Japan Travel Trade Weekly News
Keeping you abreast of what's going on in the
Japanese travel and tourism industries.
News consolidated by Travel Vision, Inc. updated every week.
JTB's Next President Tagawa Cites Community Exchange, Globalization,
Internet Business as Mainstays for Reinventing Company
Early-May 2008
JTB Corp. announced that it appointed Hiromi Tagawa, senior
managing director, as the next president of JTB. Takashi Sasaki,
president and CEO, becomes representative chairman and Ryuji
Funayama, now representative chairman, steps down to a
director-advisor. The decision is to be approved at the shareholders
meeting held at the end of June.
Mr. Tagawa said to the press on April 25, "JTB is capable to make
a further growth in terms of the group power and brand recognition.
Next year will be an important year for us because it is the first
year of our next medium-range management plan. I want to heighten our
staff's motivation that is the source of fulfillment of customer
satisfaction and employee satisfaction." He cited community exchange,
globalization, and Internet business as the fast-growing sector in
its business domain on which JTB's future growth rests.
Mr. Tagawa speaks of a tough situation in which travel agencies
are placed now but warns at the same time of the risks of following
conventional ways of business, saying, "It does not stand much of a
chance to produce merchandise routinely and distribute it in the
marketplace. We should be more specific in tailoring products to
customers needs. Travel industries are not sophisticated yet in this
regard, so we must exert ourselves to create demand on our own."
He is enthusiastic about reinforcing the management base of the
total JTB group as a follow-up of the company split-up. In reference
to demand creation, he is of the opinion that travel agencies should
take initiative in organizing tours, for instance, coupled with
charter flights from Haneda (Tokyo) Airport in a move to activate the
market although some risks are involved. Tour operation based on
charter flights could serve more or less to level off the uneven rate
of overseas travel population by prefectural unit. As a way to share
the risks of being a charterer alone, Mr. Tagawa proposes an idea to
set up a joint company with contribution from several agencies for
the single purpose of charter flight operation.
From the viewpoint of maintaining management stability, he argues
that agencies should make more business out of inbound travel from
Asia and offshore traffic between the third countries in
consideration of the Japanese market's vulnerability to foreign
factors. In case of JTB, it is stepping out aggressively into the
international market by, for example, establishing a holding company
in China and a subsidiary in Viet Nam, while incorporating inbound
business along with the Visit Japan Campaign (VJC) and outbound
business embraced in the Visit World Campaign (VWC) into the group's
management strategy.
With regard to the Internet-based business, Mr. Tagawa,
reflecting on his experience of having resided in the United States,
says, "I was confident that Internet would become a strong business
tool someday, but it does not necessarily lead to the conclusion that
JTB stores in Japan should be scrapped drastically now. We must find
a way to fuse Internet transactions and real stores' function
together."
He admits the Internet plays a significant role in people's
consumption behavior in the long view but it never happened at JTB
that the existing stores had dropped sales by 20 or 30 percent from
the previous year. Therefore, he would take time in deciding how to
shape the company for the future, probably by sometime in 2010 or
2011 when Haneda is remodeled to facilitate international traffic.
Until then, the company will continue to study the market situation
and make a necessary investment, if necessary.
* President Sasaki's comment on Mr. Tagawa's competency: "He is good
at energizing organization."
Takashi Sasaki, president of JTB, stated retrospectively, "I am
happy because I could pursue and achieve major reforms of the company
at a difficult time by uniting staff's power. After splitting the
company into smaller units, the mission of employees became so
specific that they could devote themselves to customer service and
produce better results. Generally speaking, however, there are so
many problems encircling travel agencies today."
Having said this, he continued by way of giving a reason of
selecting Mr. Tagawa as the next president, "We have enhanced
financial strength. Our next challenge is to reinforce sales power.
So we have chosen a competent person in sales who can lead the group
by integrating the sales network of the group companies." With Mr.
Tagawa's involvement with the Federation of Tourism Industry Trade
Unions in mind, Mr. Sasaki made a comment on him that he is a type of
person who is good at energizing an organization.
Mr. Yoshikawa of KNT Suggests Making Next Midterm Business Plan
Involving All Staff to Satisfy Stake Holders
Early-May 2008
Katsuhisa Yoshikawa, new president of Kinki Nippon Tourist (KNT),
said at the interview with Travel Vision that he was going to draw up
a next medium-term business plan by the end of August. He suggested
the plan would be formulated, not by a top-down approach, but with
participation of all the key staff in every division of the company.
With the view of the financial loss and non-payment of dividends
in the last fiscal year, he is eager to take an initiative to make
the company productive so that it can satisfy all the stake holders
including shareholders, employees, Japan Ryokan & Hotel Association,
partner agencies, and other suppliers.
Since the first-quarter earnings of the current fiscal year did
not come up to expectation, some say capital injection from the
parent company, Kintetsu Corp., would be inevitable. He did not
totally deny the possibility but maintained that making the best use
of the own management resources should be the first consideration.
When the company is in need of extra funds, he said, the management
must decide on the best option from bank loan, bond issuance, or
capital infusion from the parent company.
Mr. Yoshikawa acknowledges that three divisions of the company,
namely, ECC (event, convention, congress-related business),
e-business (online sales), and International Division (inbound
travel), are the fast growing sectors, to which KNT's resources
should be allocated intensively.
He emphasized at the same time that the company is so far
successful in trimming the secondary business of travel and
concentrating on travel agency business itself. In fact, it divested
last year two subsidiaries of Hakone Kogen Hotel and Hokko Daiwa
Taxi, and three other subsidiaries including Oku-Nikko Kogen Hotel
became equity method affiliates and therefore ceased to be
consolidated from this year.
KNT Starts Charter Operation to Rota; Mr. Ochi Comments, "The Way We Should Do."
Early-May 2008
Kinki Nippon Tourist (KNT) celebrated at Narita Airport on April
26 the first flight of the series charter operation to Rota on
Continental Airlines. It scheduled three flights during the spring
holiday on April 26, 29, and May 3, expecting to carry 450 travelers.
KNT has a two-year exclusive agreement with Continental to
charter flights to Rota, and is going to send 6,000 travelers this
year to Rota on 40 flights. It plans 17 flights from July to October,
11 flights from Narita (Tokyo), 2 from Nagoya, 3 from Osaka, and 1
from Fukuoka. Some flights for special-purpose use are programmed
after October, such as for triathlon teams and for a golf tournament.
A flight will be operated from Sendai in wintertime.
Yoshinori Ochi, senior managing director of KNT, comments on the
significance of the programmed charter, saying "Japanese visitors to
Rota number only 3,000 a year, while visitors to Saipan total 200,000
but came to a bottleneck by reduced number of flights serving there.
For visiting Rota, people normally have to stay overnight at Guam or
Saipan for connection. This charter project is therefore something we
had to launch from the view point of offering a direct access and
developing a new destination."
It took KNT more than a year and a half for the preparation of
this charter project. In time for the operation of the charter
flights this time, the runway at the Rota airport was reportedly
extended so as to enable take-off and landing of medium-sized
aircrafts.
Mr. Ochi says, "Rota, embraced in nature, is a perfect place to
spend leisure time. We will explore and develop the tourist
attraction in cooperation with Marianas Visitors Authority, the State
Government, Continental Airlines, and the island folks." He is eager
to develop other destinations in a harmonious way with environments,
local communities and to the satisfaction of visitors, leveraging the
charter flights that will keep creating demand.
Hisaki Taguchi, general manager of Holiday Division Eastern Japan
at KNT, says, "We were somewhat afraid our charter tours for spring
holiday might not be competitive pricewise considering a negative
growth of overseas travelers due to the unfavorable calendar dates,
but we could actually sell them out by the middle of March." KNT
could successfully solicit participants from different market
segments such as families, divers, and golfers.
As far as the forthcoming summer series is concerned, the price
would soon be fixed after watching a movement of equivalent Guam and
Saipan tours, he said, but it is likely that the price will come down
a bit from the level of the spring holiday.
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