Recovery a long shot •Slack in Japan could throw back CNMI recovery plan: JAL brass

Although Japanese arrivals to the CNMI have shown little signs of improvement, the recovery of Japan’s tourism market and economy will not take place until the year 2001, according to an airline executive.

Dousing hopes of many businessmen and local officials on the immediate rebound of the Japanese economy, the world’s second largest, any sign of improvement would only be a very slight increase compared to what was experienced in the late 1980’s, said Tom Shigemitsu, director for international passenger marketing and sales planning of Japan Airlines.

This developed as an analysis of the island’s economy showed that the Northern Marianas is headed for recession between now and 2005. Following the downturn of the island’s tourism economy, visitor arrivals may only grow by five percent annually over a six-year period, said Dr. Paul Callaghan a professor from the University of Guam.

Due to the recession in Japan, there has been a sharp decline in group tours funded by organizations but there will be no full recovery even if the economy returns to normal.

Shigemitsu urged the CNMI to tap the growing number of students who join school excursions since this market segment is seen to shift from domestic tours to foreign travel. There has been coordination between carriers and travel agents to promote school excursions to many destinations.

Various companies and organizations in Japan are undergoing restructuring which will lead to more cost conscious operation such as cut in employee welfare tours.

However, incentive tours are still popular among a number of companies such as Charle, Miki Prune, Amway and Sony Life Insurance which continue to look for overseas attractions because they send thousands of salespersons every year.

Among the factors that will affect the popularity of destinations will be the shift of air capacity, the sharp decline in the number of young women going abroad and change in Japanese attitude toward travel.

Foreign carriers that have cut down on flights from Kansai and other local airports have influenced the operation of package tours in different destinations.

Cost-conscious travelers from Japan prefer to fly to nearby Asian countries, especially Korea which will continue to be a major destination among Japanese tourists. The inclination of Japanese towards nature promises to favor areas less visited by tourists like Scandinavia and New Zealand.

The honeymoon market showed signs of stagnation for a while with only 700,000 weddings a year, but now that the second baby boomers have reached marrying age, the number of newlyweds has grown to about 800,000, 97 percent of which can be expected to go abroad for their honeymoon.

Shigemitsu noted that recent newlyweds prefer to hold their wedding ceremony overseas with their families only since they no longer want to spend a fortune on expensive wedding ceremonies at Japan’s hotels to accommodate friends and officemates.

Individually-arranged travel or FITs are estimated to account for 35 percent of Japan’s total market. Historically, FITs , which consist mainly of discount air tickets and free hotel accommodations, were sold almost underground by a few specialized agents.

“But now, all major travel firms have joined this market giving them much broader character,” he added. Formerly catering to the young, the discount market now targets all age groups and will likely grow accordingly.

The senior travel market is another growth area for the future. Japanese aged 64 years old and above now exceed 20 million. One in six person is now 65 years old or more. It is estimated by the year 2015, one in four will be over 65 years old.

Even as Japan has the most number of senior citizens in the world, elderlies can still enjoy 20 more years of their life after retirement. Current pensioners, most of whom are 60 years old, are recipient of the world’s most generous pension at 230,000 yen or $2,000 a month. No wonder, the senior citizens take luxury cruise tours to Europe.

Pleasure package tours organized by wholesalers still enjoy great popularity. According to the Ministry of Transport survey, package tour participants grew by 2.3 percent from April to November 1998 despite the overall decrease in total number of travelers.

During this year-end and New Year holidays, bookings for major wholesalers reportedly registered a 4.5 percent increase which can be attributed to lower package tour prices, an indication of a strong demand for easy access to tours paid for by individuals.

Expanding the tourism market is the only way to mitigate the impact of the potential loss of the garment industry in the CNMI, said Callaghan.

Since the island now depends on the garment industry, the Northern Marianas would have to expect higher unemployment rate and lesser income if the garment factories suddenly shuts down, he added.