Middle class tourists postpone their visits to Japan

Russian tour operatorsdealing with Japan report a drop in sales of 15 to 60% compared to the previous year. Most of the downturn falls on mid-range price segment. High-end and deluxe packages remain in demand as well as relatively cheap ones. An average one-week itinerary starts at US$2000 per person, excluding the airfare. Rather rarely, one can come across a cheaper package (from US$715) with no excursions included in the price.

The country is more often visited by individual tourists rather than organized groups. Groups mostly gather for peak periods: May holidays, sakura, maples. In 2013 the depth of sales was reaching up to six months for peak spring and autumn departures. As of now, it's come down to just one-two months as the Russians try to pay for their trip straight away (before the rouble starts going down again) or delay the payment hoping to get a more favorable rate.

Flights fro Russia to Japan are quite pricey. A return ticket from Moscow to Tokyo, for example, stands at a minimum of 35,000 roubles. So the Russians are trying to save staying at lower-class hotels and cutting down the number of excursions and other activities on their itinerary. Tour operators are trying to meet them halfway by offering more affordable packages which only include accommodation and a minimal number of services. Those who can't afford to hire a tour guide, plan their trips day be day making up a detailed itinerary featuring a map of hotels, restaurants, and places of interest.

For 2015, most market players are going to refrain from booking blocks of airline seats as they had suffered financial losses in 2014. There are two reasons for that: the fact that tickets available to the public are cheaper than the block ones and the requirement to pay to airlines using an increased euro exchange rate. Most tourists prefer booking flights on their own. Plus it's more convenient for travel agents to purchase tickets directly from air carriers.

In 2014, tour operators have been facing visa issues in Saint Petersburg. Consular officers have been calling applicants (with hardly any exceptions) for interviewing. Possible reason for that is the fact that the Saint Petersburg Consulate doesn't carry out interviews over the phone as it's done in Moscow. Besides, the Japanese request for additional paperwork and visas are often issued with a delay of three or four days. In Russian capital, this has been happening quite seldom. FYI: the Saint Petersburg Consulate issues around three thousand visas a year while in Moscow this figure reaches 30-40 thousand. In order to resolve the issue, Saint Petersburg tour operators suggest implementing telephone interviewing in their city as it's done in Moscow.

Fregat Aero, Vladivistok

Sergey Alekseyev. Director General

Overall downturn over the year reached some 60%. In winter, tourists from our region travel to Japan mostly for mountain skiing. Combined itineraries are also popular, e.g. skiing holiday followed by beach leisure in Indonesia, Thailand, Singapore, Saipan and Guam islands.

Flights to Tokyo on Aeroflot or Siberia airlines booked in November for the New Year period could be purchased for around 40,000 roubles. As of now, the price is about 24,000 roubles. There is also a ferry from Vladivostok to Tokyo, the fare is US$400.

Residents of the region have come to understand that Japan is not that an expensive destination if one travels around provinces where everything is much more affordable than in Tokyo or Osaka.

We hope that the situation will flatten out by this spring; we are already negotiating minimum rates with our partners

Oriental Discovery, Moscow

Natalya Dalbinova. Head of Sales Department

We offer various packages from US$1,500 to 3,000 per person. Those wishing to save some money go for group tours with accommodation at 2-3-star hotels and a single excursion - Tokyo city tour. Those who are used to 5-star hotels and a lot of holiday activities do not lower their demands. As for the middle class, they simply didn't go and postponed their "Japanese" plans. It's not impossible that we will see more stable currency exchange rates in the upcoming season and the deferred demand as a result, as it happened following the Fukushima disaster.

A part of our block of JAL seats has perished. Next year we are not going to use them again, but will be issuing tickets at public rates instead. Supposedly, the air carrier is going to offer good deals for peak seasons as well.

Mandarin, Khabarovsk

Natalya Yezerskaya. Director

Over this autumn, the recession on the destination slowed down from the year's average of 34% to 15%. At the end, our customers did went to see the maples, although in smaller numbers than usual. As for now, tourists pay for their trips two-three weeks in advance. The overall downturn is caused by increased airfares between Khabarovsk and Tokyo. This year the route has been serviced by just one airline, Siberia, and the price is quite high - from 35,000 roubles, even though the flight only takes 2.5-3 hours. For the same price one can fly from Khabarovks to Singapore, Thailand, Indian Ocean islands. For the New Year period the price for an economy-class ticket to Tokyo reached as much as 70,000 roubles.

Last year, thanks to the competition between Siberia and Aeroflot airlines, the price for the same flight started at just 9,000 roubles. People were going on weekend trips to Japan; a lot of corporate events were hold there.

Neotour, Saint Petersburg

Renat Kamalov. Director General

We had a fair number of requests for September and most part of November, but by the end of November requests almost stopped coming at all. Watching the exchange rate fluctuation, people started to exercise caution, which caused a 40-50% drop in the demand when compared to previous years. A week before the New Year holidays, we have started receiving bookings for late March, April, May as the tourists are traditionally interested in sakura blossom and May holidays.

In these latter months, the visa situation has complicated. In addition to the standard set of documents, the Consulate started to demand extra bank statements confirming applicants' financial soundness. Sometimes they even wanted to see ATM slips. We haven't seen this before. And visa application processing period has become longer as well.

Fuji Travel, Moscow

Elena Kokhanova, Business Director

The New Year sales went down by 80% year-on-year. On the other hand, departure for sakura and May holidays are selling 50% better that a year before; the depth of sales has increased, too. For two years now we have been offering our signature tour to see wisteria blossom in early May. Last season we had twice more bookings for this tour than we had expected. This year, as our clients suggested, we are doing smaller, more comfortable groups of 6-8 people.

Those Russians who have professional interest towards Japan or a Japan-related hobby (e.g. landscape designers, businessmen, sportsmen) visit the country despite exchange rates fluctuation.

A week-long package based on 4-star accommodation to see sakura blossom will stand in US$2,500 per person excluding the airfare.

Varvarka Travel, Moscow

Lyudmila Kourepina. Director General

We are now having less bookings for high-end packages starting from US$10,000 per person. In this respect, the situation resembles that with the Fukushima events.

This autumn, Aeroflot and JAL were freely giving away cheap seats, and that for the peak "maple" period! We had to abandon our already-paid-for block of seats as it became 10,000 roubles more expensive than publicly available rates. We suffered significant financial losses by leaving behind our deposit. And now we offer regular flight at 35,000+ roubles to our customers. We don't plan to take any blocks from Aeroflot. As for JAL, we have booked less seats for peak March and April departures than a year before.

Japan Seasons, Saint Petersburg

Anastasia Menshikova. Director General

Starting from late December, the interest to spring tours has aroused, preliminary booking for the upcoming autumn has started coming as well. Some individual tourists book their trips now; others hope for a better exchange rate in 2015.

Almost each and every client is being called for an interview in person. The Consulate demands proofs of employment, bank account statements and even ATM slips, which we haven't seen before. The interview for tourist visas was a very rare event, too. Returning customers, of which we have around 20%, are being paid especially close attention by the consular staff. It seems that those who visit the country 2-3 times a year are suspected of illegal business activities in Japan.

Our Japanese partners are very loyal to us. For one, when we failed to gather a group, they gave a group price for just one tourist.

Quinta Tour, Moscow

Irina Serganova. Director General

In November, the demand for tours to Japan was 20% higher than a year before. It stems from the fact that the country is quite an expensive one, an average trip starts at US$3,000-4,000 per person. That's why Japan, along with other luxury destinations such as Indian Ocean islands, hasn't dropped down as much as other countries.

But it's not impossible that the upcoming spring season would bring a significant drop in sales volumes. As of now, sakura trips are being booked less actively than usual, although usually we have around 30% of March-April packages sold out by December.

JTB Russia, Moscow

Olga Kharlyonok. Representative

This year, budget tours are in demand. Expenses are being cut by means of lowering hotel class, reducing the number of excursions. Some also go for a group excursion with an English-speaking guide, which proves to be much cheaper than hiring a Russian-speaking one and making up an individual program.

The period from September to November went very well. This year we have had more booking for corporate travel than last year. Corporate clients are booking trips for January and February quite actively.

Right now, Japan looks quite attractively, especially when compared to Europe and it's more expensive currency. In order not to confuse visitors of our website, we are going to remove prices in euro to use yens or roubles instead.

Read in Russian