Japan Regional Economies:

https://mainichi.jp/english/articles/20200217/p2g/00m/0bu/043000c

Article:

TOKYO (Kyodo) -- Japan's regional economies have been dealt a blow from plummeting numbers of foreign visitors, largely affected by a ban on group overseas travel by China to curb the spread of COVID-19, the pneumonia-causing coronavirus.

Comments:

Just like South Korea, many regional economies have depended heavily in Chinese tourism. Jeju in South Korea, the island off the coast of South Korea, has seen a big decrease in Chinese tourists the past two months. 

While its logical to create business where there is demand or potential for demand, its also logical that the tourism industry is a very volatile industry meaning there could be times of high growth and a lot of economic activity and times, like now, or big challenges that can greatly reduce economic activity.

Article:

While the Japanese government has extended financial support to smaller businesses in the tourism industry, the global crisis could spell disaster for local economies if prolonged.

"We've received cancellations not only from visitors from China, but also from Southeast Asia. With the trend of people avoiding crowds (due to fears of catching the virus), the effects will likely drag on," said a representative from the Hokkaido Bus Association.

In a survey of its chartered-bus operator members, it found around 1,700 buses have been cancelled for trips between January and March -- equivalent to a loss of 110 million yen ($1 million).

Comments:

As this situation continues, and it in the news everywhere, there are going to be visitors, tourists, and even Japanese tourists, in Japan that are going to think twice about traveling anywhere until this situation improves and people no longer feel afraid to travel and move around.

The worst part of this for Japan might even be seen yet as we get closer to the summer Tokyo 2020 Olympics.

This virus situation is less than two months old and already large industries have been greatly affected. It just goes to show how some industries and sectors are vulnerable to any slight changes or major changes in a very short period of time.

Article:

Meanwhile, the annual snow festival in the northern Japanese city of Sapporo, popular among Chinese travelers, saw visitor numbers plunge some 710,000 through Feb. 11 -- to 2.02 million -- compared with last year.

According to the Hokkaido prefectural government, at least around 147,000 guests have cancelled accommodation bookings in Sapporo and other cities in the district for stays up until March.

The prefecture estimates a loss of over 20 billion yen in tourism revenue if there are no Chinese tour groups until next month.

Comments:

Lets hope the Japanese government will step in a provide assistance for those businesses that have been affected by this situation. And it might get worse as Hokkaido is also a popular summer tourist destination, for Japanese tourists and international tourists too during the summer.

Article:

Osaka, in western Japan, has also taken a big hit.

The open-air observatory in the city's Umeda Sky Building attracts around 1.2 million visitors per year, mainly from abroad. But it has recorded a decline in numbers since late January, with recent figures down more than 30 percent from a year earlier.

Due to cancellations, Royal Hotel Ltd., the Osaka-based operator of the Rihga Royal hotels chain, last week downgraded its earnings estimate for the year through next month. It now expects group operating profit to fall 70 percent from the previous year.

Comments:

All areas of Japan, where tourists, from where ever, are deciding not to travel or do what they might normally do in normal times. As we know these are not normal times for the tourism industry, as again, it takes just one negative situation, maybe even less than two months old, to cause major problems to many in an industry.

Article:

The southwestern island of Kyushu is facing similar struggles.

Overseas visitors to an active volcano on Sakurajima Island in Kagoshima Prefecture have fallen by around half due to the sharp drop in Chinese travelers, according to the operator of a rest stop there.

"Tourism is Sakurajima's lifeline. I hope (the virus) is stamped out as soon as possible," said assistant manager Miyuki Ueyama.

An official from Miyazaki Prefecture's tourism promotion division also expressed concern about the ripple effect of the virus, saying there have been cancellations even among domestic travelers.

Tsutomu Yuguchi, a research director at the Hamagin Research Institute in Yokohama, said regional economies were already suffering from weaker demand following last October's consumption tax rise and damage caused by last year's typhoons, before the virus-related hit.

"If it takes six months or a year to contain the virus, tourism-related businesses face the very real threat of chain reaction bankruptcy. The most worrying thing is if an increasing number of Japanese refrain from going out or traveling due to fear of infection. In such a case, the damage will be even bigger," he said.

Comments:

All over Japan there seems to be a chain reaction of less economic activity due to the virus situation, both among Chinese tourist visitors and Japanese domestic tourist visitors. The sales tax situation, like in 2014 is most likely just a temporary setback, and as before Japanese consumers will get used to the increased sales tax and get back normal activities as before. However, the virus situation is something completely different. Japanese tourists, for the time being, be reluctant to go anywhere outside of the local areas until they see some real change in the virus situation.

© 2020, Tom Metts, all rights reserved