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IIST e-Magazine (For the Japanese version of this article)

Japanese Style DMOs Drive Local Tourism (2) A Time of Change for Tourism-based Community Development Koichiro Tsuruta CEO, Hotel New Tsuruta Representative Director, Japan Onpaku [Date of Issue: 31/January/2019 No.0286-0287-1096]

Date of Issue: 31/January/2019

Japanese Style DMOs Drive Local Tourism (2)
A Time of Change for Tourism-based Community Development

Koichiro Tsuruta
CEO, Hotel New Tsuruta
Representative Director, Japan Onpaku


Because tourism is the epitome of a regional industry, communities cannot be revitalized through the efforts of tourism operators alone. After the bubble economy collapsed, even the Beppu spa resort, a typical large-scale tourist region, suffered, but it was local residents and diehard Beppu fans who launched Beppu's ongoing community development drive. These loosely-connected development communities and DMOs equipped to respond rapidly to an era of change are the two key agents in community development.


As foreign tourist numbers surge, Japan's tourism industry stands on the cusp of major change. While far removed from other industries, tourism too is now in the midst of globalism.

Looking back, the number of foreign tourists began to climb rapidly in 2013 as the negative impact of the 2011 Great East Japan Earthquake began to abate. This market surge was due to a combination of factors, including the weakening of the yen, the relaxation of visa restrictions, and the launch of a string of low-cost carriers (LCCs). It was of course also a time when rising incomes in Asia were encouraging an explosion in Asian tourist numbers worldwide, but no one had predicted quite such rapid growth.

Boom in Foreign Tourist Numbers The goal of making tourism a key Japanese industry was originally set in 2003 by the Koizumi administration, which initiated a tourism promotion policy called the Visit Japan Campaign, but despite the administration's efforts, the slump in local tourism which had followed the collapse of Japan's bubble economy showed no sign of lifting. There was one noteworthy development, however: the launch of self-driven development initiatives by Yufuin and other small villages, work which later became known as community development.

Around that time, Oita Prefecture's One Village, One Product movement was often touted as a slogan for regional development. The rise of Yufuin's tourism industry is regarded as exemplifying that movement, which is well-known throughout Asia even today. Community development as a form of regional revitalization that engages local residents and the community has since become an important regional revitalization characteristic.

Community development begins to bud after a 20-year slump

After the bubble economy collapsed, even the Beppu spa resort, a typical large-scale tourist region, suffered, but as of the mid-90s, concern for the region brought together local residents and diehard Beppu fans in an effort to make Beppu shine again, marking the start of Beppu's community development drive. This was indeed the germination era for “community development communities.”

In 1999, local walking tours were launched as a means of helping visitors learn more about the community and guides also appeared, while 2001 saw the birth of the Beppu Hatto Onsen Hakurankai, otherwise known as the “Onpaku Expo.” This event focuses on unsung local communal baths and tiny lanes, as well as the food that locals eat every day, packaging them as interactive experience programs.

Yukemuri Observatory in Kannawa, Beppu offers a spectacular view of countless pillars of steam rising up from every corner of the town. The sort of sight that only the Beppu spa can offer, it was added in 2012 to the list of Japan's Important Cultural Landscapes.

Yukemuri Observatory in Kannawa, Beppu offers a spectacular view of countless pillars of steam rising up from every corner of the town. The sort of sight that only the Beppu spa can offer, it was added in 2012 to the list of Japan's Important Cultural Landscapes.

In the course of our work, Beppu began to produce a range of community development personnel who delved into various local resources, helping Beppu to break out of its tourism slump.

One concept which emerged in Beppu in 2001 and which is still a major challenge for hot spring areas around Japan is linking spas and health- and medical care. Because hot spring areas originally flourished as therapeutic spas in the pre-war period, the plan is to return to fostering that health orientation as a spa drawcard.

Back in 2001, we started by visiting spa resorts in Germany and Italy, where we recognized a clear gap between the European and Japanese offerings. European spa resorts are places for healing, where patients undergo spa therapy over long-term stays as prescribed by a doctor; some also even offer entertainment events and casinos. There is always clear regional branding.

Because of hurdles such as the healthcare system, Japanese spa resorts can't hope to offer the same packages, so attention has turned to ways of linking health and hot springs. Numerous spa areas have worked away quietly on this challenge for the last 20 years, but unfortunately, they have not produced results.

While many efforts are being made to develop new spa resort concepts geared to the changing visitor demographic, none have been realized sufficiently for the market to respond. When thinking about community revitalization, if we stop for a moment, particularly during low periods, and look back on the community's history, the efforts of our predecessors offer numerous hints that can be exploited today. Unfortunately, however, almost no materials remain that depict residents' view of history.

We are gradually coming to understand that the fastest way is to use our imaginations to uncover the past and make use of it in the present, a route now being taken by numerous areas around Japan that are seeking to restore tourism.

Myoban's hot mud pools. The bamboo pole in the middle divides the pool into the women's area on the left and the men's area on the right. These mud pools sit at around 40 degrees, but hold the heat five times as long as ordinary hot water, so people tend to climb out after 10-15 minutes at the most.

Myoban's hot mud pools. The bamboo pole in the middle divides the pool into the women's area on the left and the men's area on the right. These mud pools sit at around 40 degrees, but hold the heat five times as long as ordinary hot water, so people tend to climb out after 10-15 minutes at the most.

Dealing with the foreign tourist boom and major change

The recent boom in foreign tourists visiting Japan has given rise to new challenges. Firstly, there is the need for multilingual personnel and multilingual signage, as well as differences in diet and in bathing cultures (such as the rights and wrongs of tattoos, for example). These all need to be resolved rapidly in tourist areas.

New challenges are also emerging, such as a sudden boom in hotel construction that is breaking down the supply and demand balance in tourist areas, and work style reforms to address the severe labor shortage in rural Japan and improve workplace environments. While these must be addressed as soon as possible, their structural nature inevitably means that they will take time to resolve. Another task will be to boost the productivity of the service industry, an area which the government is currently pursuing. For tourism to become a key industry, it will need to contribute far more to GDP.

Logistics too have undergone a major transformation. Travel logistics have entered an era of international competition, and with the advance of ICT in particular leading to a swift rise in the share of global online travel agents (OTA) in Japan which has been very problematic for domestic travel agent given their traditional dependence on the domestic market. Moreover, as ICT makes way for AI, given the volume of information and AI's system construction capacity, we can expect to see not only new alliances and rivalries developing amongst domestic and foreign travel agents, but also, if we're not careful, foreign travel agents eroding domestic market share.

The Uchinari Rice Terraces comprise more than 1,000 paddies, and have been designated among Japan's top 100 rice terraces. The beauty of this landscape changes with the seasons.

The Uchinari Rice Terraces comprise more than 1,000 paddies, and have been designated among Japan's top 100 rice terraces. The beauty of this landscape changes with the seasons.

Addressing change and community development with regional DMOs

The establishment of Destination Management or Marketing Organizations (DMOs) around Japan is a key element of the regional revitalization program launched by the government in 2014 as a means of dealing with all these changes. DMOs are typically organizations that manage tourism areas. Unlike Japan's old tourism approach, which relied on intuition, experience and mettle, DMOs are organizations which serve as control towers for scientifically analyzing regions and determining tourism measures and action plans accordingly.

More specifically, they use the same techniques as in corporate management, establishing key performance indicators (KPIs), operating PDCA cycles, and distinguishing between outputs and outcomes. Because this essentially means changing traditional mechanisms, all the necessary changes are not going to be made at once, but it hardly needs to be said that our regions need organizations that can respond rapidly to this time of change.

During the tourism downturn which lasted right through to 2013, most tourist regions were unable to break out of the slump despite their best efforts. It is highly doubtful that they operated PDCA cycles during that time, or examined the results of their plans. They probably studied the examples of the handful of successful regions, but did not have the skills to exploit these lessons at home. Given that experience, there is clearly a pressing need for organizations that take a new perspective.

At the same time, successful cases of community development always present community development communities, comprising loose, cross-functional communities that include men and women of all ages. Because tourism is the epitome of a regional industry, communities cannot be revitalized through the efforts of tourism operators alone. I am convinced that regions blessed with these development communities and DMOs will be the ones that stand out in the coming years for their next-generation tourism programs and for their strong prospects for ongoing development.


Tsuruta Koichiro
About the Author
Koichiro Tsuruta
CEO, Hotel New Tsuruta
Representative Director, Japan Onpaku

Born in Beppu, Oita Prefecture in 1952. Graduated from the Faculty of Economics at Seikei University. Returned to his hometown in 1981 and became involved in regional development in the major spa resort of Beppu as a sideline to hotel management. Began developing experience-based tourism programs using local resources in 2001, setting up the Hatto Onpaku event (a local spa “expo”) as a means of revitalizing the area. Onpaku's regional revitalization methods are now used in around 80 areas around Japan from Hakodate to Okinawa. Mr. Tsuruta became representative director of the NPO Hatto Onpaku in 2004 and set up Japan Onpaku with colleagues in 2010 to spread the Onpaku methods still further.


(For the Japanese version of this article)


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