Japan Market Update - June 2003 Edition

Aloha ,

This month brings positive news for the Japanese travel business. Citing improvement in demand for Hawaii, Japan Airlines and All Nippon Airways have both announced plans to restore Osaka-Honolulu and Tokyo-Honolulu flights starting in July and August respectively, thus improving the outlook for summer capacity to Hawaii.

The lifting of travel advisories by WHO and the Ministry of Foreign Affairs for Hong Kong will also help stimulate confidence in overseas air travel. The Hawaii Visitors and Convention bureau, along with top tour agencies, recently launched a Hawaii advertising campaign and a series of travel agent seminars in Japan. Many travel agencies, such as JTB Corp. and Jalpak, are focusing efforts on family travel for the summer season.

The spring has been a challenge worldwide for the Japanese outbound market, due to the war, SARS, and the very poor line-up of holidays during the "Golden Week" time period. The month of June will continue to show disappointing results, aggravated by the SARS scare. As we look back before the war, the Japanese travel market for Hawaii gained good momentum and was above 2002 results. I am confident that Hawaii will rebound and be a well-positioned destination post-SARS.

Our update below offers a snapshot of information regarding the Japanese travel market, consumer trends, culture, and ways to reach the Japanese visitor. Let me know if there is any particular information that would be helpful to you.

PacRim's Fall and holiday line-up of advertising and marketing programs offer great opportunities to reach most segments of the Japanese travel market. Now with flight schedules resuming, and renewed confidence in the growth of travel demand from Japan, its time to consider re-looking at opportunities for the Fall, as well as pre-planning for holiday season and 2004.

Let me know where we can assist you to reach your Japanese target prospects.

Best Regards,

*SPECIAL REPORT!!
*Japan Market News
-----Chikyu no Arukikata (GlobeTrotter) releases "Aloha Card"
-----Tour wholesalers join forces to promote Hawaii
-----ANA to increase flights in August
-----Japan Airlines increases flights on July 15
-----Travel agencies move up summer tours
-----Japan Airlines to focus on areas not affect by SARS
-----JALPAK targets a 10% increase this summer
-----JALPAK new tour: "Hawaiian Big Daddy"
-----Kinki Nippon tourist markets to families this summer
-----OVB sponsors Oahu Festival in major cities
-----Japanese spending up 8.8% over last year
-----Online ad business booming
-----Broadband users approach the 10,000,000 mark
-----Click through rates increase from email users
-----Yahoo Japan remains the most frequently visited site
-----Rakuten leads in virtual shopping on the web
-----Young couples seek fancy furnishings
-----Number of children under 15 drops to record low
-----CanCam survey reveals trends for summer bonus spending
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

CONSUMER TREND REPORT FOR 2002

The following report is based on information compiled by Hakukodo Inc, one of Japan's largest advertising and public relation firms. Hakuhodo analyzed the most popular products that consumers bought in 2002 and the reasons behind their purchases, based on socioeconomic and consumer sentiment. The report was released with five main "touches" of consumer trends:

1. "A Touch of Japonais"
The pleasure of blending old and new hits Japan. This fusion made vintage products and trends seem fresh and novel. Examples of this trend were cafes serving rice balls and mini bonsai with moss ball plant arrangements.

2. "A Touch of Professional"
Near professional standard equipment that was unlikely to be found in the past were hot sellers in 2002. Products such as crime-prevention equipment, home theatres, new model sport cars, and vintage guitars were popular.

3. "A Touch of Celebrity"
Upgrading some daily necessities to gain a sense of celebrity also gained popularity. Branded salt, meat, and vegetables grew popular for buyers to "spice up their often boring lives with a touch of luxury". Brand name underwear, cosmetics, and fashion brands were hot sellers.

4. "A Touch of Technology"
Getting up to speed on the latest user-friendly, high-tech gadgets were the talk of the town. Camera-equipped mobile phones, light vehicles, large text display mobile phones, and broadband internet access were widely popular with consumers.

5. "A Touch of Health/Beauty"
The overall trend in health and beauty were finding products that would produce results without the effort on part of the consumers. Popular items included negative ion-emitting appliances, electric muscle stimulators, and Caspian Sea Yogurt.

(Source: Travel Journal International 5/26/03) Back to top

CHIKYU NO ARUKIKATA RELEASES "ALOHA CARD"

Chikyu no Arukikata (Globetrotter) has introduced a special credit card called the "Chikyu no Arukikata Aloha Card." The card is a tie up with the Nicos Credit Company and Globetrotter, Japan's largest producer of travel guidebooks. The card provides benefits such as major discounts at participating hotels, airlines, and rental car services. Members can receive discounts ranging from 5% to 50% at hotels and condominiums on all four major islands (Oahu, Big Island, Maui and Kauai). They also are entitled to 10% discounts on optional tours; discounts from 10% to 40% from Hertz Rent a Car; and between 25% and 30% off prices for the Waikiki Trolley. Like a regular credit card, the Aloha Card can be used anywhere else in Japan and other overseas destinations. (GlobeTrotter News - Japan) Back to top

TOUR WHOLESALERS JOIN FORCES TO PROMOTE HAWAII

The Hawaii Visitors and Convention Bureau (HVCB) will host a series of tour product seminars hand-in-hand with four major travel wholesalers as part of measures to boost demand. It is a maiden attempt for multi-wholesalers getting together and hosting product seminars focusing solely on Hawaii for retailers. The wholesalers have agreed on joining forces to boost the slumping overseas travel market by promoting Hawaii as a destination of sizable capacity. The Big Hawaii Sales Seminar for Summer primarily targeting sales clerks at retail outlets will be conducted in June at seven locations in Tokyo, Osaka, Nagoya, Fukuoka, Sendai, Hiroshima and Sapporo. JTB Hawaii, JALPAK, Kinki Nippon Tourist and Nippon Travel Agency will each explain characteristics of their summer holiday products. The forming of a joint effort reflects the state of crisis that they as wholesalers face today as overseas travel demand has deteriorated. The idea of a joint seminar was formed after the four wholesalers' product line-ups were made available in April. (Travel Journal International 5/26/03) Back to top

AIR NIPPON AIRLINES (ANA) TO INCREASE FLIGHTS IN AUGUST

In response to the higher market demand for Honolulu flights, ANA Group will increase their Narita-Honolulu service by adding one more flight per day beginning on August 1st. The extra flight will be operated by ANA's subsidiary, Air Japan. (ana.co.jp 5/22/03)Back to top

JAPAN AIRLINES ADDS MORE DAILY FLIGHTS ON JULY 15

Japan Airlines, the top carrier of Japanese visitors to Hawaii, will restore the flights they cut earlier this year in anticipation for the surge of travelers coming to Hawaii this summer. Currently, JAL flies 14 flights a week from Tokyo and 7 flights a week from Osaka. Beginning July 15, the number of flights will increase to 21 flights a week from Tokyo and 14 flights a week from Osaka. This will bring a total of 5 daily flights to Hawaii from Japan's largest cities. The planned July 15 date is about one week after the Governor's Japan mission with top travel industry officials that now appears to be the perfect timing to develop a strong summer tourism season for Hawaii. (Honolulu Star-Bulletin 6/10/03)Back to top

SLUMP-HIT TRAVEL AGENCIES MOVE UP SUMMER TOURS

Major travel agencies have launched their sales campaigns for summer overseas package tours earlier than usual this year. The agencies are promoting tours to Hawaii, US Mainland, Europe and Oceania in particular, with some discounts up to 40%. In addition, JTB and Kinki Nippon Tourist have started selling package tours to Hawaii ahead of other areas because Hawaii enjoys relatively steady demand from Japanese travelers. Kinki Nippon began selling summer tours in late April, while JTB did the same in early May. (Nikkei Weekly 5/26/03)Back to top

JAPAN AIRLINES TO FOCUS ON AREAS NOT AFFECTED BY SARS

In order to minimize the effects of SARS, Mr. Isao Kaneko, president of JAL systems, said in an interview on May 23 that the company will maintain a good balance of destinations that have healthy revenue and will reinforce its promotion of international flights to areas less affected by SARS, such as Hawaii. (Nihon Keizai Shimbun 5/24/03) (Yahoo! News Asia 4/25/03) Back to top

JALPAK TARGETS A 10% INCREASE THIS SUMMER

JALPAK (Japan Airlines Travel) has established a sales target this summer to increase the number of clients by 10% over last year's numbers. Special promotions include programs that offer hands-on experience in local activities. For example, travelers can sign up for surfing and ukulele classes in Hawaii, or experience in raising a Koala Bear in Australia. JALPAK will also lower their prices for these special tours in comparison with their other tours. In the case of Hawaii you will see a reduction of 8,000-10,000 yen for these tours. (The Travel Vision 6/2/03) Back to top

JALPAK NEW TOUR: "HAWAIIAN BIG DADDY"

JALPAK, in a cooperation with NikkeiBP Network's adventure book 'Hawaiian Big Daddy", will launch a travel product of the same name that will offer activities for parents and children. The tour will be available from July 16 -- September 1 and will feature activities such as star gazing and canoe tours. "Hawaiian Big Daddy" is a story about a grade school boy and his sister who come to Hawaii for the summer. (The Travel Vision 5/26/03)Back to top

KINKI NIPPON TOURIST MARKETS TO FAMILIES THIS SUMMER -- 60% OF TOURS AIMED AT HAWAII

Popular travel agency Kinki Nippon Tourist (KNT) will be launching a summer campaign called "Family Resort" as part of its summer Holiday package tour series. The tour will target family travelers leaving Narita airport and will offer 1/2 price for children. 60% of the tours are aimed at Hawaii (KNT is hoping to book 10,000 travelers: 6,000 to Hawaii and 4,000 to all the other destinations). There will also be three-generation traveler discounts for grandparents. (HVCB Japan Travel Weekly 5/30/03)Back to top

OVB SPONSORS OAHU FESTIVAL IN MAJOR CITIES

From June 6-15, the Oahu Visitors Bureau (OVB) held Hawaiian tradition and culture events in Fukuoka and Nagoya (two of Japan's largest cities that have direct flights to Honolulu). The "Oahu Festival" featured hula dancing by hula halau (hula dance groups) from Oahu and ukulele shows featuring popular Hawaii recording artist Jake Shimabukuro. Participants were also introduced to quilting, coconut husking, and fire dancing. (HVCB Japan Travel Weekly 5/30/03)Back to top

JAPANESE SPENDING UP 8.8% OVER LAST YEAR'S FIRST THREE MONTHS

The state of Hawaii has released its figures for visitor spending over the first three months of the year and has found that Japanese visitors have continued to spend the most per day at $242 per person, up 8.8% over the first quarter of last year. Following the Japanese were US East visitors who spent $163 per person, and US West visitors who spent $151 per day. (Honolulu Advertiser 5/24/03) Back to top

ONLINE AD BUSINESS BOOMING

The online advertising market is growing as major businesses in Japan are discovering newer and more effective ways to sell their goods and services on the web. Five of the seven listed online agencies saw their billings grow 50-80% from January to March in comparison to the same period last year. Companies such as Cyber Communications Inc. (a Dentsu affiliate), and Digital Advertising Consortium (a Hakuhodo affiliate) has seen earnings grow even as they have implemented ad rate increases. (Nikkei Weekly 6/2/03)Back to top

BROADBAND USERS APPROACH THE 10,000,000 MARK

The number of broadband (high speed Internet) users in Japan is quickly approaching the 10,000,000 user mark. According to the Ministry of General Affairs, 9,960,000 Japanese are using high speed Internet lines. This is 2.3 times more than last April. (Zakzak 5/30/03) Back to top

CLICK THROUGH RATES INCREASE FROM EMAIL USERS

According to the latest survey done from January to March of this year by Double Click Japan , the e-mail opening rate and the click through rates has increased, overcoming the flood of SPAM. Although many have showed their concern on SPAM e-mails, the survey showed an 8% increase in the e-mail opening rate and 11% increase in the quick-through rate over the period of October to December 2002. "This proves that consumers and email receivers are able to distinguish mails that they want/expect from SPAM mails,"says Eric Kirby who is in charge of DoubleClick strategy service. (Yahoo Japan News 5/25/03) Back to top

YAHOO JAPAN REMAINS THE MOST FREQUENTLY VISITED SITE

Users of the portal site run by Yahoo Japan browsed a record 13 billion pages in April. The number of households that accessed the site stood at just under 20 million in March, which means that 75% of all Internet users in Japan accessed the portal site at least once during the month according to Tokyo-based NetRatings Japan, Inc. (Nikkei Weekly 5/26/03) Back to top

RAKUTEN LEADS IN VIRTUAL SHOPPING ON THE WEB

Rakuten leads all competitors in virtual shopping mall operations with 6,349 tenant shops at the end of March, up 16% on the year. Rakuten has also acquired Lycos Japan and Infoseek Japan in hopes of expanding its business by integrating the operations of its virtual shopping mall with the two portal sites. Last year, Ebay Inc., pulled out of the Japanese market after being unable to penetrate it. (Nikkei Weekly 5/26/03)Back to top

YOUNG COUPLES SEEK FANCY FURNISHINGS

Despite Japan's ailing economy, brand name and imported furniture is more popular than ever. Many new stores that contain high-end furniture have recently opened in posh neighborhoods such as Ebisu and Aoyama in Tokyo. About a decade ago, most people buying import furniture were celebrities and executives, but these days people in their 30's have been the main consumers. (Nikkei Weekly 5/26/03)Back to top

NUMBER OF CHILDREN UNDER 15 DROPS TO RECORD LOW

Children under the age of 15 accounted for 14.1% of the total population in the latest count according to the Ministry of Public Management, Home Affairs, Posts and Telecommunications. This is down 0.2% from the previous year to set a record low. In 1950, the ratio stood as high as 35.4%, 23.5% in 1980 and 18.2% in 1990. Japan is at the bottom among major industrialized nations in terms of percentage of children. In a similar survey, 21.2% of the population in the US is under the age of 15. (Nikkei Weekly 5/16/03)Back to top

CANCAM SURVEY REVEALS TRENDS FOR SUMMER BONUS SPENDING

Cancam Magazine, one of the most popular magazines for young women office workers, has released their latest survey that answers the question "what are you going to do with your summer bonus?". The most frequently chosen answer was purchasing a handbag, followed by buying a watch, wallet, car, and in fifth place a business suit. Coming in sixth was overseas travel. When asked what is the most desired destination, Hawaii was the most frequently chosen destination. (CanCam 5/23/03) Back to top

RICE PLANTING

Rice planting is the act of transplanting rice seedlings from the seedbed to a rice paddy. In Japan, it usually takes place from around the end of April to late June, depending on the region.

For centuries, each seedling was transplanted into neat rows by hand, making the process extremely time consuming. It also had to be done in a hurry, and so during the rice-planting season, people worked from dawn to dusk, regardless of the weather. The task was very labor intensive, and so often neighbors would help out with planting one another's fields.

In ancient times, rice growing was considered a religious act, and there were many taboos that had to be observed. Men and women had different roles, with women being largely responsible for planting the seedlings and men for drawing water into the paddies.

Thanks to mechanization, rice growing is not as time consuming and physically demanding as in the past. With the construction of irrigation channels and efforts to improve rice stock, moreover, more, better-tasting rice is grown today. In recent years the number of people who make their living solely as rice farmers has decreased; more farmers now have jobs other than tending to rice fields.

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ALOHA EXPRESS MAGAZINES

With so many ways to market to Hawaii's Japanese visitor coupled with a limited budget, smart advertising decisions are more important than ever. This is why PacRim Marketing is proud to support Aloha Express Magazine. The editors strive to create targeted media that will meet your needs.

For example, the September Quarterly issue is scheduled to include a special insert for spa and health related business along with an insert dedicated to memorable golf courses you will find on Oahu.

The November issue will include a special Ala Moana Center pull out book that will be distributed throughout the mall during the crucial New Year holiday season. There will be a coupon book in the November issue for those of you who have found offering discounts an effective way of bringing in more business.

It is not too late to call us to find out more about these upcoming media releases as we strive to find the best media available for you. Please click here for more details.

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Don't wait and be forgotten! Want to be a part of these books? Click here for our Media Request Form or us.

Space Deadlines:

Aloha Express - September Quarterly - July 1, 2003
Nouveau - Ala Moana Center Selection - September/Fall issue - July 10, 2003
Chikyu no Arukikata - Maui Resort - July 15, 2003
Chikyu no Arukikata - Kauai Resort - July 12, 2003
Aloha Airlines - Spirit of Aloha - November issue - September 15, 2003

Material Deadlines:

Aloha Express - September Quarterly - August 4, 2003
Nouveau - Ala Moana Center Selection - September/Fall issue - August 10, 2003
Chikyu no Arukikata - Maui Resort - August 1, 2003
Chikyu no Arukikata - Kauai Resort - August 1, 2003
Aloha Airlines - Spirit of Aloha - November issue - September 30, 2003

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6/15 Father's Day
7/7 Tanabata (Star Festival)
7/21 Marine Day (Holiday)
8/13-8/15 Obon Season
9/15 Respect for the Aged Day
9/23 Autumnal Equinox Day
10/13 Sports Day

Click here to see entire year.

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