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Wednesday, Sept. 22, 2010

Travel industry fears major impact from China dispute


By MINORU MATSUTANI and NATSUKO FUKUE
Staff writers

With diplomatic ties between Tokyo and Beijing turning sour, Japan's tourism industry is increasingly worried that Chinese companies may follow the lead of Pro-Health, a health product maker that last week canceled an incentive tour for thousands of its employees.

News photo
A bite out of tourism: A Chinese tourist poses outside an "izakaya" restaurant in Hokkaido in June. People in the tourism industry fear that strained Japan-China ties could hurt business. KYODO PHOTO

"Apart from Pro-Health, I haven't yet heard of large-scale cancellations by Chinese tourists to Japan. We will not change our activities to lure Chinese tourists, but we hope no other companies follow what Pro-Health did," said Kazutaka Nakajima, an official at the Japan National Tourism Organization.

The travel industry's problems started when Japan arrested the captain of a Chinese fishing boat that collided with two Japan Coast Guard ships near the Senkaku Islands in the East China Sea on Sept. 7. He is being held pending a prosecutors' decision whether to indict him.

The incident has been followed by harsh Chinese government criticism, public demonstrations in China and Pro-Health's decision to cancel its tour.

CITS Japan, the Japanese unit of a Chinese travel agency, said it has seen a few cancellations of Chinese and Japanese customers planning to travel between the two countries next month.

CITS is one of the agencies that arranged tours for Pro-Health employees.

"There is a clear impact" from the diplomatic flareup, a CITS official said, declining to detail the number of cancellations.

The standoff is a particularly harsh blow for the Japanese travel industry, after the government eased the criteria for granting individual travel visas to Chinese tourists in July by lowering the minimum annual income level to 60,000 yuan (about ¥800,000) from 250,000 yuan (¥3.34 million).

With the sluggish economy, Japan is placing a lot of hope on bringing in more Chinese tourists, who have gained a reputation as big spenders.

The average Chinese tourist spends about ¥100,000 on shopping and another ¥100,000 for everything else, including air fare, hotel accommodations and food, according to JNTO.

Pro-Health would have brought some 7,500 Chinese tourists to Japan in October.

JNTO had expected the group to put at least ¥1 billion in the coffers of various companies, including airlines, hotels and department stores, JNTO's Nakajima said.

Japan has been aiming to lure 1.8 million Chinese tourists this year. Nakajima said JNTO has no plans yet to revise that target.

For the year through July, about 868,000 Chinese tourists had come to Japan, according to JNTO statistics.

Some 500 people in Pro-Health's tour were supposed to stay at Hotel Green Plaza Hamanako near Lake Hamanako in Shizuoka Prefecture. The hotel's manager declined to comment on the cancellation's impact.

The Kyushu Tourism Promotion Organization, located in Fukuoka Prefecture, said it is keeping a careful eye on the situation.

Director Shigeto Moto declined to forecast whether the number of Chinese tourists will decline, saying the fishing-boat incident is a political matter.

The travel industry's woes are likely to continue because Japan will probably indict the captain of the Chinese vessel, Meiji University professor Masaru Takagi said.

If he is indicted "China will intensify pressure on Japan, and there will be more companies like Pro-Health," Takagi said. "The bilateral relationship will get worse as there is no reason it will get better."



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