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Saturday, May 1, 2010

Government, industry join to promote luxury travel

Staff writer

From a helicopter ride to see the crater of Mount Fuji to an exclusive entrance to a renowned historic temple, luxury travelers demand rare experiences.

News photo
Hands-on: Foreign travelers are shown noh masks at a theater in Kyoto in February. MINISTRY OF ECONOMY, TRADE AND INDUSTRY

Providers of luxury travel services in Japan have seen their sales jump in the past two or three years, noting that Japan has gradually developed a reputation as a destination for luxury travel thanks to the government's belated support. The industry is expected to keep growing as its efforts to come up with attractive tours and its marketing strategy have finally come together.

"The government and the industry's recent collaboration to develop travel content and sell them to wealthy foreigners has made it easier for us to sell Japan as a travel destination," said Erika Sawa, of Jetsetter Co., which arranges tours for foreign luxury travelers.

The definition of luxury travel is vague, companies all have their different standards.

JTB Corp.'s Boutique JTB defines a person spending ¥1 million excluding air fare per stay as a luxury traveler. Jetsetter and Private Concierge Inc., another luxury travel company, say most of their customers would be considered luxury travelers because they tend to require full-time concierge service or use their private jets. Boutique JTB and the other two companies declined to disclose their sales.

On an annual basis, global sales of luxury travel amount to $150 billion, Jay Martens, president of Sydney-based Lucioles, an organizer of travel-industry trade shows, said in Tokyo during a recent visit. Luxury travelers account for only 2 percent of all travelers worldwide in number but 20 percent in monetary value, he added.

"You can't ignore this market. Japan has to do more to brand itself as a destination of luxury travel," he said. There are no statistics on the size of Japan's market.

Luxury travelers here tend to visit the same sites as ordinary travelers. They like to stroll the old streets of Asakusa and visit the Tsukiji fish market in Tokyo, or soak in the hot springs in Hakone, Kanagawa Prefecture, and take in the temples in Kyoto. They tend to focus on cultural experiences and spend millions of yen on paintings, kimono and traditional crafts, as well as pay for train and cab fare for a concierge to deliver a particular English newspaper from Tokyo to Kyoto, according to the two companies and Boutique JTB.

They said their business is resistant to recession because they don't target the mass market and wealthy people's appetite for new experiences doesn't fade.

The recent boost is due to the belated start of government support, which the industry says is far behind other countries. According to people in the industry, the government and the private sector have to keep promoting Japanese luxury tourism.

The Ministry of Economy, Trade and Industry began a project to promote luxury travel in 2006, set up a Japan booth for Japanese travel-related companies at the International Luxury Travel Market in Cannes in 2007, and held a trade show, the Japan Luxury Travel Forum, in Tokyo in October 2008 and in Kyoto in February this year. In the JLTF, the ministry invited travel-related companies in Japan as well as from overseas.

METI handles promotion of luxury travel while the Tourism Agency is in charge of inbound travel in general, Takeharu Jofuku of the ministry's Commerce and Information Policy Bureau said. The bureau's mission is to bring in foreign money, while the Tourism Agency's mission is to bring in people, he added.

"We want to support Japanese luxury travel business. We want to meet the needs of foreign wealthy travelers by building a network of Japanese companies," Jofuku said.

While taking advantage of the government's support, luxury travel companies said Singapore and other countries had organized trade shows and supported companies long before Japan did.

Government support was late in coming because domestic demand was sustaining the travel market, and thus the government didn't have to do much until recently, Jofuku said.

But now the situation is changing as domestic demand softens as the population ages. Meanwhile, countries such as China and Russia have seen a sudden surge of wealthy people, opening up an opportunity for Japan to solicit foreign luxury travelers, he said.

But there is still a lot more the government can do, travel companies said.

For example, people flying here on private jet have to wait in line to go through immigration, while airports in some other countries allow passengers to use express lanes as long as they pay several hundred dollars, Ayako Inaba of Private Concierge said.

Boutique JTB's Yuriko Endo said she wants the government to make it easy for foreigners to obtain tour guide licenses because her customers tend to prefer guides of their nationality instead of Japanese who speak their language.

Shangri-La Hotel Tokyo Director of Sales and Marketing Stanley Tan said the Japanese government needs to be as aggressive as other Asian governments in trade shows overseas.

"If Japan says 'we welcome you,' Asian countries say 'we want you.' " Tan said.

"When we go overseas, we have to sell Japan first, not Shangri-La Tokyo. So we are doing a job the government is supposed to do," Tan said, adding that when he went to the Middle East, he realized people there don't visit Japan simply because they aren't aware of the country's beauty.

Next January, the Sydney-based Lucioles will organize a luxury-travel trade show, Blossom Japan, the first such private-sector show in Japan.

Lucioles' Martens agreed with other travel-related companies in Japan that the country is a very attractive destination for luxury travelers. Japan has so many places to see, from Hokkaido to Okinawa, its hospitality is world-class and there are more restaurants with Michelin stars than anywhere else in the world, he said.

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