Japan Market Update - December 2004 Edition

Happy Holidays ,

2004 has been mostly a positive year for Japanese business conditions. The Japanese economy has strengthened, consumer confidence has risen, and deflation has mostly stalled. Many Japanese companies are reporting rising profits. Yesterday it was announced by Kyodo News that most public servants across Japan on Friday received winter bonuses more than 10% bigger than the reduced bonuses they got last year.

Investment in Japan by foreign corporations has been staggering. New and exciting developments have invigorated Tokyo, and a new airport planned to open in Nagoya in February will create more opportunities for trade and tourism--not only outbound, but inbound.

The Aichi Expo, due to open in spring 2005, will draw international visitors and enable us to learn about this gateway city in Japan and the surrounding area. New air service has been announced and we look forward to exploring business opportunities in the region.

Other positive trends this year related to the expansion of broadband services in Japan, lowering of costs of 24/7 access, and the increase of speed and bandwidth. These technological changes increased the use of Internet for travel and merchandise/shopping planning, and on-line reservations. Technology will continue to rapidly change the face of the travel industry and related industries in Japan in 2005.

The Japanese had many challenges in 2004, mostly related to weather and natural disasters. Japan had many typhoons this fall, with unusual weather conditions everywhere, and a major earthquake centered in Niigata prefecture. We continue to pray for those affected by these problems.

The currency situation has been positive for tourism to U.S. dollar destinations. The yen strengthened to 102 this past week, and, as of today, it's back in the 105 range. Seems as if there is pressure from the Japanese government to not let it get to 100 or below. If it does get into this range, we could see a further strengthening of interest in travel for all U.S. destinations. The current level is still extremely positive for travel and especially for retail purchases. See below for more details and insight on the yen situation.

At this time of the year we want to say "THANK YOU" again for all of your support, and wish you, your staff, and all of your families the very best for the season and for the New Year!

Warmest regards,
Dave Erdman

P. S. We issued our 2005 Japan national holidays/USA/Hawaii/Guam holiday calendar recently. If you have not received a copy, and would like to, please click on my name above and send me a note direct. If you need a bunch for your staff, just let me know how many.

*Japan Market News
-----Travel: JATA releases tourism promotion plan
-----Travel: Japan arrivals in Guam up slightly in October
-----Business: Banana Republic heads for Japan
-----Business: Asia demand is brewing for Hawaiian coffee
-----Business: Alamo targets Hawaii's Japanese tourists
-----Business: Strong yen bad for economy, good for tourists
-----Business: Trend: "Airport-exclusive bentos" a huge hit
-----Society: Segregation on trains paves way for "direct" marketing
-----Fashion: Machine makes cutting-edge nail art
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: JATA RELEASES TOURISM PROMOTION PLAN

Plan involves strong regional involvement to attract Japanese travelers
The Japan Association of Travel Agents unleashed an action plan with the goal of reaching 20 million overseas travelers in 2007. The current target for 2005 is 17.4 million, and 18.5 million for 2006. Hawaii, China, and South Korea will play pivotal roles as members of the "large destinations" category, which host over a million Japanese travelers each year. JATA plans to work closely with each target country's national and regional tourism offices, and tailor promotion plans for each destination. JATA also outlined five major components of the action plan: regional cultural festivals; travel photo grand prize contests; demand-generating programs taking advantage of the World Travel Fair; proactive promotion of new product planning and research groups organized by JATA; and promotion of the Travel Counselor Program. JATA said it will also actively support charter flight programs and any other travel campaigns that will potentially increase air capacity to overseas destinations.
(Source: Travel Journal International 11/22/04)
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TRAVEL: JAPAN ARRIVALS IN GUAM UP SLIGHTLY IN OCTOBER

Guam travel still popular despite Japan's disastrous fall weather
Guam Visitors Bureau reported a 7 percent increase in Japan arrivals compared to last October, beating speculations that Japan's catastrophic typhoon season would soften travel activity. As usual, women in the 18-29 age group dominated the visitor profile at 31 percent, followed by men in the 30-39 age group at 28 percent. The number of senior travelers (50+) increased slightly at 18 percent, up 5 points from September. Of the 70,000 Japanese arrivals in October, 39 percent were repeat visitors. September exit surveys also revealed that women were most motivated to visit Guam for pleasure (56%), shopping (35%), and water sports (24%). Men were more likely to choose Guam for its value, impressions from a previous visit, and golf activities.
(Source: Guam Visitors Bureau October 2004 Monthly Report; JES September 2004 Report)
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BUSINESS: BANANA REPUBLIC HEADS FOR JAPAN

GAP Inc. expects its first overseas BR outlet will be a hit among fashion-conscious Japanese
"We're often asked, when is Banana Republic coming to Japan?" said Paul Pressler, President and CEO of Gap, Inc., adding that Japanese tourists and business travelers have been loyal customers at Banana Republic's flagship locations in New York, Los Angeles, and San Francisco. As a part of a long-term international growth strategy to expand Gap's Old Navy and Banana Republic brands overseas, Japan is a crucial target market, as well as an ideal launching pad. Three stores are scheduled to open in Tokyo by next fall, with additional locations to follow in the spring of 2006. The Gap debuted in Japan in 1995, now with 75 stores spanning major cities such as Tokyo, Osaka, Nagoya, Kobe, and Fukuoka. Its highest grossing location is the flagship store in Tokyo's trendy Harajuku district.
(Source: Yahoo! Australia & NZ 11/19/04)
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BUSINESS: ASIA DEMAND IS BREWING FOR HAWAIIAN COFFEE

In Japan and Korea, Hawaiian coffee is becoming a gift-giving favorite

Chocolate-covered macadamia nuts, the king of all Hawaiian gifts, may be getting a little competition. Across souvenir shops in Hawaii and online outlets in Japan, Hawaiian coffee is creating a healthy buzz. Online stores such as Muu Muu Coffee, by Japan's no. 1 Internet portal Rakuten, and JAL-backed alohaoutlet.com are listing 100 percent Kona coffee as their top-selling items. Hawaiian Coffee Co., distributor of Lion and Royal Kona brands, reported up to a 40 percent increase in Asia sales from last year. The Korean market, where coffeehouses are suddenly hot over pure Kona coffee, is importing mainly organic and 100 percent Kona coffee. Meanwhile, Costco Japan ordered 17 additional pallets -- those enormous portable cargo platforms -- of Lion and Royal Kona gift packs to keep up with seasonal demand. Locally, Hawaii Coffee's sales to Duty Free Shopping doubled from last year.
(Source: Pacific Business News 11/23/04)
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BUSINESS: ALAMO TARGETS HAWAII'S JAPANESE TOURISTS

New perks and a marketing campaign aims to attract Japanese vacationers
Japanese tourists are renting cars in record numbers, thanks to a rebounding travel climate and a trend (especially among repeat visitors) to explore Hawaii beyond Waikiki. But even after the trouble of obtaining an international driver's license, renting a car and cruising the islands can still be intimidating. Alamo Rent-a-Car plans to change that, stepping up its services to accommodate Japanese travelers and rev up its reputation. Japanese-language driving kits are distributed to drivers, and Japanese-speaking staff is available at most offices. A discount campaign is currently being offered to Northwest Airlines' World Perks members, as well as JCB cardholders. In July, Alamo also appointed Tokyo-based Marketing Garden to handle marketing and advertising in Japan.
(Source: TJI Online 11/22/04) Back to top

BUSINESS: STRONG YEN BAD FOR ECONOMY, GOOD FOR TOURISTS

Rising yen worries Japanese industries, economists as government contemplates intervention
In November, the yen reached its highest level in almost three years at 102 yen to the dollar, alarming Japanese businesses and global economists. A strong yen thwarts Japan's export-led recovery as it eats into exporters' earnings and makes their products more expensive abroad. Nikkei stock prices have fallen dramatically as a result, hampering the gains that have been critical to Japan's economic rebound this year. The rising yen has been blamed largely on the depreciating dollar following Bush's reelection, and warnings of rising U.S. deficits. However, at a lower level the currency crisis should benefit Japanese consumers by cutting energy costs, decreasing prices on imported goods, and increasing purchasing power overseas. This should be welcome news to Pacific Rim tourism, which can expect higher Japanese consumer activity during the upcoming peak travel season. At a glance, here are yen-to-dollar monthly average ranges over the last few years:

2004	102-112
2003	107-119
2002	117-133
2001	116-127
2000	105-112
1999	102-121
1998	117-144
*1995	84-101(record-low 79.75 in April 1995

(Sources: The Economic Times 11/26/04; Asahi.com 11/24/04; Yomiuri Shimbun 11/20/04; www.x-rates.com)
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BUSINESS: TREND: "AIRPORT-EXCLUSIVE BENTOS" A HUGE HIT

Expertly packaged, regional cuisine lunch boxes raise the bottom line at Japan's air terminals
One of the pleasures of traveling through Japan by rail is tasting the various "bentos" (called "eki-ben") sold at each stop. So when Japan Airlines' branding subsidiary JALUX began offering an exclusive, teriyaki mackerel sushi bento at Haneda Airport, the media quickly named it "sora-ben" ("sora" means "sky"). Media coverage and word-of-mouth created a bento feeding frenzy; the JALUX bento alone raked in 40 million yen ($392,000) in its first month of sales in 2002. Today, it sells about twice as much. Not only was the bento ingeniously compact and vacuum-packed to withstand lengthy air travel, but its preparation was designed to eliminate any "fishy smell" that might bother fellow passengers in a crowded cabin. Since, exclusive bentos have become a Haneda trademark, from rare prosciutto sushi to delectable tonkatsu sandwiches. Regional airports are now also in the game; Hokkaido's New Chitose Airport boasts a gourmet bento filled with scallops, sea urchin (uni), and ikura, available for 1,365 yen ($13). At Fukuoka Airport, blowfish sushi ($15) is the most popular bento item.
(Source: Nikkei Trendy Magazine 12/04)
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SOCIETY: SEGREGATION ON TRAINS PAVES WAY FOR "DIRECT" MARKETING

Marketing companies take advantage of a captive, commuting, women-only audience
Back in 2001, Japanese railroad companies took a time warp (by western standards), separating men from women on peak- and late-hour train routes by installing women-only cars. Railroad executives considered the drastic move the only effective way -- not to mention fastest and cheapest -- to curb rising incidences of "railway gropers" and harassment against women. But women aren't the only group considering this move a victory. Marketing companies are capitalizing on a captive female audience. Print advertisements in these rail cars are now gender-specific: women's magazines, cosmetics, and wedding and travel planning resources. But taking it a step further, movie giant Matsutake ordered its marketing machine to hang freebies from the overhead handrails; a keyholder-alarm designed to ward off harassers, packaged with a print advertisement for their newest movie, appropriately titled "My Bodyguard." The keepsakes have been so popular that the marketing company replenishes them three times a day. Whether they lead to higher ticket sales is yet to be seen.
(Source: Fuji Sankei Business 11/29/04)
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FASHION: MACHINE MAKES CUTTING-EDGE NAIL ART

Takashimaya introduces a machine that airbrushes intricate images directly onto fingernails
Glitter and glued-on rhinestones are so passŽ, or so it seems in Tokyo, where young and beauty-conscious women dish out serious cash for intricate nail art. The craft is delicate and time-consuming, administered by licensed "nailists" (manicurists), and can run the bill up to 20,000 yen ($196) for a set of perfect nails. But last month, Takashimaya department store unleashed "e-Nail," a small machine that resembles an automatic nail-dyer. Only this unassuming apparatus is a modern-day Picasso; it airbrushes scenery, famous artwork, and even renditions of traditional Japanese "ukiyoe" (woodblock prints made popular during the Edo period), for merely 315 yen ($3) a nail. All ten digits only cost 2,100 yen ($21), although the nails require a base coat and color beforehand. Takashimaya is testing its popularity during its November debut; so far, the Hawaii theme -- palm trees with a beach and sunset background -- is reportedly the most requested design.
(Source: Tokyo Shimbun Shopper 11/09/04)
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Osechi-Ryori

During Oshyogatsu (New Year's holidays), Japanese tradition calls for eating osechi-ryori from New Year's day until January 3. It's customary to have osechi prepared by New Year's Eve so that one can just relax and eat for the next three days. Most of the dishes can last a few days in the refrigerator or at cool room temperature.

Osechi-ryori differs from household to household but, in general, it is associated with health, happiness, and a good harvest. Much of the food has special meanings. For example, tai(sea bream) is associated with medetai, meaning joyous or auspicious; konbu (kelp) is associated with yorokobu, meaning to be glad or happy about because of the similarity in the sound; and kazunoko (prepared herring roe) represents good luck with having many children. Osechi cuisine is packed in three to five-tier lacquer boxes called jubako, the most common being a stack of three. Here is a list of some of the tiers and samples of the foods that go in each:

Ichi-no-ju (Top Tier)
Kuromame (black beans), a symbol of health, are boiled in syrup.
Kazunoko, with its myriad of tiny eggs, is a symbol of procreation. It is usually seasoned with soy sauce.
Tazukuri symbolizes a good harvest, and consists of tsukudani made with small sardines.
Kurikinton is kuri (sweet chestnuts) and mashed satsumaimo (sweet potato) boiled in a sweet sauce.
Terigomame are baby sardines simmered in sugar and soy sauce till sticky.
Datemaki is a sweet cake-like egg that symbolizes knowledge.

Ni-no-ju (Second Tier)

Most items in this second box are seafood tidbits to be snacked on while imbibing hot sake.

Namasu is a salad of shredded daikon (Japanese radish) and carrot seasoned in vinegar.
Also included are: vinegar-seasoned octopus, vinegar and lemon juice marinade of squid, cucumber, grilled shrimp, and Japanese turnip. Marinated pond smelt is also popular.

San-no-ju (Third Tier)

The third box holds mostly vegetables and roots. Most vegetables in this box are seasoned with sugar, stock and soy sauce and pair well with rice. Broiled taro, twisted konnyaku and other root vegetables are common.

Yo-no-ju (Fourth Tier) Nishime (simmered root vegetables) is comprised of artistically arranged vegetables such as carrot, gobo (burdock root), renkon (lotus root), yatsugashira (taro).

Today, osechi can be purchased from department stores, grocery stores, or convenience stores, alleviating the need to cook at home and saving the Japanese days of preparation, time, and effort.

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Are you looking for a way to reach Japanese visitors going to Maui?

The Globetrotter Maui Resort Guide

There is only one pre-arrival publication that targets Japanese visitors traveling to Maui, The Globetrotter Maui Resort Guide. ÊMore than a traditional "guidebook," the Globetrotter Maui Resort Guide provides the reader with in-depth information on the uniqueness of the island of Maui in a highly visual format. ÊJapanese travelers planning excursions outside the traditional realm, often use it to supplement the Globetrotter Hawaii Guidebook. For less than $500 a month you could be reaching 50,000 Japanese visitor's traveling to Maui.

If you are interested in finding out more about this publication, please contact Joy Ishiara,jishiara@pacrimmarketing.com or Lynelle Lingaton, llingaton@pacrimmarketing.com.

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Click here for our Media Request Form or contact us.

Space Deadlines:

12/01/04 Aloha Express - February 2005
12/15/04 Maui Resort 2005
01/10/05 Nouveau - Spring 2005

Material Deadlines:

12/15/04 Aloha Express - February 2004
01/01/04 Maui Resort 2005
02/10/05 Nouveau - Spring 2005

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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Upcoming Holidays in Japan

12/23/2004 Tennou Tanjoubi -- Emperor's Birthday
12/31/2004 Ohmisoka -- New Year's Eve
01/01/2005 Gantan (Oshougatsu) --New Year's Day
01/10/2005 Seijin no Hi --Coming-of-Age Day
02/11/2005 Kenkoku Kinenbi -- National Foundation Day
03/21/2005 Shunbun no HI -- Vernal Equinox Day

Click here to see entire 2005 year.

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