Subsidy scheme creates headaches in tourism industry

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Japan’s latest subsidy program to help the tourism industry ran into some well-known problems.

Customers and service operators have complained about the “cumbersome procedures” required to qualify for discounts on domestic tour packages.

Some companies said the government subsidy scheme, which started in October, created too much business for their exhausted workforces.

Despite the extra revenue from the scheme, many people in the tourism industry have complained that it “has increased the burden on us”.

A major Japanese booking site, called “Jalan net”, reported that as of Nov. 11, packages subsidized under the program were no longer available in 32 prefectures because they had reached the budget cap.

On October 11, the day the subsidized packages went on sale, there was so much traffic on travel-related websites that people found it hard to pass.

According to a survey by Teikoku Databank Ltd., 45% of the country’s 800 hotels and ryokan in October saw year-on-year revenue growth.

In a survey conducted in April 2021, the ratio was just 5%.

Seven percent of companies in the latest survey reported year-over-year losses, up from 76 percent in the 2021 survey.

Rio Yamano, 29, a duty manager at a hotel in Kanazawa, the capital of Ishikawa Prefecture, said the hotel’s occupancy rate increased not only on weekends but also on weekdays thanks to the grant program.

“But I think hotel employees and guests were confused by the system,” she said.

To qualify for a discounted rate under the program, a guest must provide a full vaccination certificate or a negative COVID-19 test result upon check-in.

However, some guests were unaware of the requirement, so hotel staff told them about a nearby PCR testing facility, she said.

“It now takes us twice as long as usual to check in a guest,” she said. “I always want our guests to have fun, but sometimes they are disappointed with such procedures.”

Businesses decide whether or not to participate in the government subsidy program.

Many operators obviously want the program to help them recover from the financial damage caused by the pandemic.

But the hotel where Yamano works faces a chronic labor shortage.

“We don’t have enough manpower, so sometimes we decide not to accept a booking even though we have a vacancy,” she said.

Makuri Nakayama, 28, runs You.Japan Inc., a Tokyo-based company that develops apps for tourists and accommodation establishments.

Through social media, the company released “five pleas” to users of the subsidy program, including “please understand the reality of labor shortages in the tourism industry” and “please check the different systems used in each municipality”.

Nakayama said the company created the means to help save the industry.

“Staff have been leaving the tourism industry since the start of the pandemic,” he said. “If we let it accelerate, the whole tourism industry could collapse.”

Nakayama said the central government should provide a better explanation of how the subsidy program works.

“I don’t think any of the people who created the grant system ever worked in a hotel,” Nakayama said.

A senior manager of a company that runs several hotels in Osaka said the program offered only a short-term solution.

“People who come to stay at our hotels through the subsidy program will never return (without the discounts),” the manager said. “Long term, I doubt the grant program is really helping to boost travel.”

The subsidy program will run until the end of December, but a recent spike in COVID-19 cases has raised fears the eighth wave of infections is about to hit Japan.

“The biggest effect of the subsidy program has been to send people the message that it is safe to travel,” said Kazuo Takahashi, professor of tourism marketing at Kindai University. “But the grant scheme is unlikely to really help accommodation facilities get stronger.”

He said accommodation operators should assess their target customers and the industry as a whole should reflect on their management policies, such as giving pay rises.

(This article was written by Amane Sugawara and Shinji Hakotani.)

The Asahi Shimbun


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