger insists that travel agents' customer service and competence, not cheap prices, should be the customer's priority. "Our staff has an average of 15 years of experience. Today's complicated travel systems take a year to learn, so companies with high staff turnover and many new staff can't cut it."

He has sold many one-way tickets home to Westerners living in the Kansai region in recent years, especially with the recent bankruptcies of several English-language schools, but he thinks the foreign population in Kansai has bottomed-out. "I think that 95 percent of the Westerners here will be teaching English in the future as well, but demand should rise as the economy improves," he says.

He advises foreigners who want to start their own businesses in Japan to remember that adage about the rock: "Make sure you believe in your ideas, have enough capital to carry you through for three years, and realize that the odds are against you. I succeeded partly because I was in the right time at the right place. I think information technology is a promising area for foreign entrepreneurs in Japan these days. And it allows you to do business anywhere, not just Japan, while still being able to enjoy one of the world's great cuisines and cultures."



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