 Hello, everyone. Welcome to Looking to the East. I'm your host, Steve Zercher. Thank you so much for tuning in and watching the show. Every couple of weeks or so, we look at various topics in the Asia Pacific area. Today we're going to specifically be focusing on Japan and the tourism industry such as it is right now. We have a very special guest with us. This is a, I guess I could say a long term friend of mine. Professor Tadayuki Hada of the University of Central Florida. He is a Cornell graduate PhD from Cornell so very highly credentialed when it comes from an academic perspective. The University of Central Florida for those of you that maybe have not heard of it is one of the highest ranked sometimes the number one ranked hospitality school in the world. So Professor Hara is very influential in the hospitality industry and in particular, he's very influential when it comes to the hospitality industry in Japan in fact in my opinion. He's probably the most influential person for hospitality strategy, supporting university development to hospitality programs and so forth. And I can say that because I started a hospitality a very modest hospitality program at Kansai Gaida University. And Professor Hara was very, very supportive and very, very helpful to me in the early days. He actually came and visited our campus several occasions and helped us to promote the program so Professor Hara thank you so much for taking time. It's late in the evening you look like you're in Hawaii but we know you're actually in Orlando, Florida, right. Yes. Okay. All right so what I'd like to talk about in this show. You can imagine that just like in Florida or Hawaii, where many of our viewers are the tourism industry has really taken a major hit because of the pandemic which has occurred over the last couple of years. And just briefly, the international tourists who were numbering well into the many tens of millions prior to the COVID infection has been reduced by 98%. These are international tourists so it's basically the international tourism industry has been stopped over the last couple of years and in response to that the hospitality industry has laid off hundreds of thousands of employees to try and save costs because the tourists were not coming in the Chinese tourists American tourists from all over the world. So the last couple of years has been a rough, rough ride for the tourism industry so how does it say I think that that's not debatable but do you have any additional color you'd like to add to top that it's been over the last couple of years and you can talk about Florida to because I'm sure Florida's the same thing. Well, you know we have been hit all over the world, no exception, but the, you know, degree of magnitude of the damage is a little bit different from one place to the other. And I think for the case of Japan, it was more severely hit than other countries back in USA, because I remember 2019 there was 31.8 million tourists, 14 visitors came to Japan 31 million. The rate at 2021, the number went down to 249,000. It's a little bit less than a quarter of a million. So if you look at the percentages, it's 99.2% reduction to 0.8% of what it used to be just two years ago. Right. And that can be attributed to, of course, you know, probably people in Hawaii people in the US knows that Japan decided to take a very strict self-imposed seclusion, a really severe one. For example, I just give you example, you know, which is relevant for you and I. I was a foreign student. In America, foreign students were able to come to the United States to study. We have several cases of Japanese students who came to Florida. And, you know, they took a courses and they already graduated. In the meantime, Japanese government completely refused acceptance of any American students studying in Japan. So this is just one example of how the, you know, level of strictness is different between the US and Japan. There are of course, you know, the two sides of the coins. Japan have only, I think, 19,000 deaths out of the population of 125 million, whereas in the USA, we have 333 million and very close to 1 million. What was that? 926,000 people dead. So, like, it's almost like a two digit difference compared with, you know, the numbers in Japan and numbers in the USA. Right. Another thing I noticed is, of course, if you look at USA, UK, European countries basically in short, their policy has been, okay, let's try to control the number of deaths. If somebody dies, they will never come back. They can be infected, but as long as they live, they don't die, it's okay. That's European or American policy, you know, in a nutshell. However, in Asian countries, they tend to pay more attention to the number of infections. It's almost like, oh, you are infected, that's a big deal. We didn't have to reduce the number of infections. The extreme case of mainland China, they have what they call ZERO COVID policy, which is really the extreme part, but I think Hong Kong is falling. And to some extent, Japan is, or Japan has been taking a very similar policy. Australia used to be, however, as you know, Australia announced, I think yesterday or the day before yesterday, they changed the policy. They decided to leave with COVID just like American government or European government to do. So let's hope that have a little bit of effect over the decision of the Japanese government. Yes, I hope that's the case. There are other Asian nations now that have taken a very strong stance in terms of protecting their population from the pandemic and to a large extent have been fairly successful. If you compare the infection rates per capita and death rates in the US and Europe, Asia overall has done perhaps a better job, but the devastation that this policy has had because of the total, in the case of Japan, like you mentioned, just 200,000 people have come in in 2021 has appeared to 31 million a few years ago. The devastation to the industry, the hospitality industry is just horrible, right? So when you talk to your friends, your GM friends, or academics here in Japan, I mean, how have they survived? Well, good question, because I have been employed most of the time. I have seen what they have done to survive. Basically, in the USA, the management tend to fire or follow employees, right? In the sense that the employee will be left to the market. But when the economy picks up, or let's say the demand side for the hospitality industry picks up, wow, that creates a huge shortage of labor force. And that resulted in surge of the average is at least in Florida. In the case of Orlando, you know, we have students who has to work for the hospitality industry, because we require them to take internship degrees or internship, you know, credit. They used to work for $10 an hour. Now, even, you know, unexperienced, inexperienced housekeepers, it's like $15 or $17. So it went up so much. Now, having said that, let's look at Japan. The case of Japan, unfortunately, the demand side didn't pick up as American market did. So they still, either they are a little bit behind what had happened in the United States, or maybe they are on their own path. However, I think Japanese governments or Japanese people can learn from what had happened in the United States. Because, you know, we remember that back one year ago, it was a little bit gloomy, but I learned February, March of 2021. You know, vaccination started to go around with the senior people. And that was a time that, you know, stimulus money came in to every bank account. And then that money became a kind of the fuel to move the economy because everybody decided, okay, I'm going to spend this money for something I haven't been able to do, which is, you know, spending money at restaurants for arts and entertainment and accommodation basically traveling industry. So that's what happened in the United States. And I hope that should happen in Japan too. Yeah, I think there has been some recovery of domestic travel I live here in Kobe and there's a Porta Pia Hotel which is close by sometimes when my wife kicks me out of the home because we both can't work together at home maybe I don't know how to say if you have the same problem, but I get kicked out as I go over there. And for the last couple of years the lobby has been almost empty but recently, there's been a few occasions where the domestic tourists have recovered and I've heard, maybe not to the same extent you're describing in Florida but some major hotels in the outside area are now understaffed as well. And they're looking for people I heard that the Intercontinental Osaka, some of the office staff people are actually changing beds, because they can't find people to fill those roles because they laid everybody off so there's kind of a little bit of a catch up going on now because of domestic tourism still granted there is no international tourism. That is a very, very promising story for Japanese hospitality industry because they don't have any, any demand from the foreign business. Their, you know, demand side has been stimulated only by the domestic demand by the Japanese people, you know, people living in Japan. And I'm very glad to hear that they went up. I only looked at the numbers of, you know, occupancy rate in 2021 in Japan I think the beginning of the year the occupancy rate was something like a 20 some percent. However, December numbers, I think this is some kind of luxury hotel chains. December number was six over 60 percent. Yeah, really good numbers. Yeah, I've been a little surprised as well that even though we are experiencing the highest number of infections ever in Japan, you know, for Japan is running almost 100,000 which by us standards that's nothing but by Japanese standards that's really dramatically high. But yet people are still are traveling and carrying on economic activity. Also, the booster shot effort finally is taken hold in Japan fact how does it say just yesterday I got my third shot. Yeah, it's very good. So they're hoping to do a million inoculations a day. And if they do achieve that then I think people will feel safer about traveling and domestic. So that's actually how I would like to pivot right now. We've talked about the first half of the show, about how bad it's been over the last couple of years, and the struggles that the Japan tourism industry has faced along with others around the But I'm hopeful that if Omicron follows the pattern of UK and other countries that it will receive here in Japan, and as you indicated other Asian countries are beginning to open up international tourism. So, are you optimistic that maybe 2022 will be the year that Japanese tourism rebounds, or am I being delusional about this. Well, first of all, I am really in the sense I have a prejudice that I am a very optimistic person, but setting that aside, trying to see the objectivity I would remain to be optimistic about surge of demand side for the hospitality industry. And, you know, I tend to put more emphasis on in what Japanese call inbound visitors, which means foreign visitors coming to Japan. Now it's completely banned. However, look what's happening to Australia. I think Philippine government also announced from the February 10 they will open up Australian government is February 21. I don't remember the date but it's sometime in February. As you know, UK already, you know, United Kingdom took that all that restrictions away and now I know the American hotel organization hospitality industry sectors are trying, you know, putting a pressure in Washington DC. They follow the, you know, cases of UK. We don't need any restriction. Omicron is probably more infectious but it's less less fatal. Right. It's a very important message. So it's like, okay, this is getting into another kind of influenza. So you probably do not have to worry too much about it. But the most important message is there are no, there are no hard evidences that travelers are carrying the likelihood of, you know, infecting the local people higher. No, there's no, no evidences. So that maybe the reason why you can open up Australia follow and hopefully Japanese government will hear the message. Well, I should probably give a credit to Japanese government. Japanese government have been doing very well, but it is a borders Japanese people who have been kind of educated in the way that infection is fatal. Well, infection appears to be not fatal. Well, you know, in a sense you throw that like one out of four people or even more are infected. So it's like inevitable. But the bottom line is, as long as you don't die, you get cured. So hopefully that kind of message will penetrate into the Japanese people living in Japan. What about the demand side of the sensei, you know this spring because of the ban on international students that you mentioned earlier. Yeah, we could not accept any students we had over 400 who applied this coming fall. We already have 450 will probably go over 500 students that will want to be on our campus. So based on that it seems to me that despite the last two years and the delays and the lack of travel that the demand by international travelers to come to Japan seems to be going up. It seems, I don't know if you would agree with this but I mean before COVID, there were 31 million people who came here and the number was accelerating year after year after year. I ate us where everything is stopped. But it seems to me there's pent up demand that if the government as you are suggesting, takes a proactive approach and begins to open up tourism that people will begin to come here in relatively large numbers that that's kind of what I'm hoping do you agree with that it might be an overly optimistic again I know you're an optimist but maybe overly optimistic that Steve that is a very fair assessment I completely agree 100% or even more. Because there were some, you know, surveys global service I think it's conducted by either JTP or the affiliate. Basically they have that they had a survey conducted in Australia, Europe, North America. Simple question after the COVID or, you know, recession of COVID, COVID, you know, set those down where which country you'd like to travel. Japan was chosen as number one in all these places or regions Europe, South America, Australia. And they basically, the reason is a little bit interesting. The reason they assumed is probably because Japan has an image of clean and you know, let us be free from the threat of COVID. I don't know why it is. If you look at the numbers, that is very true. But because, you know, Japan has a very low COVID numbers, you know, indicating a good management over there. People wants to travel. Okay, now, how can it be interpreted by the local residents? I don't know. So in a sense, you indicated, I agree with you the best idea one of the best idea I would say best idea is to allow the foreign students to come to Japan and study. We had, for example, I had five students from the University of Central Florida, five that I personally know who was planning to go to Japan. Nobody went. One student was accepted for master's program at some universities with even Ministry of Education through funding. She couldn't go. So what's happened now? She took a job in Europe and now she is now she is in Belgium because she is now working for European company. So in the sense, what Japan lost? Very, very sad. Imagine 20 year plus student goes to Japan, spend two years, four years. What would happen? Exactly the same thing happens to Japanese students who came to the United States, took a degree in Harvard or Cornell or whoever. You know what they do? Every five years alumni gathering every 10 years. Okay, bring the family's big reunions. They will become a most loyal repeater for the next 50 years. What the best segment? And I'm sorry, Japanese government or Japanese, you know, you know, didn't pay attention to that aspect that the foreign student would be the best segment of the tourist 50 year repeaters. So I suggest if you take 500 student, you are contributing so much because you're creating a 50 year repeaters for the next, you know, long time. And in addition, some of the, what percent would it be, like me, 20% of the students will fall in love with Japan and end up living here and contributing to society and you're making Japan a better country as a result. So also over the last two years we lost all of those people who could have been here but unfortunately we're not. We're glad you're optimistic. So what kind of timetable, theoretically, if you could look into your crystal ball. Yeah, let's say let's say the Japanese government does open up. How does it say it'll probably be staged right. They'll begin to allow a limited number of international, I mean this is how Japan usually does things right it's not going to, we're not going to open the doors and allow everybody in at once. The doors and allow every day, you know, 10,000 or 15,000 or something like that. So is that how you would imagine this would occur maybe some time starting in the summer. Yes, and Steve, let's, let's step in to do it a little bit further. We, let us assume that we are hired by the Japanese government as a consultant. No, I don't think they hire me. So what to do. First, propose them accept falling student as early as March. Why the Japanese academic year starting April. So usually in March, they can start a fresh year fresh, no missing any. So start accepting foreign student in March. And guess what, they can be subject to all the regular rules required for Japanese coming back to Japan, or other foreigners coming back to Japan, which is, I think, for the case of United States, seven of the 50 states they have to have six days Karen time but the other you know for the three states only three days Karen Karen time. That's not big deal. So everyone has to go and basically the rule is, if you are fully vaccinated twice or three times, you are treated like a preferential treatment okay business class go this way. So these students can come in and then create an impression to the Japanese you know local people normal people. So for another no any other more danger to us, and just the same people. Oh great. Starting from April may they can open up to visitors in the limited basis in which way, take the case of Europe and the United States, only those who are vaccinated by the vaccine. They are approved in the European or American continent, those are good. They don't say name, what are the other vaccines, but that's what the European unions are doing. That's why American Europe we can travel, you know, basically without any kind of time as long as you have free for the vaccination certificate, and the negative PC out test result within 24 hours of the departure. So, you know, Japanese government just can follow what the group of G seven government have been doing, and that's how to open slowly from probably may, I guess, student March. No more tourists may. That's my just ideas. That makes a great deal of sense, because you're right the Japanese school year starts in April so the students were allowed in in March then they can enroll and be a part of that year's group of students going forward. Oh, go ahead I'm sorry. For example, I have heard that some of the hotel industry are now hiring in Japan. And we do have several cases that American student, you know with American passport can work in Japan by taking legitimate work pieces because of the shortage in the hospitality industry. And that gives tremendous opportunity for American student. At the same time that gives a very required important labor force, who can speak English, who can deal with foreign tourists, or who can train the fellow Japanese workers to do business in English. So it's really situation. So, you know, that is the kind of things, which I hope would happen in the near future. And actually, our, we've been continuing our hospitality program now it's in its fourth year, and the graduates from the last, but actually there they have jobs now and they'll start working in April. Many of them were hired. I was so surprised by this and say, Hoshino resorts, Ritz Carlton, Hilton Osaka, even though their overall numbers are depressed right now I think the hotel GM's and maybe the businesses themselves. Or the owners of the hotels are thinking more long term, we need new people to come in, even if the business level right now is fairly low so I was encouraged seems to me that the hospitality industry is looking past cove it. In terms of building. I mean when you go to Kyoto you haven't been there in a while but the number of new hotels is still amazing how many that are going in so the industry itself is very pro Japan in terms of international tourism. Beyond what we've experienced the last couple of years. So, what you said is very important, actually underscore something very important. Maybe it's a little bit controversial but we're not taking the opportunity, let me say, Hawaii and Japan have some kind of similar problems regarding the hospitality industry so what's the common denominator. Many of the educational institutions are geared have been geared toward tourism studies or tourism management, unfortunately to the management is not exactly what's required by the industry. Having said so, what you're doing at the cancer guide is a trailblazer Japanese government is paying attention I'm paying attention and I tell them you have to pay attention to what the cancer guide is because that is a fast hospitality management school conducted taught in English. That's very important. And I hope for, you know, I was in Hawaii like 20 some years ago and I discussed this with some several people in the hospitality industry, what they need is a hospitality management person they're not exactly tourism studies. So in the sense, you are trying to raise a market of Japan because there are 44 universities with a tourism studies program, but none in the hospitality management, especially in English. Well, thank you. Thank you for those kind words and unfortunately, we've run out of time for the show so let me thank you so much for your interesting insights in terms of the hospitality tourism industry in Japan and your optimism, which I share about the industry coming back hopefully sometime by mid mid summer in that timeframe for 2022. And that will of course benefit Japan. It'll benefit our students. It will benefit the industry itself so Japan as we talked about before the tourism industry was the fastest growing industry and predicted to be the biggest industry before coven and I think in the future that will be the case again. And as I say, thank you so much. It was been very enjoyable. We didn't talk about hospitality education in Japan, which I know you're very passionate about as well. That'll be for our next show. Thank you so much. Thank you.