Discovering Future Red Sea Opportunities and Japan’s Soft Power


When you land at Haneda Airport, the first thing you notice is how busy it is – from immigration to customs to the taxi rank – even though it’s 10pm. I think I waited almost an hour for a taxi, and I’m not complaining – I’m just grateful to be able to travel to Japan again without any restrictions.

A similar sense of gratitude and happiness upon return from travel is palpable in WiT Japan and North Asia. Eijiro Yamakita, head of the Japan Tourism Agency, admitted, “It’s great to see tourists in Japan again.”

Walking around Tokyo, it’s easy to believe that everything is the same — there are still long lines outside pachinko parlors, ramen shops are packed and full of snorting — but clearly, something has changed. You just have to look deeper.

As Aya Aso, co-founder of WiT Japan & North Asia, noted in her opening remarks, “…during this pandemic, travelers are disappearing before our eyes, tourism seems to have stopped, but in the shadows, There are some great people who never stop and are building the future…”

The following are the main points of WiT Japan & North Asia 2023.

Japan – soft power, new middle class, red ocean

Economist Jesper Cole shines a light on Japan’s soft power – with 10 of the 25 highest-grossing media franchises of all time, including Pokemon and Hello Kitty top two. Unlike many Western countries, China is not a “winner takes all” when it comes to household wealth – 49.5% of the total wealth of 26.9 tons is in the top 10%, and 18.2% are in the top 1%. Compared with the total wealth of the United States which is 126.3T, 75.6% of people are in the top 10%, and 35.3% are in the top 1%. (Credit Suisse Global Wealth Report 2020)

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Jesper Koll: “Of the 25 highest-grossing media franchises of all time, Japan has 10, including Pokemon and Hello Kitty.”

Despite an aging and shrinking population, Japan has a new middle class for the first time in 20 years — rising from 32.78 million in June 2014 to 36.64 million in April 2023, he said.

Another unusual aspect of Japan is that there are “no superstars” when it comes to business. Unlike the US, where the top four companies capture revenue share, Japan is a “red ocean of many companies,” which is why foreign companies find it so challenging to enter and penetrate the market. In Japan, working-class rule meets superstar CEOs.

He concluded by saying that the new Japan is a first-rate powerhouse with wealthy businesses and wealthy consumers, a new middle class, a lifestyle superpower and a bastion of policy stability.

Building the digital consumer journey requires trust, and North Asia has the edge

During a panel discussion on ‘New Technologies Changing Travel’, Timothy O’Neil-Dunne, Head of T2Impact, stated that no matter how complex the technology, the biggest challenge is ‘honesty – distributing trust in an age of trustlessness’. That’s why travel journeys are so fragmented, and travelers must continually hand over their data at each location. The only solution is for the various silos, including airports, airlines and hotels, to cooperate to create a digital chain that governments can trust, and North Asian societies, he argues, may have an advantage in this regard. (see related article).

Jongyoon Kim, CEO of Yanolja Cloud, said that South Korea is making good progress on this front, and that the continued decentralization of the cloud will lead to “digital transformation, including kiosks and IoT ‘travel journeys’ across the industry.” He believes that, South Korea, with its high level of trust in institutions, is likely to take the lead in integrating the digital customer journey.

takeaways tim

Timothy O’Neil-Dunne: No matter how complex the technology, the biggest challenge is “honesty – distributing trust in an age of trustlessness”

Sarah Samuel, Senior Vice President, Airport and Airline Operations, Asia Pacific, Amadeus, said: “With the upcoming digital transformation of airlines and airports, we see greater room for collaboration. A simple example is the list of services offered by airports – How do we digitally enable these services to be available in the digital booking channels of all airports that operate from this airport – so – for all travel agencies that book travel packages for passengers.

“Where will this collaboration start? Based on our conversations with airports and airlines, we believe that collaboration will start with sharing data and services as part of disruption management/service restoration.”

For global OTAs, Japan and North Asia are the best bets

Michael Dykes, Expedia Group’s Vice President of Market Management Asia Pacific, is a believer in demography, pointing to the fact that “by 2030, two-thirds of members of the middle class are expected to be Asian” and that “by 2050 , approximately 40% of the populations of Hong Kong, South Korea and Japan are expected to be aged 65 and over.”

“This is opportunity,” he said. “It’s not just for more people, but these travelers value the experience more than the price.”

It is worth noting that the OTA market, which currently accounts for 43% of accommodation TTV in Japan, will surpass the offline market for the first time in 2023, said Hiroto Ooka, vice president of Agoda Partner Services North Asia. Japan remains strong at 44%, with the OTA market expected to become the largest channel in 2023 as the COVID-19 pandemic pushes more consumers online. “

takeaway dykes

Michael Dykes: “By 2030, two-thirds of the middle class is projected to be Asian.”

He pointed out that “a new dawn of young travelers will help drive app usage and redefine the online booking experience” and therefore, “OTAs need to be in a good position to combine the best of technology, comply with local regulations, and Tempo, adaptability, quickness.”

Reno Wang, general manager of Hopper Asia, said mobile devices will drive most of the growth. “With the exception of China, Japan and the rest of Northeast Asia have seen an increase in the share of mobile bookings compared to pre-COVID. Even in Japan, a country with over 30% elderly population, the mobile shift is expected to continue until 2025, Achieved 52% of all online bookings made via mobile devices.”

He also called for flexibility. “Flexibility is key to getting the lowest flight and hotel prices, and most Hopper users begin the travel planning process with some level of flexibility. 60% of Hopper users begin the travel planning process with They are all flexible.”

Akimi Takemura, Regional Director North Asia, Booking.com highlights two opportunities in the Japanese market – 56% of Japanese travelers want to travel more sustainably in the next 12 months and 80% want to go back to simpler A nostalgic tour of the times.

So, pay attention to these keywords: experience over price, mobility, flexibility, sustainability, and nostalgia.

Give full play to creativity and give consumers “new purpose of travel”

Given the current depressed sentiment in the outbound travel market, with nearly all speakers saying Japanese outbound travel has not yet fully recovered, there was a clear call: the industry needs to get creative and encourage Japanese tourists to go abroad again.

JTB’s Yamakita disagrees that “the golden age of Japanese outbound travel is over,” saying, “It’s not just about selling and telling people what to do in places and destinations, but giving people a purpose and a reason to travel— — Sustainability, for example, has become a key factor. How can we combine human creativity with automated tools to give people new purposes for travel?”

The ability for AI to generate itineraries is a good first step, he said, improving back-end productivity and giving employees more time to focus on creativity and packaging possibilities.

Meanwhile, new startups are changing the status quo. KabuK Style, a startup founded in 2019, offers a subscription model based on fixed prices for hotel stays and mystery flights, and has seen widespread adoption by consumers eager for new ways to travel.

CEO Kenji Sunada spoke of how he hopes to spread the message that “diversity is cool” and that his first foray into South Korea has “exceeded expectations”.

takeaway jtb

Eijiro Yamakita: “It’s not just about selling and telling people what to do in places and destinations, but giving people a purpose and reason to travel.

Diversity Is Not Just Cool, It’s Profitable – The Bra Story

During a panel discussion on diversity and inclusion, Expedia Group’s Michael Dykes asked the panelists: “Many people may think that building inclusivity and diversity in the workplace is the right thing to do, but we’re all business people, So what is the right thing to do?” business need or business value Is this achieved through inclusion and diversity? “

Aya Aso, CEO of SAVVY Collective and founder of Ladies in Hotel, said: “With Japan, Korea, Hong Kong and China’s workforce shrinking, it is imperative to tap into as many vulnerable and underutilized groups as possible. Demographic groups. Embracing individuality and inclusion helps the company grow and develops other employees as well.”

Ruth Marie Jarman, chief executive of Jarman International, said that as the customer base diversifies and demographics change, “you need the top levels of the company to reflect that diversity in order to create a diverse market that attracts customers. Sexual products and services”.

She gave the example of a company that makes bras. “That was 10 years ago, and they were trying to figure out how to sell cool bras for summer. The executives were old gentlemen and they didn’t know how to sell them. Then, when they brought in female executives, sales skyrocketed.”

Pasona Group, Japan’s leading human resources firm, made a bold move during the pandemic to shift core functions from its Tokyo headquarters to Awaji Island in Hyogo Prefecture, near Kobe, and relocate about 1,200 employees.

Riho Kato, general manager of the CPU division, said the move is both to expand the business by bringing more people to rural areas and to diversify the workforce. “We have 100 people from 30-40 countries working with us – from young to old, people with disabilities, artists from different cultures and backgrounds, athletes.”

Asked whether recruiting in Awaji was a challenge, Kato said: “Japan is Japan, and it doesn’t matter even if it’s a rural area. In fact, they sometimes prefer it. We want to bring together diverse talent—for example, there are Many professionals have a lot to contribute in retirement and can bring a different perspective to the hospitality industry.”

takeaway diverse

From left: Riho Kato, Pasano Group; Ruth Jarman and Aya Aso: “We have 100 employees from 30-40 countries working with us – from young to old, disabled, people from different cultures and backgrounds Artists, athletes.”

A trickier topic is the LGBTQ community. A 2018 Dentsu study shared by Dykes revealed that 8.9% of Japanese people aged 20 to 59 identify as LGBT, while a recently passed controversial LGBT anti-discrimination law has sparked major social and political debate, making The topic just got hotter. controversial.

Asked about diversity and inclusion and whether JTB would consider moving its headquarters to rural areas to fundamentally change the workforce demographics, JTB’s Yamakita said the idea is not impossible and Japan must find a way to address issues such as LGBTQ group.


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