00:00Tell us a little bit about the trend that you're seeing as the Japanese tourism market sort of matures now.
00:05Thank you for having me, Sherry.
00:06So Rakuten Travel Exchange is a part of Rakuten Travel, which is one of the largest travel agencies in Japan.
00:12So naturally, we have massive data points indicating the traveler demands in and out of Japan.
00:17So unlike the macro demands, we we record some like historical like a record high bookings in from January to
00:27May this year, which is a 30 percent year in your growth.
00:31But I heard that the market is a little bit struggling because of the some declining of the demand.
00:36But we see a pretty strong and healthy demand, especially this summer season.
00:41We see a 77 percent year in your growth compared to last year, especially September because of the Aichi Nagoya
00:47Asian Games, as well as a little bit longer holiday in Asia region.
00:51So we see a 233 percent year in your growth.
00:54Yeah, the Asian Games are coming up in September, right?
00:56What about that whole trend in Japan?
00:59Because we have seen, of course, foreigners being very much willing to come to Tokyo.
01:04But what about other regions across the country?
01:07Yes, that we called a golden route coming from Tokyo to Kyoto and Osaka.
01:12So that was originally the top destinations.
01:15But this year we start to see the increase of out of that golden route.
01:19The golden route, we still see 23 percent year in your growth.
01:23But out of golden route, we see 80 percent of your year in your growth.
01:27I have to wonder how much that is just because it's so crowded in that golden route these days, right?
01:32I mean, how much has that to do also with a weaker Japanese yen?
01:35Yeah, weaker Japanese yen, definitely it helps some driving the demands to Japan.
01:40But that is not the only factor, I think.
01:43The Japanese government, they prepared this kind of inbound tourism plan beginning of like late 2000s.
01:50And 2010 and going forward, they established multiple laws to promote this inbound trend.
01:57I think they are now cherishing their efforts together with the Japanese yen.
02:03The issue with the Japanese government is that it also has issues with China at the moment geopolitically, right?
02:08How much of an impact is that having on inbound tourism?
02:11Yeah, so inbound tours, a macro perspective, China demands dropped 56 percent year on year until May, year to date.
02:18But the other nationalities, they make up some gaps.
02:23So other nationalities such as Taiwan coming from our rocks and travel, we observe 156 percent year on year growth.
02:31So that is recovering some gaps.
02:35But it's not just about the tourist, a number of tourists.
02:38Actually, for the revenue perspective or spending perspective, so longer haul destination, the origins, we see more demand.
02:46So it will fill the gap and will give us more revenues as well as spending for the overall tourism
02:54economies in Japan.
02:55I was going to say, I mean, because when it comes to tourism, it's not necessarily about just the volume
03:00and the masses, right?
03:01It's also about luxury spending.
03:03Correct.
03:03What sort of shift are we seeing there and what are you hearing from places where tourists go spend, like
03:08hotels?
03:09Yes, we also see 80 percent, 88 percent of year on year growth in the premium hotel bookings, which translate
03:17that my comments about the spending, total spending is increasing, although the number of visitors are a little bit flattening
03:25compared to last year.
03:26Do you expect this to be a more permanent structural change in the composition of tourism to Japan or is
03:32this just a blip because of geopolitical issues?
03:36Yeah, I think we also need to remember the last year we had a Osaka Expo, which was one of
03:41the largest events in Japan.
03:43So we expected this kind of some plateau in the demands, but we see that this is a kind of
03:49like a game changing moment that Japan tourism like evolves the next chapter that allowing the more like a high
03:58spending travelers coming to Japan.
04:01But when the when the China demands comes in, then they will see another boost of the inbound tours.
04:06Do you think policies such as dual pricing for foreign tourists could be a threat to this boom?
04:14I think some of we already conducted some research with the hotel partners, especially in Tokyo metropolitan area, some nearby
04:23Tokyo, they are willing to have that kind of dual pricing policy.
04:27But hotels in Japan, they are already offering the cheaper price or better price to the inbound travelers at this
04:32moment.
04:33So I think it depends on the hotels policy, but I don't think the government will not recommend some certain
04:41policy over the tourists.
04:43So what are the plans for Rakuten Travel Exchange now?
04:47Our plan is focusing on our globalization.
04:50So not only for targeting the nearby countries regions, we also targeting U.S. travelers, European travelers all over the
04:57world.
04:57That's the reason why we see that our gross is better than our overall market.
05:02Also, we are focusing on using AI to improve our operations.
05:07And also, we also focusing on the revenues and high, high demands, high spending customers.
05:14So we see the very good result of the premium hotels now.
05:17What are the opportunities in the U.S. and European markets and how difficult is it to really penetrate?
05:23So U.S. and European markets, the most difficult portion this now is because of oil price, as well as
05:31some geopolitical issue.
05:32That prohibits some travels or decrease the demand of the chances of getting the flight.
05:40But that means that more affordable travelers, they come to Japan, naturally their spending is higher than usual.
05:47So.
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