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Major Tourism Slump Worldwide, post-Japanese Disaster

It should come as no surprise that, in the wake of Japan's earthquake and tsunami, travel to Japan has come to a halt.

The Hong Kong Travel Industry Council has announced that all tours from Hong Kong to Japan are canceled until mid-April. Meanwhile, the National Tourism Administration in Mainland China has warned against tourism. Tour agencies in South Korea have also reported that many vacation packages are being canceled.

The impact on the Japanese economy is bound to be staggering. For 2011, most analysts had predicted that travel and tourism would make up 7 percent of Japan's GDP, or around $409.4 billion. That was before the nuke crisis.

The fallout on tourism is being felt way beyond Japanese borders, too.

So what does that mean to business travel in Japan? Initially, it flatlined.

But it will come back, slowly but surely, because Japanese industry desperately needs to ramp up the supply chain. And even more important, businesses in Japan are trying to figure out a way to make up for the dropoff in foreign exchange caused by the lack of tourists.

A check of major chain hotels throughout the country, with the exception of the northeast region of Japan, reveals all hotels are open and operating, and have very low occupancies. Most airlines are operating into both Narita and Haneda airports in Tokyo.

One by one, travel providers are beginning to discount. A quick search shows that in mid-April (which, incidentally, is peak cherry-blossom season in Japan), flights from Los Angeles and New York to Tokyo costs less than $1,000 round trip. Business-class seats are still pricing high, around $4,000 to $5,000. So this is actually a great time to employ an age-old trick: buy a coach ticket and use miles to upgrade.

In situations like this, the traditional response has been for the tourism industry to discount. But in this case, discounting may not be enough. The travel industry will need to offer value-added deals and experience to entice travelers.

What would make you consider taking a business trip to Japan now?


Photo credit: Flickr user JanneM
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