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Japan tourism still suffers from a credit card gap

June 30th, 2014 by

So close, and yet so far: Shimosa Manzaki Station on the JR Narita Line

So close, and yet so far: Shimosa Manzaki Station on the JR Narita Line

In a letter to the editor published in the June 23 Tokyo Shimbun, the writer relates an anecdote about two American women who while waiting at Narita Airport for a connecting flight to the states after arriving in transit from a vacation in Southeast Asia, decided to kill time by taking in a local onsen (hot spring bath). After checking the Internet with whatever mobile devices they had with them, they found that the nearest one was at Shimosa Manzaki station, one stop away from the Narita city terminal on the JR Narita Line. Since they weren’t going to be in Japan long they didn’t bother getting yen, and were able to buy JR train tickets with their credit cards. They could also use their cards at the onsen itself.

However, when they went back to Shimosa Manzaki station to make the return trip to the airport after their bath they discovered that their credit cards were no good. Neither the ticket vending machine in the station nor the employee selling tickets at the window would accept them. The letter writer happened to be at the station at the time and understood English. She was kind enough to buy them tickets so that they could get back in time to catch their flight.

This incident highlights a major gap in the government’s plan to increase foreign tourism in Japan. Last year, for the first time ever, the number of foreign visitors exceeded 10 million, thus encouraging the Japan National Tourism Organization to aim for 20 million by 2020, the year Tokyo will host the summer Olympic Games. Significantly, 80 percent of the tourists who came to Japan last year were individual travelers, meaning they didn’t come as members of organized tours. Individual travelers book their own accommodations and arrange their own transportation with the idea of playing things by ear and enjoying their travels at their own pace.

Credit and debit cards make it easier since they allow for more flexibility than cash or travelers checks, which have to be purchased through foreign exchange outlets. As we’ve mentioned before, most Japanese bank ATMs don’t accept foreign credit cards, but even more vexing for individual tourists is that many Japanese businesses, including some who cater to tourists and especially those outside the large metropolitan areas don’t accept credit cards.

Hotels tend to be OK, but as the two American women who visited Shimosa Manzaki found out, a lot of transportation outlets aren’t. As far as JR goes, larger stations in the cities accept credit cards, but most others don’t. If you’re buying a shinkansen ticket, it’s usually OK to use a credit card, even with the special vending machines, but the Midori Kenbaiki, the special vending machines for long-distance travel, are complicated to use even for Japanese and don’t have English instructions.

Foreign tourists can buy Pasmo and Suica prepaid IC cards just like Japanese residents do, and they certainly make life easier, but both cards require a ¥500 deposit that may put some tourists off. Both cards can also be tied in with credit cards so that they recharge automatically when their value drops to almost nothing, but that option is not available to tourists. Mitsubishi Research has found that almost 90 percent of the travelers it surveyed from Taiwan, South Korea and the U.S. buy some sort of transportation pass, be it the JR rail pass or one-day Metro tickets, so obviously it is the sort of service that’s appreciated. But while these same people express a high level of satisfaction for the transportation service that’s offered, they also find it difficult to make sense of the network.

Specifically, they have difficulty figuring out how to get to specific destinations and how to buy tickets, especially from vending machines, even when English explanations are available. Moreover, while they appreciate the various passes on offer, they don’t often know which one is best for their needs. In Tokyo, should they buy one-day passes for both subway lines or just one?

The research arm of Mitsubishi UFJ found that 88 percent of foreign tourists use guidebooks, maps, smart phone apps or some combination of the three, but they would like to be able to do everything using their mobile devices. Some businesses have already said they plan to increase the number of free wi-fi hot spots by 2020, which is a good start. But making it easier to use credit cards more flexibly would also be a big incentive for visitors since it would save them time, trouble and maybe even money.

Does an increase in summer bonuses mean a healthier economy?

June 21st, 2014 by

It’s that time of year again, the season when employers, both public and private, hand out their summer bonuses. In recent years the recession has kept the amounts down despite the fact that regular employees tend to consider them as an integral part of their annual salaries. In fact, society in general thinks that, as proven by the practice of incorporating bonuses into repayment schedules for home loans. Technically, however, bonuses are literally bonuses: Employers are not obliged to pay them, and actually use them as a kind of safety valve to adjust personnel expenditures twice a year.

Josei Jishin lists 35 of the  top 55 major corporations in terms of size of summer bonus for 35-year-old regular employees

Josei Jishin lists 55 major corporations in terms of size of summer bonus for 35-year-old regular employees

This summer the news sounds good. Bonuses are, on average, higher than they were last year, by about 8.8 percent, according to a survey of 74 companies carried out by Keidanren, Japan’s biggest business lobby. The average bonus for a 35-year-old regular worker will be ¥1.5 million, while that for a manager in his 40s or 50s is above ¥3 million. It’s the highest year-on-year increase on record.

According to Josei Jishin magazine, the biggest bonuses are being given out by trading companies, which makes sense. Trading companies, who do all their business overseas, enjoyed a huge windfall after the government’s monetary easing policy forced down the value of the yen.

Export-oriented manufacturers also did well for the same reason. Toyota’s average summer bonus for a 35-year-old employee is ¥1.23 million, though that sounds sort of stingy considering that the company saw a 73 percent rise in profits. Securities companies, which also benefited from Abenomics, were high on the list (Daiwa Shoken ¥1.35 million), but their employees’ compensations tend to be based more on personal accomplishments rather than corporate achievement, which is the classic definition of a bonus.

In 13th place on the Josei Jishin list is NTT DoCoMo, at ¥935,000, the highest company to record a drop in average bonus pay compared to last year. In fact, only two companies on the list of 55 companies announced a decrease.

What’s notable about the list is that all the companies are big. Smaller firms, it should be noted, aren’t doing as well in the recovery, and while average bonuses have gone up, the actual number of bonuses given out has gone down, from 38.6 million in 2013 to a projected 37.4 million this year.

Economist Hiroko Ogiwara pointed out to the magazine that while automobile makers did really well, their suppliers barely kept up and so didn’t give out much in the way of bonuses. NTT didn’t do as well as last year because it has no export-related business. And domestic companies that rely on imports, like processed food manufacturers, have suffered due to higher costs for ingredients. Moreover, the labor shortage in the retail and service industries pushed up personnel costs. Sukiya, the largest gyudon (beef bowl) chain in Japan, could only afford an average ¥350,000 to its regular employees (meaning not to restaurant staff). Power companies also were cheap with bonuses because of their continuing reliance on imported fuel. Kyushu Power’s average was only ¥300,000.

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Won’t get fooled again? Fans and their money are soon parted

June 13th, 2014 by

Mayu Watanabe, center, a member of Japan’s all-girl pop idol group AKB48 members, shows off the winner's gown after taking the No. 1 spot of the AKB48's General Election 2014 in Tokyo, Saturday, June 7, 2014.

Hail the new queen: Mayu Watanabe, a member of Japan’s all-girl pop idol group AKB48 members, shows off the winner’s cape after taking the No. 1 spot of the AKB48′s General Election 2014 in Tokyo, on, June 7.

Several weeks ago we wrote an article about the female idol collective AKB48 and later received a message from a friend who told us he was in Tokyo’s Akihabara district, which the group calls home. He was in a shop that sells various used goods and reported that there were hundreds of “used” copies of AKB’s latest single on sale for only ¥100 each, even though the single had just been released.

The reason for the surplus was AKB’s famous premium system: if you buy a CD you get the chance to meet the young women in the group or, in this case, a chance to vote in one of AKB’s popularity contests, which are called “general elections.” The most recent of these, No. 6, was held June 7, where Mayu Watanabe received the most votes. “Tickets” that allowed fans to cast votes in that election were included in the group’s newest single, “Labrador Retriever.” The more singles you buy, the more opportunities you have to vote, which explains all the used CDs. The fans only need one copy of the song, but they bought multiple copies so that they could stuff the ballot box with votes for their favorite members.

Each voting ticket is printed with a special URL and a unique serial number. The holder of the ticket goes online, logs on to the election website, and casts one ballot by registering the serial number. After voting, that serial number cannot be used again.

An enterprising blogger on the site Gadget Tsushin decided to use the available data to figure out how much money the AKB organization made from this election. First, he checked the top vote-getters, starting at the top with Watanabe (159,854 votes), proceeding to second place with a girl named Sashihara (141,954) and one down to 80th place in the poll. He added up all the votes received by these 80 members and the sum was 2,277,635, which, by the way, was more votes than those cast the same day in the Nakano Ward mayor’s election.

CONTINUE READING about fan devotion →

The new National Stadium will have to rock you

June 8th, 2014 by

The show must go on: Attendees of a sayonara event at the National Stadium snap photos of an air show held on June 6.

The show must go on: Attendees of a sayonara event at the National Stadium snap photos of an air show held on June 4. KYODO

The old National Olympic Stadium in Tokyo closed down at the end of May with a big sendoff: two days of star-packed concerts in front of a capacity crowd. As everyone knows, the venue is being torn down to make way for an even bigger structure for the 2020 Tokyo Olympics, an endeavor that continues to court controversy due to its projected size and cost, not to mention what it will likely do to the neighborhood around it.

Originally, the estimate for the new stadium was ¥300 billion, but mysteriously this figure was decreased to ¥169 billion just prior to the final bid. According to Professor Tomoyuki Suzuki, who was in charge of preparing Tokyo’s unsuccessful bid for the 2016 Games, construction costs for public facilities always end up rising over time, but neither the 2020 Tokyo bid organization nor the Japan Olympic Committee has ever explained that bit of conventional wisdom to the public. He told Tokyo Shimbun last April that the estimate was simply based on a number “that was most likely to be accepted.”

There is also the question of what to do with the stadium after the Olympics. The JOC is predicting that it will show a surplus of ¥400 million a year, but as Suzuki points out, this projection is based on the premise that the stadium will host 12 major pop concerts a year, and that, he believes, is impossible, unless the stadium foregoes sporting events, which is what it’s being built for in the first place.

The main problem with using stadiums for concerts, especially stadiums that hold field events like soccer, is that the playing surfaces are used for seating, which has a tendency to destroy the grass. Suzuki cites Ajinomoto Stadium in Western Tokyo, which is the home field of the FC Tokyo soccer team. In 2008, the stadium operators rented the facility to a promoter who held a rock concert attended by almost 80,000 people. Despite FC Tokyo’s protests, the concert went ahead, and afterwards the stadium had to spend “tens of millions of yen” to change the grass on the entire field in time for an FC Tokyo match.

CONTINUE READING about stadium rock to come →

Diamonds are suddenly everybody’s best friend

May 31st, 2014 by

Several years ago the term “urban mining” took off. It referred to the discovery of precious metals that were “buried” in people’s homes in the form of personal possessions like jewelry and home electronics that they weren’t using. A lot of cell phones, for instance, use gold and other valuable materials in their circuits, and when the price of these substances was high, brokers would pay premium prices for them, no matter where they came from or what form they were in.

Komehyo outlet in Ginza, Tokyo

Komehyo outlet in Ginza, Tokyo

At the time, gems were not coveted so much, but that’s changed. Right now, the price of diamonds on the world market is about 30 percent higher than it was a year ago, according to a recent article in Chunichi Shimbun, thanks to a healthier world economy. Consequently, well-to-do people in Asia, North America and the Middle East are craving diamonds, and foreign buyers, particularly from the U.S., China, India and Dubai, are flocking to Japan because they think there are a lot of the rocks here “sleeping” in people’s closets and vanity cases.

The reason is simple. During the bubble period of the late ’80s, when the value of various assets was higher than it probably should have been, people with even a little money bought a lot of jewelry that they don’t wear any more. Many of these people probably have forgotten they even have diamonds.

Komehyo, the Nagoya-based retailer that specializes in recycling high-end merchandise such as designer accessories and expensive jewelry, is spearheading the drive to get Japanese people to dig into their tansu (wardrobes). As one of the company’s store managers told Chunichi, another reason foreign buyers are descending on Japan is that the diamonds are already cut, and used cut diamonds tend to be cheaper than new ones, though there really isn’t any difference in quality. Komehyo is hoping to sell used diamonds in bulk and is offering premium prices to anyone who wants to unload theirs. The chain has launched a Diamond Purchase Fair at all its 20 outlets throughout Japan.

In order to get a handle on the market, Komehyo conducted a survey among men and women over the age of 20. They found that, on average, respondents have each spent about ¥780,000 on “jewelry, watches, bags and brand goods” during their life so far.

Several years ago Tanaka Kikinzoku Kogyo, a dealer in gold and other precious metals, carried out its own survey and found that 80 percent of female respondents have jewelry they don’t wear any more, either because they no longer like the design, or lost one earring or just forgot about it. The company calculates that the average woman in this group has ¥40,000 worth of jewelry they never wear. Tanaka was interested in gold, however,

Based on its own findings, Komehyo estimates the average person possesses about ¥160,000 yen’s worth of jewelry and other valuables that they don’t use any more, which means there could be as much as ¥15 trillion worth of diamonds in people’s homes.

Japanese low-cost carriers hit hard by pilot shortage

May 25th, 2014 by

Onward and upward: Plane taking off from Narita airport

Onward and upward: Plane taking off from Narita International Airport

Low-cost carriers (LCC ) — airlines with cheaper fares than standard carriers — came relatively late to Japan. Peach Aviation was the first in March 2012, followed by Jetstar Japan, an affiliate of Australia’s Qantas Airlines, in July of the same year, and then Air Asia Japan, which has since changed its name to Vanilla Air, for some reason. (Skymark, which also charges less that most airlines, is technically not an LCC.)

As of March, LCCs accounted for 7.5 percent of domestic passengers, which isn’t bad, and growth seemed assured, but suddenly all three bargain airlines have hit a wall. Vanilla recently announced that it will cancel 154 flights, or 20 percent of its schedule, for June, and Peach said it would curtail its own schedule by more than 2,000 flights through October. Jetstar had planned to expand its flight coverage this year but has since postponed those plans.

The reason is a serious shortage of pilots, in particular flight captains. Vanilla says it has had personnel problems recently due to pilots quitting or taking sick leave, but its president, Tomonori Ishii, has assured the public that it will address the problem by “borrowing” personnel from its parent, ANA, but on a temporary basis. Of Peach’s 52 captains, eight were out of action due to illness or injury, but, in fact, the problem is more intractable.

CONTINUE READING about Japan's pilot shortage →

Japan home electronics makers plays dumb on smart TVs

May 18th, 2014 by

Smart enough? The latest model LG net TV at Yamada Electronics

Smart enough? The latest model LG net TV at Yamada Electronics

Last year Panasonic ran up against a wall when it came out with its first dedicated “net TV set” for the domestic market. Though TVs had entered the Internet age years before, this new “smart” model in the home electronics giant’s Viera line was an all-in-one device. It hooked up to the Internet directly and basically acted as a computer monitor, so users could stream movies from on-demand services, watch YouTube videos, mirror their PCs and tablets, whatever, while also enjoying the usual offerings of terrestrial and satellite broadcasting.

Smart TVs were already available overseas, so in a sense Panasonic was playing catch-up, but it ran into opposition from the broadcast industry, which, perhaps justifiably, believed smart TVs bypassed advertisers, so at least one station refused to run commercials for the new Viera model, thinking the ads would make other advertisers uncomfortable. Eventually, the station changed its mind and started accepting the CMs, but the resistance is indicative of not only the media’s mindset, but that of the home electronics industry in general.

Some might call it a sympton of Galapagos syndrome, but the fact is Japanese manufacturers are in the smart TV race overseas. Panasonic and Sony both make smart TVs for the American and European markets, and they are available in Japan but are barely promoted. Given that Japan’s reputation as the world standard for television sets and home electronics in general has suffered in the last decade, it’s surprising that this sort of vanguard technology is being overlooked on the domestic front, but maybe it’s simply a matter of perception. According to an article published last summer in the New York Times, smart TVs are popular among younger consumers in Japan, but the TVs they are buying are not made by Panasonic or Sony. They’re made by LG, a South Korean company.

CONTINUE READING about smart TV's →

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