for Visit California August 2012
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1 Japan Monthly Activity Report for Visit California August 2012 Prepared by AVIAREPS Marketing Garden Ltd. 1. ECONOMY AND TRAVEL INDUSTRY UPDATES A. Japan Economic Update The Japanese Cabinet Office s August economic report assessed that the recovery continues at a moderate pace, spurred on by reconstruction demand. On the other hand, the Cabinet also noted risks from overseas economies and sharp fluctuations in the financial and capital markets. Corporate profits, business investment, corporate sentiment and private consumption are seeing varying levels of growth, though industrial production is leveling off and exports are weakening. The government and Bank of Japan are hinting at monetary easing to bring yen exchange rates back under control. Japan s GDP increased by 1.4% on a real, annualized basis in the April to June quarter as exports were affected by high exchange rates. Shortly afterward, the government predicted growth in FY2013 would reach 1.7% in real terms and 1.9% in nominal terms. This would be the first time since 1997 that nominal growth exceeded inflation adjusted real growth, which signals a possible end to deflation. Both houses of the Japanese Diet have passed a bill to increase the national consumption tax from the current 5% to 8% in April 2014 and finally settle at 10% in October Still, the bill states the tax increase will only go into effect in the event of an economic upturn without defining upturn, which will likely lead to varying interpretations leading up to the first increase. B. Japanese Yen Exchange Rate The Japanese yen to U.S. dollar exchange rate remained stable throughout August, ending trading at yen to the U.S. dollar. Meanwhile, the yen climbed to near record highs against the euro, but settled at yen at the end of the month, making the yen slightly weaker than it was at the beginning of August. The following are the average exchange rates for the past six months. 1
2 Source: x-rates.com C. Japan Overseas Travel Trends Progression in the number of outbound Japanese travelers: Monthly Totals % Change January 1,282,348 1,331, % February 1,391,193 1,572, % March 1,420,584 1,737, % April 1,114,906 1,410, % May 1,152,339 1,431, % June 1,267,227 1,475,000* % July 1,465,379 1,595,000* % Year to date 9,093,976 10,552,931* % Source: Japan National Tourism Organization *estimate 2
3 The number of Japanese outbound pax in July reached a preliminary total of 1.6 million, for an increase of 8.85% over The Japan Travel Bureau Foundation (JTBF) presented a number of its findings at a symposium. For instance, the group contributing the most to outbound travel growth is women in their 20s: 26.6% of them headed overseas in 2011 thanks to favorable exchange rates, especially yen to Korean won. JTBF also reiterated its outlook that the Japanese mindset on international travel has changed since the events of March 11 th travel used to be considered a good but now it is an experience/investment in oneself. Lastly, JTBF evaluated that air seat capacity is increasing at a faster rate than the number of outbound pax, so as long as airlines do not cancel flights, there is significant potential for further travel growth. Travel review online community TripAdvisor.jp, which asks users to rate destinations, hotels etc. on a scale of one to five, has tabulated the list of Japanese travelers favorite destinations in 2012, led by Angkor Wat in Cambodia. A list of the top 20 destinations is as follows. 1. Angkor Wat, Cambodia 2. Machu Picchu, Peru 3. Lanikai Beach, Hawaii, USA 4. Walt Disney World, Florida, USA 5. Uluru, Northern Territory, Australia 6. Musee d'orsay, France 7. Church of the Sacred Family, Spain 8. The Louvre, France 9. Hagia Sophia Museum/Church, Turkey 10. Pergamon Museum, Germany 11. Piazzale Michelangelo, Italy 12. Bellagio Fountains, Nevada, USA 13. Hungarian State Opera House, Hungary 14. Vatican Museum, Vatican City 15. Niagara Falls (Canadian Side) 16. National Gallery, England, UK 17. Monument Valley Navajo Tribal Park, Utah, USA 18. Mont-Saint-Michel, France 19. Kunsthistorisches Museum, Austria 20. Jungfraujoch (mountains), Switzerland Advertising agency ADK conducted a survey and found that Japanese women in their 30s are the most responsive to new travel products and services: 65% of them said they share travel experiences with family and friends, especially their parents. 40% of women in their 30s post online about their travel experiences, the highest percentage of any group. When ADK asked these women in their 30s where they gather travel information, the most popular choice was travel portal site Rakuten Travel (78%), followed by Yahoo! Travel (53%), Jalan.net (45%), AB-Road.net (28%) and 4travel.jp (17%). Japan and China expanded their open skies agreement, removing limits on flights except those involving Beijing, Shanghai, Narita or Haneda airports. Beijing, Shanghai and Narita had their capacity limits increased. As for Haneda, starting at the end of March 2013, carriers will be able to use daytime slots to fly to Shanghai and Guangzhou, with more slots becoming available once Haneda s international capacity is expanded from 30,000 to 60,000 slots per year (March 31 st, 2014 at the soonest). 3
4 Japan also reached an open skies agreement with the Netherlands, completely deregulating flights between the countries except for those to and from Narita and Haneda airports. Both countries agreed to add Narita to the agreement once the number of takeoff and landing slots increases to 270,000 per year starting in March 31 st, The agreement also allows both countries to freely code share on flights to and from Haneda Airport. D. Agency and Transportation Trends For the second time since June, both Japanese carriers decided to lower their respective fuel surcharges by another notch, roughly 10% lower than current levels. The changes will take effect on flights ticketed on or after October 1 st. The table below shows fuel surcharges per person per sector. Japan Airlines From Japan to: Until September 31 st From October 1 st Europe, Middle East, North America, Oceania 23,500 yen ($300) 21,000 yen ($268) Hawaii, India, Indonesia 15,000 yen ($191) 13,500 yen ($172) Malaysia, Singapore, Thailand 11,500 yen ($147) 10,500 yen ($134) Guam, Palau, Philippines, Vietnam 7,000 yen ($89) 6,500 yen ($83) China, Hong Kong, Taiwan 6,000 yen ($77) 5,500 yen ($70) South Korea 2,200 yen ($28) 2,000 yen ($26) All Nippon Airways From Japan to: Until September 31 st From October 1 st Europe, Middle East, North America 23,500 yen ($300) 21,000 yen ($268) Hawaii, India, Indonesia 15,000 yen ($191) 13,500 yen ($172) Malaysia, Singapore, Thailand 11,500 yen ($147) 10,500 yen ($134) Philippines, Saipan, Vietnam 7,000 yen ($89) 6,500 yen ($83) China, Hong Kong, Taiwan 6,000 yen ($77) 5,500 yen ($70) South Korea 2,200 yen ($28) 2,000 yen ($26) Although Japan is facing some territorial issues with China/Taiwan and South Korea, the Japanese travel industry and airlines flying between the countries have overwhelmingly said the effects are minimal and temporary. 4
5 2. ACTIVITY UPDATE A. Travel Trade Marketing A-1. Major Sales Calls and Activities Visit California Japan conducted sales calls to the following key members of the Japanese travel trade in August to negotiate California tourism promotional opportunities. AVIS Rent-A-Car: Mr. Naruse, Manager VC Japan provided AVIS Rent-A-Car with the VCA logo to place on the special promotion web page; promoting Fly & Drive travel in conjunction with celebrating the one-year anniversary of Singapore Airlines new service using A380 aircraft between Narita International Airport and Los Angeles International Airport. VC Japan supported AVIS Rent-A-Car on this project and confirmed placement of the VCA logo with linkage to the top page of the VCA Japan website. ( DeNA: Mr. Atsushi Masuda, Corporate Planning Head Office VC Japan met with DeNA, a global Internet company focused on social gaming platforms, e-commerce and other web services for mobile devices and computers. DeNA s current flagship business is its mobile social gaming platform, Mobage, which offers first-and third-party games on four localized user networks across Japan, China, South Korea and the West. They also operate an online travel agency, Air Link, focusing on FIT, air & hotel tours in addition to package tours. Mr. Masuda stated that they would like to increase sales to California, and VC Japan suggested conducting co-op promotions using their social media platform, not limited to working only with Air Link. Mr. Masuda agreed to discuss within the company how to generate a synergistic effect to promote California tour products. DNA Website: Air Link Website: Nippon Travel Agency: Mr. Atsushi Bunazawa, Cruise Center Chief VC Japan met with Nippon Travel Agency System Travel Center, a travel agency that focuses on the luxury travel market, especially cruise ship tours. Mr. Bunazawa stated that Nippon Travel Agency is planning to produce a new Fly & Cruise tour product using Tokyo Los Angeles flight. VC Japan agreed to provide image photos, which will be used for their tour brochures both print and online. 5
6 Nitsu Ryoko: Mr. Mitsuhiro Matsuda, Assistant Manager, Group Sales Department VC Japan provided Nittsu Ryoko with necessary collaterals and information for his planned tour product, departing early next year from Narita to San Diego. The company is a subsidiary company of Nippon Express, the biggest general transport/logistic corporation in Japan and is a full line service travel agency, with special expertise in corporate travel and leisure destinations. Mr. Matsuda believes that San Diego will be an attractive destination and will consider using the new Japan Airlines San Diego flight from December this year. VC Japan will continue to follow up and assist Mr. Matsuda as necessary. Wing Travel: Ms. Nagae, Deputy Manager VC Japan negotiated with Ms. Nagae from Wing Travel, a leading travel trade publication in Japan, and agreed to secure a free one page exposure in the publication, which will be distributed at JATA Travel Showcase The page will feature a driving course and recommended attraction spots along the Pacific Coast Highway starting from San Francisco to Los Angeles, along with the introduction of California Welcome Centers. A brief overview of the exposure is as follows: Weekly Wing Travel: 8,900 copies on weekly basis Issue Date: September 17 th, 2012 Advertorial space: 1-page with black and white color White Incorporated, Mr. Jinda, Sales Department VC Japan assisted White Incorporated on creating a special campaign web page ( to celebrate All Nippon Airways new flight from Narita International Airport to San Jose, starting on January 11 th, 2013 five-times a week. The company is a designated production company of All Nippon Airways and also created special web pages of San Francisco and Los Angeles, where their flights are available, separately working with San Francisco Travel Association and Los Angeles Tourism & Convention Board. VC Japan will prepare promotional gifts for this campaign and provide to All Nippon Airways. A-2. Education California Online Expert Program As of July, VC Japan has seen a total of 125 registered travel trade applicants and will continue promoting the program whenever the opportunity arises.. 6
7 B. Public Relations B-1. Media Monitoring (clippings and publicity calendar) During the month of August, Visit California Japan secured PR coverage in a total of 79 publications/websites/programs, with an estimated total circulation of 16,824,206 and an estimated advertising value of US$1,231,644. B-2. VCA Japan Website Below are some of the major access statistics from August For more details, please refer to the Google Analytics report below. Number of page views: 120,346 Number of sessions: 41,858 Number of users: 34,781 The most-used keyword remains サンディエゴ ( San Diego in Japanese) followed by サンディエゴ観光 (San Diego sightseeing), カリフォルニア (California), and サンフランシスコ (San Francisco) Monthly page views for the last six months: Month Page Views March 102,578 April 90,560 May 98,439 June 99,823 July 100,899 August 120,346 Total: 612,645 B-3. Japan E-Newsletter PC E-Newsletter: Visit California Japan produced the August E-newsletter with the following contents especially prepared for Japanese readers: JATA Travel Showcase 2012 San Francisco International Airport voted best airport in the America California Expert Program Street-food style in Silver Lake Wild combos in Venice An alfresco twist on the Westside A World of Taste at the San Francisco Ferry Building Farmers' Market Segway tours debut in Solvang this summer 7
8 icoastside App Now Available The full contents are available at: VC Japan translated, edited and distributed the e-newsletter to 15,931 travel agent, media and consumer subscribers on August 28 th. Mobile Phone Newsletter: VC Japan also produced the August mobile phone newsletter, with the topic: JATA Travel Showcase 2012 VC Japan distributed the mobile phone newsletter to 1,101 registered users on August 28 th. B-4. Press Trips and Related Coverage 25ans Wedding (Circulation; 70,000) VC Japan successfully obtained an opportunity to feature Santa Barbara and Palm Springs in an 8 page color exposure in their autumn issue. VC Japan proofread the draft article and returned with corrections as necessary. Upon receiving the actual coverage, VC Japan will share its coverage with supporting CVB partners. BS-Fuji TV Program San Diego Kanpeki Map VC Japan identified an exposure opportunity for Southern California on the BS-Fuji satellite network program, Kanpeki Map (Ultimate Map). The 50-minute program is planned to cover San Diego, La Jolla, Temecula, and Palm Springs. Japan Airlines is sponsoring the program to promote the Narita San Diego direct flight. The program will be edited to a 20- minute version to be broadcasted as a JAL in-flight movie from November The 50-minute program itself is planned to be on-air on the TV programme from early December, the timing of the launch of the new flight. The shooting, which took place at the end of August, was successfully finalized with firm support from each CVB partner. VC Japan staff attended to support the translation and met with CVB partners to exchange updates. VC Japan to continue to communicate closely with the TV Director and will follow up with the narration upon receiving the draft. SKYWARD (Circulation: 4,000,000) VC Japan succeeded in securing an opportunity of featuring San Diego, Laguna Beach, and Temecula in Skyward, Japan Airlines in-flight magazine in order to promote the Narita- San Diego direct flight. 8
9 The exposure is approx color pages and the article is planned to appear in their November issue, and VC Japan supported $1,000 fee out of the communication budget to be used for the coordinator fee. Upon receiving the draft article, VC Japan will proofread it and return with necessary corrections. C. Inquiry Handling Main inquiries from the travel trade, media and consumers: Collateral requests for California images, posters, and TRANSIT. Information about San Diego sightseeing, Fly & Drive in California, Napa Valley Wine Train tour, theme parks in California, etc. Brochure requests from the travel trade and media: LOHAS & Healing Fair: 100 TRANSIT and 10 California posters. D. Japan Online Promotions Co-op Promotion AXN tie-up promotion was launched on June 11 th. The 1st episode- San Francisco entertainment story was uploaded on the special tie-up page on June 11 th. ( The 2nd episode- LA entertainment story was uploaded on the same page on June 25 th. The 3 rd episode Orange County entertainment story was uploaded on the same page on July 9 th : The 4 th episode - Contents about San Diego entertainment were uploaded on July 23 rd : Here are the results of the promotion until August 5 th. 9
10 Comparing the same timing of the previous year for 8 weeks, the number of unique users was +11.7% and the number of page views was +4.3%. The increase in unique users (11.7%) during this campaign can be attributed visitors who were not initially interested in California, but interested in entertainment. They first visited the AXN website to get entertainment information. They saw the VC campaign banner then visited the VC site from there. As for the page views, the first episode about San Francisco, Why do screenwriters live in the Bay Area? and also the second episode about LA, "Film experiences you can have in L.A had the higher number of page views than the other two episodes. On the tie-up page, we included Twitter and Facebook links, but we received more Facebook users than Twitter followers. As a result, we achieved the target numbers of the number of Likes on Facebook (780) but unfortunately, did not achieve the target of Twitter followers (2,100). # # # 10
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