EIJIRO Yamakita, who was appointed president of the 108-year-old company this year, is committed to continuing globalisation and digitalisation. In this wide-ranging conversation during WiT Japan & North Asia Virtual, the executive speaks about surviving Covid, reviving domestic tourism, gender diversity and his top three priorities. Full recording of the interview available here.
Q: You’ve been with JTB for 18 years, where you spent a lot of time in Europe, leading the global business. Then you returned to Japan at the beginning of this year, before being promoted to president. Can we read into your appointment the very conscious attempt by this 108-year-old organisation to globalise and modernise?
Yes, it is true that the my appointment was with the great expectation of transforming our company into a new style – which is adapted to the modern world, digitalised and globalised. That’s a big challenge. But the market situation has suddenly changed and the agenda has a changed a little bit too.
Q: Before we get into what you will be doing, your background is interesting. You served as chairman of the board of directors of Kuoni Travel Investment. European traditional tour operators have largely struggled, even before Covid. If you look at the Kuoni brand, which is still owned by the Kuoni-Hugentobler family foundation, it’s been split apart and sold in pieces. What did this experience with Kuoni teach you? What is the biggest lesson you learnt in Europe, that you are bringing back to Japan?
I learned a lot from this experience – Kuoni was a large company which included a lot of business segments. So that was why the decision was made to split the business into four major businesses – the tour operating business, visa entry, a B2B online business which was called GTA and the destination management part including land operating and incoming MICE business … covering the entire customer journey from the departure to the destination … So having both departure, outgoing and incoming business all together makes sense.
(Note: The Kuoni tour operating business in UK, Switzerland, Scandinavia and France was bought by DER, they have the right to the brand for 50 years. The Kuoni incoming/groups business as well as GTA and VFS (visa business) was bought by EQT, a private equity company who re-sold the business in pieces. The Kuoni incoming/groups business – except specialist DMCs – was bought by JTB and consequently rebranded Kuoni-Tumlare, and that handles mostly incoming into Europe.)
Q: So taking care of the customer end to end. Well, you have a big challenge on your hands – transforming a 108-year-old organisation and on top of that, you have Covid to deal with. What do you think of the timing? That perhaps it’s a blessing in disguise because it allows the business to stop and for you to take stock?
Yes, what a timing – very challenging timing. And that was why we needed to do a lot of emergency actions in order to cope with the current situation, but the essence never changes. Even before the Covid-19 outbreak there was a big change to the market and the agenda remains the same, basically.
Q: What’s the agenda, what are your top three priorities?
At this moment, of course, the top priority is how to survive under this situation. We need to reinforce the financial background in order to cope with this sudden dramatic drop of the business, no matter what the business model was. The impact is so huge that everyone in this industry needs to survive.
Secondly, adaptation to the digital, this is of course the key and it has been already done. This transforming process already started many years ago, but the market changes so rapidly. So, this could be a good opportunity for us to reconsider the adaptation of the digitization.
Lastly … our customer journey definition is something different from OTA’s – our definition is to support travellers from the beginning to the end, the end-to-end process – including when people start thinking about traveling, they already need some inspiration, information for booking process is involved, then at the destination, they need to be supported in order to improve the experience. The more they enjoy the trip at the destination, the more they will come back – good memories will lead to the next trip. Th is what we call a sustainable ecosystem.
Q: So three priorities – survival, rapid adaptation to digital and solidifying the entire ecosystem of the customer experience. I also understand from reading about you is that you are a real champion of ESG (environmental, social and corporate governance). Don’t you think that in this time of immediate survival that ESG has taken a backseat?
We consider this as a kind of CSR activity. I believe this is the essence, a basic fundamental for sustainable tourism. For example, what we’ve been doing to improve the demand at the destination, we’ve been holding big events where the people can get together at the local destination … where local talent, dancers, singers, everyone doing traditional art, get together, to participate and show what this destination has got for travellers.
Another example is to maintain the destination, we have clean-up campaigns that supports destinations like Paris, for example, where there is a lot of trash and too many people leaving without cleaning up.
Q: One positive that people see coming out of Covid is that maybe it’s an opportunity for countries like Japan to address their tourism deficit and to increase and rejuvenate its domestic travel industry. For example, get more young Japanese traveling – is that something that you are consciously doing to try and revitalize domestic tourism and get younger Japanese to travel?
That’s true. Of course, at the end of the day, people want people to travel across the border. But in our current situation, people cannot travel to other countries and this gives a good opportunity for us to reconsider domestic travel and younger people started to travel. Thanks to the GoTo campaign … this gave a good opportunity for younger people to see the destination in a different way.
Q: One of the key topics we have discussed at WiT over the years is how Japanese companies struggle with globalization. With this COVID, a global world has gone local – is this good for Japanese businesses?
Yes, it is good – but the world needs to be free to travel so I don’t say this situation is good. But this is a great opportunity to consider domestic travel and to solve over-tourism – it was becoming a really serious problem, even in Japan.
Q: Do you think that this time will mean that Japanese companies stop their globalisation or should they, like JTB, actually accelerate the globalisation efforts instead of putting them on hold?
I think globalisation is always necessary for Japanese companies. And this has been a big challenge, as you say, partly because of the language and partly because of the digitalisation … but globalisation is not necessarily about the process, but the mindset which is more important.
Q: I was listening to a podcast that was comparing China and the US and they were talking about each other’s superpower. And in that podcast, they say China’s superpower is long term thinking. The US superpower is optimism. What is Japan’s superpower?
I think Japan’s superpower is to make things happen. This is a really important part of tourism … like Shinkansen – make it happen without any delay, every five minutes for a train is running without any confusion. This ability is a great contribution to tourism.
Q: The big question people are asking is how long will recovery take? What do you think?
Two, three years. Everybody hopes it will be as soon as possible. The recovery process could come a little bit earlier, but I don’t think recovery would ever happen, even after two years, to the 100% level in the same way. The transaction style may change, group size will change – there will be big change.
Q: What kind of startups is JTB interested in supporting or investing in?
We are quite open to work with any kind of startups. But the point is to work with the company who can support our improvement of the customer journey. This is a really important concept for us – the customer experience should be improved by new technology.
Q: Covid has accelerated a lot of trends – e-commerce trends, media consumption trends – but maybe there are two trends that have not accelerated. What concerns you more – lack of gender diversity in Japan’s business or lack of English language skills?
Eventually language could be translated by a machine to some extent, so language is less of a concern. So … gender problem is more (of a concern).
We’ve been very much concerned about diversity improvement in the organization. In (the last) eight years, JTB has been a very diversified organization … We started as a foreign tourist handling company, not as a domestic company, so from the beginning, we have been globalized. Out of 27,000 we have 8,000 non-Japanese staff.
Q: When we return to Tokyo next year for our WiT event, what would you like to talk about then?
Maybe I would like to talk about how much our customer experience has improved by the time – that’s a great challenge for us.