Japan Market Update - June 2004 Edition

Aloha ,

After returning from a three week trip from Japan, I was encouraged by what I learned about this summer's business outlook for the Japanese outbound travel market. The new service initiated by United Airlines began on June 11th from Narita to Honolulu will benefit Hawaii's summer season. The new flight includes 10 first class seats and 42 business seats. This addition will increase United's daily flights to two from Narita and one from Kansai. At this point, the bookings on the new flight for summer are very high. This summer will also bring additional charter flights from Japan to Hawaii. Marketers in Japan are beginning to focus on programs and promotions for the fall.

Nikkei Weekly announced on Monday that the consumer confidence index rose 2.9 points, the highest level since September 1991. The employment index increased 3.2 points, the highest level since March 1991 reversing the unemployment rate. The strongest economic growth of the country is in the Tokyo/Kanto region. Slowly but steadily, the effects of positive economic activity and consumer confidence are moving outside the Tokyo metropolitan area to other regions.

Noted below are some important Japanese holiday dates for the summer and early fall to assist you in planning your marketing efforts, employee scheduling, and potential travel to Japan. All holidays for Japan, Hawaii, and the US are noted on our PacRim web site at http://www.pacrimmarketing.com/info/index.html

For your calendar update, this year's JATA/World Travel Fair will be held in Japan on September 23-26. This travel fair showcases world destinations to the Japanese media, travel agents, and consumers. This month's "Media-of-the-Month" gives you an opportunity to participate with Ala Moana Shopping Center in this important event. Hawaii-Arukikata.com (http:globetrotterhawaii) will also have an exhibit at this year's show--showcasing the site's extensive hotel booking capabilities, optional tours, and in-depth information about Hawaii, shopping, and Hawaii's unique culture in Japanese.

If you would like more information about our programs or if there is anything I can assist you with, please don't hesitate to contact me.

Warmest regards,
Dave Erdman

*Japan Market News
-----Travel: Golden Week travel surged
-----Travel: Timeshares boom nationwide
-----Travel: JAL takes broadband to the skies
-----Travel: JALPAK targets family, women, and hula lovers
-----Fashion: Virtual dressing room makes browsing a breeze
-----Business: Tiffany to open new stores in Japan
-----Business: NTT scores record profit
-----Business: Watabe Wedding expands to Tahiti
-----Business: Diet tea sales skyrocket among middle-aged men
-----Technology: Wi-Fi hits the skies
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: GOLDEN WEEK TRAVEL SURGED

Air travel shows recovery as Hawaii, Guam and Saipan routes among top load factors
This year's Golden Week figures showed that not only has Japanese travel successfully rebounded from last year's slump, but has exceeded figures from two years ago. On peak travel days (4/28 to 5/1 this year), arrivals were up an average of 39 percent compared to 2002. Strong arrivals have not ebbed post-Golden Week, as preliminary reports show they are exceeding 2002 levels by about 3.5 percent. Airlines reported high load factors from Japan for the May holidays, with mainland-bound routes the busiest at 79.4 percent, followed by Honolulu at 78.6 percent, and 66.3 percent on Guam and Saipan routes. (Sources: DBEDT statistics; J-Wing Travel 5/17/04)
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TRAVEL: TIMESHARES BOOM NATIONWIDE

Resort destinations benefit from billions spent by timeshare owners
A recent surge in timeshare sales across the country prompted a nationwide survey on their vast economic impact. PricewaterhouseCoopers reported the timeshare industry contributed $66.7 billion to the U.S. economy in 2002 based on initial sales, economic output, jobs created, renovation and maintenance, and taxes. The study highlights the far-reaching ripple effect of money spent by timeshare vacationers, adding that they tend to travel in larger numbers, stay longer, and interestingly, are likely to spend a couple of nights in hotels when they have overstayed their timeshare period. Hawaii's timeshare market represents 7.3 percent of the nationwide inventory, but is one of the nation's fastest growing; the number of units grew 71 percent in the last six years. (Sources: Pacific Business News 5/4/04; The Honolulu Advertiser 5/9/04)
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TRAVEL: JAL TAKES BROADBAND TO THE SKIES

In-flight Internet service will start at $7.95 on select flights
In collaboration with Connexion by Boeing (CBB), Japan Airlines will begin flying Internet-ready 747s by this December. JAL is CBB's Asian launch customer, and will help pioneer in-flight connectivity in its region (see related Technology article below). The service, which will allow long-haul flight passengers to access the Internet via CBB's portal site, send and retrieve emails, and tap into firewall-protected corporate Intranets, will range between a 30-minute metered rate of $7.95 to $29.95 for unlimited access on flights over six hours. JAL's first wired aircraft is scheduled for the Narita-London route in December, after which the service will be gradually rolled out for 68 long-haul aircraft. All Nippon Airways is next in line to introduce the service, having signed a definitive contract with CBB in January. (Sources: J-Wing Travel 5/17/04; Boeing News Release 11/12/03; japan.internet.com 9/10/03)
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TRAVEL: JALPAK TARGETS FAMILY, WOMEN, AND HULA LOVERS

Japan Airlines tour packages follow travel trends, offer variety and value
JALPAK, the packaged tour arm of Japan Airlines, began featuring travel products slated to be popular for the summer season. With family travel on the rise, JALPAK hopes to increase family bookings by 75 percent this summer with an array of limited edition, family friendly tour packages including the "JAL Feel New Hawaii" and "JAL Do! Hawaii" campaigns. JALPAK anticipates 200 spectators to sign on for the third annual Hula Ho'olauna Aloha festival in early July, a three-day hula competition, exhibition, and workshop event specifically organized for Japanese halaus and hula enthusiasts. Targeting women in their 30s, JALPAK expects to book 200 "Rewarding Myself" packages feature off-the-beaten-path tours to Italy and France, equipped with a personal concierge service and cooking lessons at natives' homes. (Sources: JALPAK; JALPAK Press Release 1/30/04; Travel Vision News 5/31/04)
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FASHION: VIRTUAL DRESSING ROOM MAKES BROWSING A BREEZE

Upscale boutique features personalized, virtual fitting room in store and at home
Three of Tokyo fashionistas can try as many outfits as they please, and look fabulous in each one, thanks to an online "fitting room" at Tokyo's newest business formal boutique, Vie Propre. A customer's picture is uploaded to a PC, montaged onto a model's figure, after which the customer can "try on" outfits in various styles and colors. The personal account is also accessible from home, giving customers the luxury of browsing at their leisure. To ensure the right fit -- or for a reality check -- Vie Propre recommends customers to visit the store and see the clothes for themselves after browsing at home. To see Vie Propre's virtual fitting room, go to www.viepropre.com/haoreba.html. (Sources: Tokyo Shimbun Shopper 4/9/04; www.viepropre.com)
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BUSINESS: TIFFANY TO OPEN NEW STORES IN JAPAN

Despite lagging sales in Japan, U.S. luxury retailer plans expansion in Tokyo and Osaka
Two additional stores by this fall will bring Tiffany & Co. locations in Japan to 52, exceeding the number of stores in the 50 states. The announcement comes merely weeks after the company posted a 10 percent decline in first-quarter sales in Japan, whereas U.S. sales rose 20 percent during the same period. Citing a weak economy and softness in Tiffany's silver sales, the company's Japan market has teetered between marginal gains and substantial declines in profit since 2001. The store openings, however, demonstrate Tiffany's plan to stay ahead of Japan's improving retail climate. According to Katsuhiko Nitta, president of Tiffany & Co. Japan, Inc., "Tokyo's Marunouchi area and Nishi-Umeda in Osaka are emerging as vibrant shopping districts with great growth potential." (Sources: Tiffany & Co. News Release 5/13/04, 6/02/04; www.smartmoney.com 5/13/04)
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BUSINESS: NTT SCORES RECORD PROFIT

Japanese telecoms giant attributes success to restructuring, mobile and broadband technologies
Nippon Telegraph and Telecom Co. posted 643.9 billion yen ($5.6 billion) in net profits for the last fiscal year, nearly tripling last year's profit of 233 billion yen. Operating profit also hit an all-time high, up 14.4 percent from last year to 1.56 trillion yen. NTT owes much of its success to a surge in broadband subscriptions; the company currently has 4.1 million ADSL users, and expects fiber-optics subscriptions to reach 2 million this year. NTT is still wary of competition and saturation in the mobile phone market, and plans further cost-cutting to pad the bottom line. NTT expects to lower handset costs, lower incentives to retailers, and continue promoting discounts for new subscriptions. (Sources: www.bloomberg.com 5/12/04; Channel News Asia 5/14/04)
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BUSINESS: WATABE WEDDING EXPANDS TO TAHITI

Japan's leading bridal consulting company adds Tahiti to their resort wedding line-up
Hawaii's wedding market will face stiffer competition starting this year, as Watabe Wedding sets up shop in Tahiti to offer island nuptials to Japanese couples. According to Watabe, Tahiti represents a lucrative business opportunity; 90% of Japan's 24,000 visitors to Tahiti last year were honeymooners, but only 2.5 % actually tied the knot on the island. Watabe will offer 13 packages starting at 300,000 yen ($2,700) on Tahiti and Bora Bora, ranging from intimate, barefoot weddings to elaborate, family affairs. With Japan Airlines' recent code share agreement with Air Tahiti Nui, direct flights from Narita to Tahiti's Papeete make the island weddings more marketable. Watabe expects 210 reservations in the first year, and 1 million yen ($910,000) in sales. Outside Japan, Watabe operates in nine countries, and opened its first overseas office in Honolulu in 1973. (Sources: TJI Online 5/16/04; Watabe Wedding Press Release 4/27/04)
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BUSINESS: DIET TEA SALES SKYROCKET AMONG MIDDLE-AGED MEN

Diet industry notices rise in obesity, targets health products to male population
It is no coincidence that 60 percent of Japan's latest diet drink is sold to middle-aged men. The obesity rate rose 40 percent in 20 years, and now a third of Japanese men between 30 and 69 are considered obese according to a government survey. Thanks to government-sponsored awareness campaigns and marketing efforts by household product company Kao Corporation, the fat-burning "Healthya" green tea has become a groundbreaking hit. A year since its release, Healthya sales reached 20 billion yen ($175 million). One key to success has been product placement; instead of being sold at drug stores, where men may feel embarrassed to browse for diet products, cases of Healthy can be purchased at major convenience stores. (Sources: Yahoo! News Asia 5/16/04; Kao Press Release 1/19/04)
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TECHNOLOGY: WI-FI HITS THE SKIES

Boeing and NTT plan to synchronize services for select mobile Internet users
NTT DoCoMo's Mzone customers may only need their phone to take advantage of Boeing's in-flight Internet access. Mzone is NTT DoCoMo's popular Wi-Fi -- wireless fidelity -- phone that can peruse wireless networks wherever the frequency is available. Connexion by Boeing (CBB) and NTT are working to link their wireless LAN networks, allowing Mzone customers to access their accounts enroute and be billed for the service on their usual monthly statement. The service may be offered as early as August. The companies will also consider jointly developing new in-flight wireless services for international passengers. (Sources: NTT DoCoMo Press Release 4/27/04; www.nttdocomo.jp/p_s/mzone)
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Tanabata

Once a year, on July 7th, the Japanese celebrate Tanabata, The Festival of the Stars, a celebration of the day when two lovers Orihime and Hikoboshi, are said to meet on the bank of Amanogawa (The Milky Way). According to the legendary Chinese love story upon which this tradition is based, Orihime was a weaver of the Emperor of Heaven. She was so occupied with weaving that she had no leisure time to take care of herself or to weave garments for herself. Feeling sorry for Orihime, the Emperor of Heaven married her off to Hikoboshi, a herdsman who dwelt on the opposite side of the Amanogawa. The couple fell so deep in love with each other that they forgot to tend to their work. Enraged, Emperor of Heaven separated them on opposite sides of the Amanogawa. Being sympathetic to their love, however, he granted them one night a year when they were allowed to cross the sky and meet.

Although the modern celebration of Tanabata varies widely according to the location, a common feature of this festival is to write your wishes on tanzaku paper (long narrow strips of colored paper) and hang them on bamboo branches along with other small ornaments and talismans. The most common Tanabata decorations are colorful streamers. Streamers are said to symbolize the weaving of threads. Other common decorations are Toami (casting net), which means good luck for fishing and farming and Kinchaku (large purse), which means wealth. The decorated bamboo branch is tied to a pole and is usually placed outside of the house. Although all those traditional habits of the Tanabata festival have mostly disappeared in recent days, it is still observed in many regions in Japan. The festivals in Sendai-City, Miyagi Prefecture and Hiratsuka-city, Kanagawa Prefecture, are particularly well known. Huge Tanabata decorations fill the main streets in these cities and attract millions of visitors every year.

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With over 700 booths, the annual JATA World Travel Fair is Asia's largest travel trade and consumer travel exhibition. It provides a unique opportunity for exhibitors to reach three key targets for travel promotion in Japan: travel trade, media, and consumers-in one location. Last year's event attracted over 100,000 visitors, including 30,000 travel trade and media representatives.

The fair includes representatives from destinations all over the world. Each year, you can find a large section at the fair that is dedicated to Hawaii travel. One of the main exhibitors in the Hawaii location is Ala Moana Center. During the three day fair, representatives from the Center speak to fair attendees and pass out marketing collateral material created by Aloha Express and Nouveau. Last year, over 10,000 copies of Ala Moana Center materials were distributed. Based on the incredible demand for these marketing brochures, we plan to increase the number of copies to be distributed this year.

If you have a location in Ala Moana Center and would like to be part of this exclusive marketing campaign, please contact Joy Ishiara at 949-4592 or toll free at 1-800-338-4502 ext. 811 or Toby Tamaye at ext. 814. They will be happy to explain the advertising options for your company. This year's JATA World Travel Fair will be held on September 24-26 at Tokyo Big Site in Odaiba. This event only happens once a year, so please don't miss out on this opportunity!

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Click here for our Media Request Form or contact us.

Space Deadlines:

07/10/04 Nouveau - Ala Moana Center Selection September 2004
07/01/04 Aloha Express - September 2004
08/02/04 Chikyu Hawaii Mook - November 2004

Material Deadlines:

08/10/04 Nouveau - Ala Moana Center Selection September 2004
07/15/04 Aloha Express - September 2004
09/02/04 Chikyu Hawaii Mook - November 2004

It is not too late to call us (808-949-4592 or Toll Free 1-800-338-4502) to find out more about these upcoming media releases as we strive to find the best media available for you.

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06/20/2004 Chichi no Hi -- Father's Day
07/07/2004 Tanabata -- Star Festival
07/20/2004 Umi no Hi -- Marine Day
08/13/2004 Obon Season begins (8/13-8/15)
09/20/2004 Keirou no Hi -- Respect-for-the-elderly Day
09/23/2004 Shubun no Hi -- Autumnal Equinox Day

Click here to see entire 2004 year.

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