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.
Mr. Hirabayashi of H.I.S. Pledges to Overhaul Business Model Eyeing
Future Global Operation
Mid-March 2008
The board meeting of H.I.S. nominated on February 29 Akira
Hirabayashi, director and general manager for Information Systems, to
assume the presidency as of April 1.
At the press interview held the same day after the announcement,
he declared his resolve saying, "I am honored to succeed the great
assets of excellent business infrastructure, high recognition of the
corporate name, and the status of a listed company at the Tokyo Stock
Exchange's First Section. My commitment is to overhaul the exiting
business model and start it over from scratch so that our company can
win continued support from our customers."
He further expressed his decision to vitalize the organization by
assigning competent young staff to responsible posts by way of
promoting the human resources development that President Suzuki has
pursued, and also to upgrade the information systems.
Hideo Sawada, executive chairman, commented on the installation
of a new president as part of the personnel rejuvenation and said,
"Every company, in principle, reaches maturity in nearly 30 years,
and H.I.S. has been on a growth track for 28 years. We would be
viable in this way for a few more years, but needs to be reborn in
order to be ready for the global combat."
He also pointed out that the company's momentum for double-digit
growth was somewhat waning, so it must restore the strength for
keeping the same pace of growth. This is why he appointed a new
president who is expected to lead the company with new thinking and a
new method. In addition to Mr. Sawada's backup, president Suzuki and
senior executive director Namekata - both being charter members - are
supposed to give full support to the new president as executive
advisors.
Mr. Sawada has this to say about the new president: "His youth,
vigor, and freshness are the requisites for the coming age. Since I
have long experience of being a president, I will give him necessary
advice when he needs it. But I expect him to become capable to steer
the company in great style in a year or two."
H.I.S. is known for its young workforce as their age being
between 27 and 28 on an average. The new management appears to effect
major reforms inspired by the venture spirit at the time of the
business start-up, while reminding the employees that there still lie
big business chances ahead.
Mr. Hirabayashi says that he wants to change the corporate
structure from top-down hierarchy to a group of business ventures
where power is delegated to managers. In this context, it may occur
frequently from now that competent young leaders are singled out for
outstanding promotion.
Through revitalization caused by structural changeover, the
company intends to strengthen the corporate foundation for handling
domestic and inbound travel as well as outbound travel.
With regard to remaking the business model for the future, Mr.
Hirabayashi indicates the direction of reforms by saying, "We will
review all aspects of business processes including domestic and
inbound travel, but will focus on individual's free-style trip at the
end of the day." He means to say that he will reinvent the company
keeping the H.I.S.'s starting point in sight.
He acknowledges the imminent task is to increase the Internet
business by inviting more customers to the website and to realize
crossover of real store and online transactions. He also asserts,
"The boundary between travel industry and information industry is
disappearing. There is clearly an area of information-oriented
business where we can step into, other than selling the travel
products after sourcing and combining components with markup put on
them."
* Globalization in a H.I.S.'s way
In reference to business globalization, Mr. Sawada is quoted as
saying, "We have set up 70 overseas branches to secure necessary
outposts. What is required next is to expand geographical area of our
operation."
He takes up the Bangkok office as an example and says, "It is
counted as one of the best three in Bangkok or even in Thailand. We
aspire to make it No. 1 there." Other branches are expected to follow
suit in the same strategy.
Overseas travel markets in Asian countries are rapidly growing,
and so are those in Europe and the Middle East. In view of the
situation, he is hopeful of establishing several regional
headquarters at key locations outside Japan in anticipation that
sales generated abroad will make much bigger share in five or 10
years from now. He seems positive in developing offshore business in
the vibrant overseas markets but is reluctant to give details of this
matter and just says it is up to the next president.
The overseas maneuver is not likely to start off immediately. Mr.
Sawada maintains that the priority for the new president is to tackle
the Japanese market successfully, including the system upgrade, in a
bid to ensure two-digit growth every year and, after that, overseas
project will get on the move.
NTA Postpones Shares Listing beyond 2008, Aims to Book 1,060 Million
Yen in Net Profit This Year
Mid-March 2008
At the earnings report session for the fiscal year 2007 (January
1 - December 31), Nippon Travel Agency (NTA) announced that it would
postpone the stock exchange listing until sometime after 2008. The
decision was made on the ground that, following the downward revision
of the estimate, the business results actually ended in net loss of
596 million yen for 2007 because it had to take provision of 2,700
million yen for the prepaid travel coupons as an extraordinary loss.
When NTA announced Midterm Business Plan from 2008 to 2010 back
in January, Akira Kanai, president of NTA, stated, "Posting a loss at
the bottom line does not meet the initial listing requirements of the
Tokyo Stock Exchange Second Section. In my understanding, however,
deficits caused by a change of accounting rules are treated as
exceptional." He therefore suggested that NTA could possibly go
public in 2008.
Now he cares much about investors' attitude toward a
deficit-ridden company in the stock market even if it gets
successfully listed. Furthermore, as the required level of internal
control has generally become much higher, he feels compelled to
tighten the surveillance all the more.
Now he will see to it that the midterm business plan is strictly
accomplished year by year and that profit level and internal control
is assured enough to qualify the listing, then the company goes on to
make an application at the earliest possible date.
* NTA Aims to Restore Profitability in 2008
In the financial statements for the fiscal year 2007 ended in
December, NTA posted 63,503 million yen in operating revenue, down
6.7 percent from the previous year, 1,293 million yen in operating
profit, down 45 percent, 2,319 million yen in current profit, down
32.6 percent, and 596 million yen in net loss. For 2008, the company
expects to book 67,000 million yen in operating revenue, up 5.5
percent, 2,630 million yen in current profit, up 13.4 percent, and
1,060 million yen in net profit.
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