Editor’s Note: Today we welcome veteran journalist Bill Dorman to Civil Beat. Bill is the news director for Hawaii Public Radio and will also be a regular columnist for us, writing about the Asia-Pacific region where he lived and worked for many years. His new “Asia Matters” column will appear at least twice each month. Before becoming HPR’s news director in 2011, Bill worked as a Tokyo-based business news reporter for CNN and later as Managing Editor for Bloomberg News’ Asia Pacific Broadcast. He has also worked in New York, Washington D.C., Atlanta and Peshawar, Pakistan.

Organizers of this past weekend’s Honolulu Marathon say nearly 31,000 people signed up for this year’s race. As usual, about half of them came from Japan, many bringing relatives and friends. It’s simply the latest statistical reminder of the importance of the Japanese tourism market to the state’s economy.

Overall figures from the Hawaii Tourism Authority show that more than 1.2 million Japanese visitors have come to Hawaii in the first 10 months of 2012, a 4 percent increase over the same time period in 2012. But those visitors are spending 10 percent less every day than they did a year ago, according to the tourism authority.

Some in the hospitality industry are concerned about what this means for 2014.

The yen is projected to remain weak relative to the dollar, which means that Japanese travelers’ money won’t stretch as far as it used to, especially at a time when hotel rates in Hawaii are climbing.

But a bigger threat may be an increase in Japan’s consumption tax coming in April. How much damage could these factors cause to Hawaii’s Japanese tourism market? The answer can be found in a combination of statistics and anecdotes. The trick is to focus on the right ones.

On the last Friday of November, Hugo Boss opened a sprawling new flagship store in Tokyo. That three-story building is on the trendy shopping street of Ometesando — next to Emporio Armani, down the road from Tod’s and across the way from a Ralph Lauren store the size of a modest boutique hotel.

The store’s opening brought cameras and crowds, not surprisingly, but even streets away from the supermodel glamor there were crowds of shoppers spreading their yen amid the early holiday cheer.

Women’s Wear Daily quoted Hugo Boss CEO Claus-Dietrich Lahrs proclaiming the Japanese consumer has gained confidence “after a long, long moment of insecurity.”

Confidence is one thing, spending is another. But that too is up in Japan, if only slightly.

Government figures released the same day as the Hugo Boss opening showed household spending up nearly 1 percent from a year earlier, while the unemployment rate stayed unchanged at 4 percent. Other macroeconomic figures paint a more cautionary picture. Third quarter GDP growth skidded to a revised 1.1 percent, down from 3.6 percent in the second quarter.

In other words, spending and confidence remain fragile. As we have learned in the United States, any economic recovery can be painfully uneven.

There is also no denying the potential impact of an impending rise in the consumption tax from 5 percent up to 8 percent this spring, and then up to 10 percent in October 2015.

This can affect many consumer purchases, including airplane tickets to destinations like Hawaii.

In 1997, when then-Prime Minister Ryutaro Hashimoto raised the consumption tax from 3 percent to 5 percent the budding economic recovery was slammed back into recession. After a record setting year for Japanese visitors year — 2.2 million came — the number of arrivals in Hawaii tumbled by nearly 10 percent.

But 2013 is not 1997. Japan’s banks are no longer staggering under a load of bad loans and opaque debt. Presumably we are not teetering on the edge of another financial crisis, Asian or otherwise.
The workforce in Japan has gone through some agonizing restructuring and corporate balance sheets are stronger. One factor helping that outlook is, ironically, the weaker yen. The same condition that hurts the wallet of any Japanese resident traveling outside the country helps companies that export by making their products less expensive overseas.

Then there’s the stock market. The Nikkei 225 Average is up more than 60 percent from a year ago. And according to a September report from Cap Gemini SA and Royal Bank of Canada, more than half the millionaires in Asia live in Japan. There’s a reason Ralph Lauren built a 24,000-square-foot flagship store in Tokyo; there are plenty of Japanese with money to spend.

And there is one other recent government statistic from Japan that is telling. The Ministry of Health, Labor and Welfare reports full-time employees took only 47 percent of their accrued vacation time this year. That’s a decline of more than 2 percentage points from 2012, and the first drop in three years. The government has a stated goal to raise that figure to 70 percent by the year 2020.

Combine this motive for vacation with the financial means that many Japanese have at their disposal, and you have a strong case for continued international travel.

In the 2012 documentary “Jiro Dreams of Sushi,” Jiro Ono, the first sushi chef to receive three Michelin stars says, “In dreams I would see grand visions of sushi.” The dreams of Japan’s international travelers are less clear. The choice of easily available destinations with convenient air travel has grown dramatically in the past several decades. So has the taste for different kinds of travel experiences.

The question is not whether Jiro’s compatriots can afford plane tickets or whether they dream of vacation, it’s whether those dreams still feature Waikiki. And as the next year plays out, that will prove to be partially a matter of economics, but like the choice between ika and tako, more importantly a matter of preference and taste.

Listen to Bill Dorman’s “Asia Minute” every morning on Hawaii Public Radio, HPR2.