New Deal Europe Weekly Update on Tourism to the Balkan Region, Week 51
News from the markets: Kuoni Tumlare, Japan, Korea and The Phillippines
Following our very popular interview last week with Adam Lotinga of Miki Travel, we thought we’d go directly to Japan for a view from there. We talk with Tokyo based Victor Lopes, President of the market leaders for outbound travel, Kuoni Tumlare, and get his views, not only on Japan, but on the other markets he overlooks — Korea and The Philippines. He paints a picture of a market in transition, and he makes it clear that the Balkans is the region of Europe with the biggest potential for growth. Read on for his insight…
NDE: Hi Victor. Great to be in contact with you again and thanks for being our guest on our blog this week. I never did find out how your career took you from Portugal to Japan, so maybe this is a good time to put me in the picture.
VL: Well… Actually I lived between France and Portugal in my childhood. I came across the tourism sector while I was still a student — I studied Law and Japanese. I would meet an arriving group from Japan at 6:00 AM at Charles de Gaulle Airport or meet a tour leader in the late evening to check the schedule for the next day, and it started from there. After graduation, I formally joined Wagonlits in Paris where I was responsible for operations and hotel bookings. They were my formative years. I had wonderful teachers — no need to mention but maybe you know some of them: Max Obrist, Angela Callaghan… In 1995 I was transferred to the sales front in Tokyo, where I have remained, so I’ve been based here since then.
NDE: And now you are the President of Kuoni Tumlare. Some people might know the names Kuoni or Tumlare, but not the new mash up. Can you briefly explain the concept of Kuoni Tumlare and the relationship with Japan’s longest established operator, JTB?
VL: Tumlare has been part of the JTB group since 2008 and Kuoni joined in 2017. Tumlare was specialised in Scandinavia, Russia, the CIS, the Balkans and East Europe, while Kuoni had a wider coverage in Europe but also covering other destinations such as Oceania, America and South Asia. The Kuoni and Tumlare brands were merged globally at the end of 2020 and became one company in January 2021 in Japan, though the Head office of our new company is in Zurich. I am currently President of Kuoni Tumlare Japan Inc. and Mr Shoji, the ex president of Tumlare, is Chairman of Kuoni Tumlare Japan Inc. Besides my Japan role, I am also Sales VP for East Asia which also includes Korea and the Philippines, two very different markets.
Please pass on my best regards to Mr Shoji, who I met with many times on my visits to Japan. With all these mergers I think you are undoubtedly the market leaders for outbound travel in Japan so you must have a great overview of the situation. When do you think outbound travel will resume from Japan, and what will that resumption look like — which destinations will benefit first?
VL: Recovery scenarios have been revised several times already since last year. As a matter of fact, no one can say yet precisely when international travel will reopen. It will depend on how fast the pandemic will be curbed in Japan but also abroad, especially where the Japanese usually travel. Only then perhaps will the Japanese authorities open borders and airlines will reintroduce flights. As of now I think it is very unlikely to happen within this year. I would say a staggered opening could be possible by Spring 2022. We can foresee some travel opening up earlier to specific destinations in the Asia Pacific area for business as well as for leisure, such as Hawaii and Guam. Long haul including Europe may come after.
NDE: Is your prediction for recovery the same for the Korean and Filipino markets as it is for Japan?
VL: Korea was expecting an earlier recovery in September with charter flights scheduled for several long haul destinations, including Europe, but the emergence of the Delta Variant has put a stop to these charters and the market is looking now at early 2022. In the Philippines vaccination rates remain low (12% currently) and no recovery is expected in the coming months. However the appetite for travel is extremely high and so hopes are high too for 2022, especially in April which is traditionally the high season for travel.
Most of the travellers from Japan going to Europe are senior travellers looking for cultural and local experiences, and for cuisine. Authenticity is very important.
NDE: Can you give us an overview of the Korean and Philippines markets which you are also responsible for? In what ways are they different from Japan and what do they look for from a European holiday?
VL: Three different markets, three different realities. Japan is a mature market where demand is high for mono destinations and cultural experiences. Korea is also leaning in this direction but still with different demographics, with less focus on mono destinations and higher presence of individual travellers. Despite Korea’s population being half the size of Japan, the number of travellers overseas is larger than Japan. Passport issuance ratio is more than double that of Japan. The Philippines market is very different: leisure groups focused on multi destinations with religious and Catholic pilgrimage themes, but also a large Incentive travel segment.
NDE: We know that the Tokyo Olympics of 1964 is credited with opening up Japan to the World, and encouraging tourism. The 2020 Olympics though were played out to empty arenas and stadia. How is the Covid situation there now?
VL: Yes actually Kuoni opened its office in Tokyo in 1963, one year ahead of the 1964 Olympics. The idea at that time was to set up an inbound office for the Olympics. Inbound was still the main activity until the early 70’s when the focus shifted to outbound. 57 years after those Olympics the situation is very different: our company is not directly dealing with the Olympic event, although JTB has been appointed Official Travel Services Partner of the Olympic and Paralympic Games Tokyo 2020. With growing numbers of infections, empty stadiums and the restrictions in place due the State of Emergency, the mood was maybe not as festive as in previous Olympic events. Still I believed the Japanese showed a great sense of hospitality to the participating teams despite the adversity of the Pandemic. The event was run very well, which shows how strong resilience and commitment is in Japan.
NDE: and how is Covid affecting your business?
VL: The overseas travel outbound from Japan has been stopped since March 2020. Since then, we have only operated very specific groups travelling to Europe for professional reasons. We have kept some of our units in semi hibernation while developing virtual content to our clients in cooperation with our local offices and local partners in Europe and elsewhere in the World. So we have been producing online tours, online technical visits, and virtual and hybrid conferences. This has been a way to explore and develop new business segments while keeping close to our clients and local partners.
Recovery scenarios have been revised several times already since last year. As a matter of fact, no one can say yet precisely when international travel will reopen. It will depend on how fast the pandemic will be curbed in Japan but also abroad.
NDE: Are you, as a market leader, able to influence the decision making of the tour operators and if so what will you be promoting in the coming 12 to 18 months — will there be anything new or different due to Covid?
VL: Kuoni Tumlare has been focusing on long haul destinations from Japan. We usually offer, besides Europe, destinations in Oceania, predominantly New Zealand, and Australia, in the Americas too and also in Asia especially India and Nepal. Our efforts for recovery from Covid are centred initially on the Asia Pacific region where we foresee earlier openings, but we are also actively preparing products to Europe, centred on mono destinations served by direct flights. We may give priority to nature over large cities as it is expected that after two years of pandemic the desire to travel in wider spaces will be high.
NDE: What are travellers from Japan typically looking for from a European holiday? Is it different to their expectations from other parts of the world?
VL: Most of the travellers from Japan going to Europe are senior travellers looking for cultural and local experiences, and for cuisine. Authenticity is very important. Europe does not compare in Japan with other popular destinations like Hawaii or Asian resorts which appeal to younger travellers and families with kids for whom entertainment and leisure is key.
NDE: So the typical Japanese traveller coming to Europe is still from the older generation?
VL: Yes, they average over 60, retired, travelling in couples. They know where to go and have done research before their departure. Traditionally coming in package groups, the “new” seniors may travel in smaller groups or in FIT depending on the accessibility of the destination. The “new” seniors are also more tech savvy than their predecessors. It’s expected that the post Covid demand will accelerate this tendency.
We have been producing online tours, online technical visits, and virtual and hybrid conferences. This has been a way to explore and develop new business segments while keeping close to our clients and local partners.
NDE: You don’t mention FITs or Individual travellers so much Victor. Is KuoniTumlare only handling groups?
VL: Historically groups has been our core business, but we have been focusing precisely on small groups of 1 to 9 people in Japan for a few years now. We specialise on customised arrangements for individuals. This strategy is embedded into our post Covid recovery effort and we are launching Private Tours in our other markets as well.
NDE: You said that wide open spaces are part of your recovery goals, and the Balkans has plenty of that. If you mention ‘The Balkans’ in Japan, what reaction do you get? Is there a particular perception of the region?
VL: There have not been many products sold as ‘Balkan Tours’. Usually the Japanese travellers will identify country by country: Slovenia, Croatia. Dubrovnik especially, or sites such Plitvice Lakes have been very popular in Japan over the last 10 to 15 years and they are a regular feature in Japanese media. We noticed, before the emergence of the Covid crisis, countries such as Serbia and Montenegro, specifically Kotor, as new destinations attracting attention in Japan. The same can be said of Bulgaria and Romania.
NDE: How do you think the tourism providers in our region (The Balkans) can get more business from Japan? Are there any tips for working with the Japanese?
VL: I think the Balkans and the all South East Europe has a big potential to grow in Japan. We have seen the success of Croatia in the past but I am convinced the region has a huge potential still untapped in terms of cultural UNESCO heritage sites, architecture, cuisine, and nature to offer. No other region in Europe has such large potential to grow in the Japanese market.
The existence of borders, the relatively limited transport infrastructure, these should not be seen as obstacles. On the contrary it gives an opportunity to local professional companies to organise, package and offer their products. More than anywhere else in Europe the role of travel professional experts here is essential to develop awareness of the destination in Japan. In our case, we have our local team in Zagreb who can make the difference thanks to the proximity with local partners all over the region.
NDE: That’s interesting Victor as this potential in the Balkans and the need to organise were the reasons we set up New Deal Europe. We are also heavily focused on promoting the sustainable and responsible tourism element of the Balkan region. How important are these aspects to Japanese travellers?
VL: Currently sustainability and responsibility awareness is getting higher in Japan. The SDG (Sustainable Development Goals) are omnipresent in the Japanese media and it is natural that travellers, once they will be allowed to travel abroad, will look for sustainable tourism. The respect of nature, local culture, the use of local products, the avoidance of over tourism will be certainly welcomed by Japanese tourists.
NDE: Well that leads nicely on to my final question to you Victor. How do you see the post pandemic future of travel out of Japan, and what makes you think this?
VL: It is still early to fully evaluate the impact of the pandemic as we are still in the middle of it but it will certainly accelerate patterns that were already foreseen before Covid. Japan is a relatively mature market and the travellers will travel more and more in smaller groups, or individually, looking for local authentic experiences. Mono country destinations, or even regional destinations will grow. They will pay more attention on sustainability and environmental issues.
NDE: That all sounds very promising for our region. Victor it’s been great talking to you. Thanks for being our guest this week and giving us this insight into Japan and your other markets.
New Deal Europe is the only travel market platform dedicated to generating business to the Balkan region of Europe, www.newdealeurope.com. Follow us on LinkedIn: https://www.linkedin.com/company/newdealeurope.
