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Travel group H.I.S. seeks greater online presence, CEO says

Sawada eyes links with foreign businesses as tourist needs change

Hideo Sawada, a 65-year-old Osaka native, founded in 1980 the company that is now travel conglomerate H.I.S. He then became its chairman in 2004, and took on double duty as its CEO this year.

TOKYO -- Travel conglomerate H.I.S. needs to expand its online reservation capabilities as the number of visitors to Japan likely will continue rising, the company's CEO and chairman says.

Hideo Sawada discussed tourism trends as well as the Japanese company's joint venture with an online business in China during a recent exclusive interview with The Nikkei.

Edited excerpts from the conversation follow.

Q: Predictions say we'll have a record number of visitors to Japan in 2016.

A: The count did grow steadily, but the growth rate slowed a little. The jump in 2015 was too big, and this year we've settled back to normal levels. When there's too big of an influx, it gets harder to make hotel or flight reservations and leads to lower-quality service. The most visitors through November came from China, but Indonesia had the biggest growth. More people came from the West, too. It's best if you have a healthy balance of visitors from different regions.

Q: Do you see any changes in consumer behavior among visitors?

A: Chinese tourists' shopping sprees seem to be winding down. Consumption spending overall from July to September went down on the year, too. Rather than groups, we saw more private visitors. More people strayed from Japan's major sightseeing destinations in search of more experience-based travel off the beaten path.

Q: Are Japanese travel agencies fetching many visitors?

A: No more than a small portion. They do field requests from foreign travel companies to arrange lodging and transportation here in Japan, or sell services directly on their websites. But prominent international booking sites have a major presence, as do tour operators that handle lodgings, buses, guides and such for travel agencies.

Q: Is the rise of online travel agencies a threat?

A: We live in an age where you can skip the travel agency office and book a trip on your smartphone. Travelers can reserve their own accommodations on major travel sites like Booking.com or Expedia, and get seats on planes at airline sites. We urgently need to expand our own online reservation system in kind.

We're forming a joint venture with a Chinese travel agency to acquire their Japan-bound customers, and are otherwise joining forces with online services. We're going to purchase and tie up with foreign businesses more rapidly. We'll shift our physical locations toward helping customers with problems and handling disaster response.

Q: Japan is debating placing restrictions on tour operators.

A: There are no restrictions on starting such a business, so there's been a flood of them, including malicious ones that take customers to overpriced souvenir shops and low-quality eateries and damage impressions  of Japan. Excessive restrictions are no good, but we at least need registration -- a bare minimum of regulation.

Q: The government also aims to have 60 million visitors to Japan in 2030.

A: That's a rather challenging target. We'll need more airport and lodging facilities, plus better capability to handle multiple languages. Visa exemptions and looser issue requirements are important, as are shortened wait periods. I'd also like to tackle raising the productivity of accommodation facilities. Our subsidiary [resort] Huis Ten Bosch's Henn na ("Strange") Hotel has been able to operate with a smaller staff by introducing robots.

Interviewed by Nikkei staff writer Hiroki Obayashi

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