Japanese Tourism Industry Market Entry Opportunities for Swiss Companies

Sabine Kampmeier/ PM&P Bern

December 3rd, 2015

Photo: JNTO

2

Japan’s Comeback

Attracting foreign companies

Attracting foreign visitors

Becoming a tourism nation

Ease visa regulations

Improve immigration procedures

Expansion of LCC

Improve infrastructure

Japan is

back

3 Becoming a Tourism Nation

Outbound

Domestic

Inbound 20 mill. travellers in 2020

30 trillion Yen in 2020 (+36%)

20 mill. visitors in 2020

Source: JETRO

Image Source: Wikipedia

4 Some Information About PM&P

Consulting company specialized in international expansion and strategic FDI

3 offices: Frankfurt, Munich, Berlin

Team of industry experts of different sectors

Current investment promotion initiative with JETRO

5 Japanese Outbound Tourism mainly to Asia

Source: JETRO & JNTO

8th “top spenders business & leisure trips”

3rd biggest business travel market outside Europe

17% of population travels abroad

6 Japanese Outbound Tourism Offline/Online

Market Players Foreign Market Entry

Expedia (USA) 2006

Booking (NL) 2009

Shanghai Spring International Travel (China) 2012

CTRIP (China) 2014

Airbnb (USA) 2014

Agoda (NL) 2015

Source: JETRO, based on Japan Tourism Agency estimations, 2013

7 Japanese Outbound Tourism

Opportunities

Opportunities for Swiss Companies Hotels DMCs Tour operator Activities Attractions Shopping tourism OTAs Business travel

Image source: Süddeutsche Zeitung

8 Market Entry: HRS – Hotel Reservation Service

Company: Hotel Reservation Service GmbH, Germany

About: Worldwide hotel reservation system for business and private travellers. Database > 250.000 hotels in 190 countries. Business travel platform delivers BT solutions & travel expense management.

Year: 5/2014 Project: Subsidiary Tokyo and launch of web

portal.

Links: www.hrs.com

9 Japanese Inbound Tourism with Strong Growth

2015: as per Oct. 31st: 16,31 million tourists The aim of 2020, 20 million tourists, is within reach in 2015!

2015

Source: JNTO 2015

10 Japanese Inbound Tourism Mainly from Asia

77% of all guests come from Asia

Only 5 % come from Europe

Source: Wikipedia

11

Inbound Tourism Growth Areas

Transport Shopping Tourism

Leisure MICE

Cruises

OTAs

Tour Operator

Japanese Inbound Tourism Growth Areas

Accomodation

12

Transport

5% of global air traffic

10% of global airline industry’s revenues

Haneda: 5th biggest airport of the world

Airport privatization under way

Infrastructure: terminal buildings

LCC market entries (Asia)

Image source: JNTO

13 Opportunities in the Transport Sector

Opportunities

Low Cost Carrier MRO

Airport Technology &

Equipment

Passenger & Air Traffic Control Systems

Security Systems

Airport Shopping

Conveyor Technology Catering

Image source: JNTO

14

Tour Operator Offering Japan as Destination

5% of visitors are from Europe

Recent news from European operators

TUI: several tours

Hauser: Skiing in Japan

Etc.

Opportunities

15 Japanese Inbound Tourism

Ryokan Japanese Hospitality

“What do you plan to do in Japan?”

“Eat Sushi”

16 Japanese Food and Shopping Are Important

Ryokan Japanese Hospitality

“What do you plan to do in Japan?”

“Eat sushi”

“Go shopping”

Eat Japanese food 69%

Go shopping 53%

Sightseeing 37%

Walking in shopping districts 36%

Bath in a hot spring 33%

Drink Japanese alcohol 21%

Stay in a Japanese style inn 19%

Source: Consumer Trend Survey, Japan Tourism Agency

17 Shopping Tourism as a Driver

Shopping surpassed accommodation in travel expenditure

Travel expenditure +43% (Chinese +133%) Duty-free shops doubled in one year to 9.361 Luxury brands re-enter market

> Opportunities for Swiss luxury brands

Source: JETRO NEWSLETTER, based upon consumption Trend survey for foreigners visiting Japan

18 Leisure Industry Is Huge

Leisure Market 64,7 trillion YEN 539 billion CHF

Amusement Parks The Wizzarding World of Harry Potter 2014 Legoland 2017 Restaurants Heinz Beck 2014 Blue Bottle Café 2015 Carl’ s Jr. 2015 Guzman y Gomez 2015 Shake Shack 2016 Shopping Luxury brands Sports equipment, esp. running

Image source: Tokyodisneyresort.jp

19

Japanese Inbound Tourism

Ishizuchiyama Onsen

Onsen The Soul

of Japanese Wellness

Source: JNTO

20

Most Accomodation Units Are Ryokan

Matsue Shinji-ko Onsen

Ryokan Japanese Hospitality

65% of units 14% of rooms

Source: JNTO

21 Only a Small Proportion of Full Service Hotels

Nikko Hotel Tokyo

3% of units 18% of rooms Full Service Hotels

Source: JNTO

22 Most Rooms Are in Limited Service Hotels

Limited Service Hotels: 18% of units - 56% of rooms

A special kind of Limited Service Hotel

Source: Die Welt

23

Hotel Occupation Rates High and Going Up

Occupation rates Full Service Hotels certain cities: > 85%

ADR

REVPAR

Request for international brands

33.1%

49.4%

52.9%

34.7% 35.5%33.7%

41.2%

53.3% 52.6%

46.8%48.0%

52.3%

59.4%67.2%

68.3%

62.3%

67.3%

69.5%

59.3%

71.1%

75.7%

67.1%

72.5%

75.7%

41.6%

31.6% 32.3%30.6%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013

Ryokan Resort Limited Service Full Service Others

Source: JETRO & JNTO

24 Accomodation

2015: 78 new hotels - 13.000 rooms

Tokyo: 4th most attractive real estate market of the world

25

Accomodation (back up)

Hotel Name OpenNumber

of roomOperation Owner Owner's profile Operator Note

Shangri-La Hotel, Tokyo 2009 200 Leasing Mori Trust DeveloperShangri-La

International Hotel

Management

Opened on selected floors of

redeveloped office building

The St. Regis Osaka 2010 160 Leasing Sekisui House Corporate St. RegisOpened on selected floors of

redeveloped office building

InterContinental Osaka 2013 272 MCNTT,ORIX

OthersDeveloper IHG Japan Osaka

Opened on selected floors of

redeveloped office building

Tokyo Marriott Hotel 2013 249 MC Mori Trust DeveloperMori Trust Hotels &

ResortsRebranded in 2013

Osaka Marriott Miyako

Hotel2014 360 FC Kintetsu Railway company

Kintetsu Hotel

Systems

Opened on selected floors of

redeveloped office building

The Ritz-Carlton, Kyoto 2014 134 Leasing Sekisui House CorporateThe Ritz-Carlton

Hotel Company

Scrap and build new hotel

property

Andaz Tokyo 2014 164 MC Mori Hospitality Developer Mori HospitalityOpened on selected floors of

redeveloped office building

Four Seasons Hotel Kyoto 2014 186 LeasingBerjaya Group

（Malaysia）Global investor The Four Seasons New hotel property

Aman Tokyo 2014 約80 Leasing Tokyo Tatemono DeveloperAman resorts

International

Opened on selected floors of

redeveloped office building

Market Entry by Foreign Hotel Companies

Source: JETRO & JNTO

26 Opportunities in the Accomodation Sector

Seismic Retrofitting

Ecologic Hotel

Software (PMS, IBE, Channelmanager)

Technology

Hotel Equipment

2015: 78 new hotels 13.000 rooms

Opportunities Hoteliers school

27 Revolution in Hospitality? – Henn-na Hotel

Source: OE24.at

Source: easyvoyage.de

Source: web.de

28

Japanese Hospitality

Source: www.wattention.com

29 MICE Major Events

2020 Olympic Games & Paralympics

2019 IRB Rugby World Cup

2017 Asian Winter Games

Tokyo: Builds 4 big sports clusters

Host international sports competitions

Increase conferences by 50%, become top hosting nation in Asia (2012: 731)

Image: © Getty Images

30

Revolution in Hospitality?

Source: OE24.at

31 Opportunities in MICE

Conference management

software & systems

Visitor access systems

Equipment

Security Systems

Ticketing Platforms & Systems Example: Ticketbis SL/Spain

Building Language & Translation

Opportunities

Image: © Getty Images

32

Cruises

Annual growth rate in port calls 31% (2013 + 2014)

Carnival Cruise Lines opened office in Japan

International cruise companies to allocate vessels in Southeast Asia with calls in Japan

Domestic cruise market #1 in Asia, #11 worldwide

Source: Asia Cruise Trends 2014

33 Overall Trends in Travel & Tourism

Source: sustainablebrands.com

• Couchsurfing • Carsharing • Uber?

• Carsharing: Toyota • Uber?

Source: zacjohnson.com

Long Tail

• Airbnb • specialized OTAs/TOs

Source: mazeberry.com

Source: teiet.org

Overall Trends

34 Conclusion: Market Entry Opportunities

Outbound Inbound

Hotel Hotel

OTA

(Luxury) Consumer Brands

TO DMC

Activities

Attractions Supplier

MICE

Image source: sayfc.org

35

Thank You

Sabine Kampmeier PM & Partner (Senior Consultant) Email: sabine.kampmeier@pm-p.de Phone: +49 541 38594545 Cell: +49 176 78335846

Thank you for your attention

Image source: www.wattention.com