 Aloha. Welcome to another discussion episode on show called Hospitality Hawaii. I'm your host, John Konching, and it gives me great pleasure every other week to bring in individuals, leaders, difference makers, and others who are engaged in our number one industry for the state of Hawaii, the visitor industry. So I am so happy that our guests agreed to be on our discussion today. His name is Eric Takahara. He's the managing director for Hawaii Tourism Japan. Eric's been a longtime friend and supporter of me and of the industry through many, many years during my time with the various companies I've been involved with. He's a key force in our largest international marketplace, the Japan marketplace, and there's nobody more knowledgeable about the Japan visitor in the market to Hawaii than Eric Takahara and his team at the Hawaii Tourism Japan. So without further ado, I'd like to introduce and welcome Mr. Takahara. Eric. Wow. Aloha, John. Thank you for that kind introduction. I just want to say thank you to you for the past probably almost 30 years that I've known you. You've guided us and you've given us great leadership when you were in your roles, in your previous roles, and we're just so thankful to have people like you that led us in the industry, and we look forward to a nice future with you as well. I appreciate those comments and I'll tell you, nobody in this industry can do anything good unless they have great people working besides them and great partners like you and all the others. So we've got a quick, probably 27, 28 minutes, so I won't take up too much of my time talking, but maybe we can kind of set the stage. So free COVID 2019 was probably, aside from obviously the peak years back in the late 90s, it was a great year for Japanese visitors coming to Hawaii. I think you probably had 1.4, 1.5, 1.6 million Japanese visitors who arrived in state in Hawaii in 2019. Kind of fast forward. We went down to almost zero or maybe zero in 2020. There's some tricklers of small numbers of people coming in. They still have some flights. The good news is that there's more flights being added. So maybe you can tell us where we are now and what you think is going to happen with your special crystal ball, stay in the next three, four months. Thanks, John. Yes, man, 2019 was a great year for tourism overall into Hawaii. We had about 10.4 million total visitors into the state. Japan accounted for about 1.5, 6 million of those visitors in 2019. We were churning like full steam ahead into 2020. Olympics was going to happen. We were going to feature surfing. First time ever surfing, the Hawaiian sport got included in the summer Olympics. We had a press conference in February. I mean, highly attended, highly widely covered in Japan on all major TV stations about surfing. And we were so excited for 2020 and what happened, COVID. And all of a sudden, like you mentioned, that 1.5, 6 million Japanese visitors went down to almost zero. You're correct. As soon as March, April of last year, we were down to no flights coming in for the various situations. And we got through 2020 pretty much like that. There were stop, go kind of scenarios where Japan was going to open up. We had worked very hard with the Japanese government and our Hawaii government on a couple of key people, Governor Nige, House Speaker Saiki, Ray Instrumental, on helping us to negotiate a travel corridor or a travel bubble with Japan. And we had gotten it to a place where right around August of last year, we were going to be able to set something up with Japan in a travel corridor kind of scenario. But what happened? The numbers started spiking right in the US. And then the numbers started spiking in Japan. And that kind of rolled us into Q4 of last year. And the numbers went crazy as we all know globally. And the travel quarter discussion went away. And we had to postpone. And there were several stop, go kind of situations like that in 2020. What's happened this year in the first quarter, we were hopeful that a lot of things with the vaccine and pretesting and all that safe travels with Hawaii and Japan would be pretty much starting to roll in a significant pace. But as we see now in Japan, what's happening now, the vaccine rollout a little slow currently. Right now, just about 1.6% of the Japanese population vaccinated. But that's stepping up. It's continuing to step up on the vaccine rollout. The procuring more vaccine, we see good news moving forward into the summer and into the fall of this year for vaccination for the Japanese population and travel along with that. So right now, the flights are what it is. The travel companies are where they're at right now gearing up for when the Japanese will be able to more freely come back and forth between mainly Japan and Hawaii. So a ramp up kind of period right now. And we're looking at Q3, Q4 to really start seeing the numbers start to come back in from Japan again to Hawaii. So you would say that the two key factors in the Japan business coming back, one's got to be more Japanese consumers being vaccinated, right? And as you mentioned, the procurement of the vaccines itself seems to be stepping up as maybe a lot of the European countries and the U.S. have already got a good number of people that are being vaccinated. So I guess there's more vaccines available for other countries. So that maybe number one, number two is probably got to be that 14-day quarantine, right? The Japanese government themselves feel a bit more comfortable with the rest of the world having a lot of vaccines, a large percentage of the population being vaccinated. Say America, let's say example, you've got 60% or 50% of Americans being vaccinated above the age of 16. You know, it's probably conceivable that Americans could travel to Japan in the not too distant future, right? Agreed, agreed. And, man, boy, John, you hit the nail right on the head. The main deterrent for the Japanese visitor coming back to Hawaii in any significant type of numbers is that 14-day quarantine that they're subjected to when they return to Japan, right? Now, what's important to understand here, and would like to point out about the Japanese market, is that they want, okay, vaccine is rolling up, but for specific to Hawaii travel, a lot of Japanese don't care if they're vaccinated or not. They will go through the pre-travel testing and save travels and adhere to that. And as long as they don't have to do the two-week quarantine, the 14-day quarantine when they return to Japan, all the surveys that we've taken in this last year show that a significant number of Japanese would come back if they didn't have to do the 14-day quarantine. So, yes, vaccine is important. As a nation, it's important for them, but it's not necessarily the main deterrent for them coming back to Hawaii. The main deterrent for the Japanese coming back to Hawaii is the 14-day quarantine that they're subjected to. So what do you think is the biggest hurdle with regard to getting that either waived or reduced? You know, Korea, I think, as you mentioned, and it was in the news lately, with returning Korean residents, I don't know if it's May or June, but soon they'll be exempt from needing to quarantine as long as they can show proof of a negative test, right? Yes, so interestingly enough, they chose Cinco de Mayo, right, May 5th to be the day that actually fully vaccinated Korean residents that traveled abroad would be able to return to Korea from traveling abroad without the 14-day quarantine. And they also have to produce a negative PCR test as well, right? So two things for the Koreans. If they're fully vaccinated and they produce a negative PCR test upon arrival, they get exempted out of their 14-day quarantine. So that started on May 5th of this year. And, you know, we're hearing rumblings out of Korea, especially their travel. The travel ministry is also working very closely with the Japan government to be able to start bringing back Japanese tours and Japanese back to Korea in a big way, because Korea is a very popular destination for Japanese to travel to. And the Korean government is now working very, very hand in hand with the Japanese government to make that happen sooner than later. Okay, so Eric, you mentioned earlier about, you know, that you felt there were a lot of Japanese customers or consumers that were willing to travel to Hawaii, but they, you know, they're concerned about the 14-day quarantine. So what's your backup? How do you know that that's the case? So I think there's different surveys that were done. Maybe you can share some of that information with us. Sure. I'd love to flash up the latest JTB survey on traveler sentiment or travel from Japan to Hawaii. Okay, 20% of the respondents, now this is a survey we've taken surveys during the whole year, last year, every other month for traveler sentiment. And it's very reflective of this set of data, which was from JTB research. And JTB is the largest travel company in the world, right? So their numbers show that 20% of the respondents would return back their choice, the destination of choice, once they're able to travel abroad again is Hawaii. And then when you look across the board, we take the same data and we slice it up by gender and age category. You see the same type of numbers across the board that unequivocally, Hawaii is the destination of choice for Japanese. Now this data is very reflective of the surveys that we were taking over the last year. This is the thing about a sample size of about 2,200 respondents. Our sample size for our own surveys that we have through our databases is probably well over 10,000 respondents. But the numbers are the same as what I'm trying to say. And really encouraging to see that the traveler, Japanese traveler sentiment towards coming back to Hawaii is very high. And we are the destination of choice for them to come back to first. So in your conversations with Japanese travel companies and in the few conversations I've had with them, I think the sentiment is that once things governmental-wise become open with respect to the quarantine waiver or reduction, they think that the business is going to come back pretty quick. Do you feel that way as well? Oh, absolutely. And then when you look back at history, historically for the Japanese traveler, every kind of disaster that we've had in the Japanese market, starting, we had SARS, we had bird flu, we had 9-11. We had the great Tohoku earthquake and tsunami in 2011. We had the stock market, world global financial markets crash in 2000. After all those disasters or tragedies, we see the following year the Japanese market just rebounds pretty quickly. And as we're seeing now, we do see the domestic market coming back in a nice way. But I would tell you that many of the hoteliers and stakeholders in Waikiki and the neighbor islands will tell you that until that international piece of business of Japan being the biggest market internationally, until that returns, and they're going to have a hard time returning back to full staff, so on and so forth reopening in any significant way. So yeah, Japanese need to come back and to your question, we have historical data, we have current data from all of our airline partners, travel companies that yes, they believe that once the restriction is lifted, that 14-day quarantine, that there will be a significant spike in Japanese travel demand. You had a couple or you have a couple more slides, right? And wasn't one of them about the airline seats or the airline schedule? Yes, so currently, this is what your current airlift looks like right now. So I can tell you through our research, HDA research, as well as D-Bed research, we get about just about 1500, like you said at the opening of this time, right? You said that it's tricklers of Japanese coming in. So the tricklers that are coming in represent about 1500 Japanese coming in on any month now recently. When you look at the air lift situation, you see the airlines are providing 34-35 flights a month with 8,400 to about 8,500, 8,600 seats per month. So that tells you the airlines are very committed to Hawaii. Hawaii is in their route networks, one of the best profitable routes that they have. So financially, economically, and as well as just because a lot of them have such a deep and long connection with Hawaii, they remain committed to this market, even though it only represents 1500 Japanese visitors coming in now, they believe about on average 8,500 seats in the market every month. So that kind of shows you their commitment as well. Yeah, that's amazing. And as a destination, we're lucky to have partners like Japan Airlines, ANA, and all the other carriers that continue to have those flights, even though they aren't the passengers there. So you know, Eric, one of the things that's really important, and we didn't talk about this a little bit earlier, but I know you're involved in it, each county is doing their destination management activity or action plan, right? And a lot of it has to do with the, you know, what they call regenerative or sustainable tourism. In other words, making sure that the visitors that we have that are coming into the island, that we don't hit that 10 and a half million visitor mark in 2019, but the visitors that we do get are more sensitive, more culturally aware of the environment and the fragile nature of our resource. Can you talk a little bit about that and your feelings with respect to the Japanese visitor and how they might fit in with that, that direction? Sure. You know, ever since John DeFries came on board as the new president CEO at HDA late last year, the whole direction that regenerative tourism has really been, you know, umped up or amped up, and the team at HDA there, they work very hard, you know, and this is in response, John, to a resident sentiment survey that we are very aware of, where it's a survey taken, I think now once or, oh no, more than once, twice, twice a year now at least by HTA, and it shows, you know, resident sentiment towards tourism. And that sentiment is no big secret it's been dropping, right? The residents that are not happy with this many visitors in their home, you know, their home, this is where they live, work and play, they're not happy. So, you know, that just prompted HTA to think about regenerative tourism, responsible tourism, what we like to call an HTA malama. So the malama initiative was introduced by John and adapted by all of us, the, you know, global contractors and every market. And it is, it does speak to what you say, we want to bring back the visitor. Yes, we need visitors to come back in a strong way, but we need to bring the visitor back in a hono way, right? In Hawaii, we say hono. We want them to come back in the right way. So that is kind of, if I had to boil it down to this essence, the malama initiative that's being initiated right now by HTA. The DMAP plans that you're talking about is an extension of malama. It is one thing that we are trying to do to actively engage each county, each island, to have resident community feedback into things that we do as HTA. And when I say we, it means the mothership HTA, as well as all of their contractors, right globally, to make sure that we are sensitive when we do market this beautiful, wonderful place to our markets, that we're doing it in a very responsible way, a malama way to take care. And we want to form, for example, Japan, we say we want to, we want to create a more polo travel. And Japanese historically have been very respective of the Hawaiian culture. They are very compliant in general. You tell them we're a mask, they wear a mask, you tell them don't do this, don't do that. And as you know, through your long career, you've seen that upfront and personally too, that they're quite compliant. So as far as the market goes, you want the Japanese visitor to come back as quick as possible because they're already kind of your polo traveler. It just takes now a little more education on maybe more natural resources and how to be a little bit more responsible when they come back. But for our market, it's something that's kind of an easy pitch. And you know, they are the regenerative tourists that we, you know, visitors that we want back in Hawaii, they're higher spending, they respect our Hawaiian culture and respectful of our natural resources as well. Well said. You know, very well said because you know, I remember reading pre-pandemic that even in Japan, there were a lot of issues there. There were growing resident sentiment against visitors from all over the world because places like Kyoto and some of the other maybe less traveled places in Japan were now being overrun by visitors from all over the world. And a lot of it became, you know, as a result of the popularity of all the different social media channels. And so I know different places in Japan and elsewhere around the world were starting to put restrictions against visitors or kind of like what state of Hawaii did with Hanama Bay and what they want to do with some of the other hot spot, you know, resources around the islands. But hey, let's switch gears a little bit. Maybe you can talk about during this last 12 months or six months, what type of activities have you and your team been engaged with to keep Hawaii top of mind, even though obviously we know people can't travel. And then what are some of your thoughts about once things start going, what do you have in the pipeline to really hit the market, you know, hard and fast to make sure we're maximizing our coverage and people know that, hey, it's safe to travel to Hawaii. There's lots of flights and so forth and so on. Right. So during the lockdown, right, during that whole last year, what we were doing was really important for any other destination as well, was to keep engaged with the Japan market. And Japanese don't forget so quickly. They know people who want them and people who do not want them. And you know what I'm talking about. But so for us, it was very important as a destination as Hawaii as the top destination to remain the top destination in Japanese, you know, consumer psyche right in their mind. So we relied heavily on digital. We attacked it from one, the travel trade. So we were constantly engaged with the travel trade, our GPDs, our HISs, our Japan Airlines, our ANAs. And we had weekly almost get together seminars, seminars would last anywhere from 30 to minutes to two hours. We would do updates on COVID on what was happening with the pandemic here in Hawaii, specific to Japan. We created a whole very, very robust website called within our AllHawaii.jp website about COVID. And really we're asked by a lot of even Japanese government organizations if they were able to use that for Hawaii, you know, to kind of show Japanese consumer what it's like if they need to come to Hawaii or what it's like right now in Hawaii. And we were happy to share that with them. So, you know, engagement with Japanese markets is highly important and you have to stay top of mind, right? So we use a lot of digital platforms. Social media was through the roof, right? And we relied on a lot of digital platforms. So we'll continue that. Digital is, I don't care what any market is super important for engagement. And once, you know, once we start turning what everybody's going to start, the travel companies, the airlines are going to start marketing now on about Q3, right, to try to capture the year end. We hope to be hand in hand with them for the recovery of the market because, you know, they're all asking us to be with them to message the Japanese consumers, you know, the HDA, the HDJ is a vital part of what they do. You know, the bureau, what they call us in Japan, the bureau, they need the bureau with them on this. And as a destination, we couldn't agree more. So we have some things in the works right now. We're right now kind of in a holding pattern on what we can do. And, you know, we're working through that with HDA and everyone else. But once that's worked through, we hope to be able to be hand in hand with the stakeholders in Japan to welcome Japanese back towards Q3, Q4 this year. Yeah, well, I'll tell you, you know, the Waikiki and Oahu desperately need the Japanese visitors. You know, maybe not so much the neighbor islands. And, you know, while Japanese visitors did go to the neighbor islands and different travel companies made concerted efforts to get more people to travel to islands or spend some time in the big island or Maui, you know, and they've had growing success. The numbers are well, well below the numbers that actually come and stay in Oahu. And I think we know the reason why, because they're shopping, the diversity, so forth, all the action and all the activities that are available on this island. You know, just a small tidbit here. You know, I just had lunch the other day at a very popular restaurant and in the Royal Horn Shopping Center and normally pre-COVID time would, I was talking to a waiter, he said we would have 450 people a day from different Japanese travel companies having lunch. And on any given night, they would have 850 dinners at this popular restaurant at night. And there were only two tables occupied during lunch. So it just shows how important having the Japanese customer in because the American customer who obviously everyone loves to have and we're glad to have as many of them as we can, they kind of tend to just disappear, right? They'll stay in the hotel, check in, and then a lot of times they're traveling all around the island where that Japanese customer I think does more to patronize a lot of the different shops, restaurants, other activities in and around Honolulu and Waikiki, so for Waikiki it is tremendously important. What was that other slide that you had, Eric? You had one more slide, didn't you? Yeah, I think people were wondering, we get this asked all the time, so what are other people doing? What are other destinations doing in Japan to grab this very desirable traveler, right, from Japan? And this is what we were able to gather for our last marketing meeting, last month's marketing meeting. But we see now and just recently we heard rumblings out of Korea as as as close as yesterday that they're going to go full bore after the Japanese and they want the Japanese to come back to Korea full force. So the Japanese government is going to do a lot of initiatives, they're going to do a heavy marketing campaigns in Japan, they're also going to work with the various travel companies and incentivize them as well. So they're wanting that Japanese visitor to come back pretty quick. Just this mattering of what other destinations are doing, big promotions, we weren't able to get a lot of the budget numbers except for Hong Kong, which is going to pour in about 145 million into marketing to Japan and the situation in Hong Kong, right? I mean, not the most positive things happening in Hong Kong with the protests and all of that, all the bad press they were getting, but they understand that Japanese visitor for them is highly important. And at one time, they had a large share of Japanese visitors going to Hong Kong, but for them to come out and say they're going to spend 145 million to go get the Japanese back is a pretty bold move by them. And these other destinations are really just spending big money and marketing back to the Japanese to get them back. And they won't tell us to our face, but we know and it go to we that they're trying to steal them away from us, right? I noticed you didn't have Guam on that list. Guam obviously is a very, very popular maybe shorter haul vacation spot for Japanese customers, right? They weren't on the list at the time because they were just completely not doing anything. But we did, we recently, last week, found out that Guam Visitors Bureau is going to launch some major promotions and campaigns in Japan. Like you said, shorter haul about three and a half hour flight from Tokyo to Guam, right? Less than half, right? That it takes to flight to Hawaii. And, you know, they've always been competing with us on the sand and surf and the retail is pretty good too in Guam too. So, you know, definitely all these other destinations are after the job. Yeah. Well, well, I know you can't speak to it, Eric. And I won't, I won't put you on the hot seat. But, you know, lately, if anyone's been listening to the news or reading the newspaper, and anybody who's involved in the in our visitor industry know that there's been a lot of press about about the Hawaii tourism authority budget. Different bills are passed, et cetera. And now I know it's on Governor Igay's desk waiting for it to either be signed or vetoed or whatever the case might be. And however, it turns out, we just need to make sure that the Hawaii tourism authority, and especially Hawaii tourism Japan, where you have one of your highest spending visitors that's coming to the state and also a very respectful and sustainable visitor, the ideal customer that we want, that that organ the marketing teams, whether it be Hawaii tourism Japan or HTA total has the necessary funds to be able to make the impactful marketing and promotion in Japan and be able to plan long term. And I think that's one of the bigger issues about the HTA, you know, the funding issue is that if every year the Hawaii tourism authority has to go to the legislative to get funding for that next year, very difficult to make long term plans. And we know that in the travel market, you have to be able to make long term plans in order for it to be successful. So so on that note, you know, I won't put you on the spot, but just know that there are a lot of people that are supporting not just Hawaii tourism Japan, but all the market, make sure that we have the right amount of funds. And there's accountability involved as well, which is a key point. But I want to thank Eric Takahata, the managing director for Hawaii tourism Japan, for sharing 30 minutes of his time, his Manao, his his experience, his knowledge on that Japan market. I think that that market is going to come back very strong. Now it might take six months or it might take a little bit more, or it might be less, you just never know. But it'll be good overall for economy, it'll get a lot of people back working. So thank you very much for your time, Eric, we really appreciate it. And I'd love to have you back, maybe six months from now, when things have happened, and we get a better perspective over, now what, right? How do we manage this thing moving forward? So thank you, Eric, I appreciate it. So for everybody here, it's been great having everybody on another episode of Hospitality Hawaii. We look forward to our next guest, whoever that might be in the next two weeks. Until then, hui hou, be safe, and thank you very much. Aloha.