Bracing for the New Reality.

Japan's Tourists Are Staying Put

At the Miyako Inn in downtown L.A.'s Little Tokyo, nearly two-thirds of the rooms sat empty last week and were expected to remain that way well into October.

Not far away at The New Otani Hotel and Garden, more than half the 434 rooms were vacant.

Kenji Yoshimoto, general manager of The New Otani, met with his staff last week to reassess the hotel's economic outlook for the rest of the year. And it didn't look good.

"Japanese tourism will be affected from now until the end of November," predicted Yoshimoto, who has been searching for new ways to boost his business that relies heavily on Japanese travelers.

"Do you have any ideas?" he lightheartedly asked a caller.

International, travel to Los Angeles is practically non-existent from all countries due to the uncertainty of airline flights, fear of further terrorist attacks, and concern about airport delays. But while other international tourists are expected to slowly return to California this fall, the Japanese will be more hesitant about venturing to the United States, especially if the terrorism crisis escalates into an extended war.

"It looks reasonable to say it will be five to eight months before we see a rebound," predicted Wayne Williams, a hotel consultant to several Japanese hotels in California and abroad. "The immediate hit has been profound and devastating."

Students of Asian culture point out that the Japanese are risk-shy travelers who are more sensitive to terrorist attacks. They live in a society that traditionally has a low-crime rate and few incidents of terrorism (except for a terrorist attack with sarin nerve gas on Tokyo's subway in 1995 that killed 12 people). "You have a society that has high expectations of safety in the streets," said Gordon Berger, director of the East Asian Studies Center at USC.

The drop-off translates into millions of dollars in lost revenue for Los Angeles because Japanese visitors are the No. 1 overseas travelers to the region. Last year 673,000 Japanese tourists came to L.A. County and spent $590 million during their travels, or $1.6 million a day, according to the Los Angeles Convention and Visitors Bureau. The trickle down effect of that $590 million translates into an annual $1.3 billion boon to L.A. businesses.

Much of that money was spent in high-end stores. The Japanese love to shop when they are in the United States because lower sales taxes and import duties make luxury goods here seem like a bargain. About 92 percent of Japanese tourists visiting L.A. said they did some kind of shopping, often in places like Louis Vuitton, Ralph Lauren and Tiffany on Rodeo Drive, or at Bloomingdale's and Macy's at the Beverly Center near Beverly Hills.

"They do come nearly daily (to the street)," said Pen Ellen Berne, president of the Rodeo Drive Committee and general manager of La Perla, a lingerie shop on the exclusive Beverly Hills street. "We've had a drop-off of all international travelers, not just the Japanese."

The Japan Travel Bureau, the largest travel agency in Japan and No. 1 organizer of Japanese travelers to L.A., has been deluged with cancellations. So has American Tours International, which handles large groups of Japanese travelers. "Everybody is concerned about future business," said Akihiro Iisuka, director of the Japan department for American Tours. He added that 40 percent of October's group tours from Japan to L.A. have been canceled.

This is disastrous news for L.A. hotels and tour agencies that have relied so heavily on Japanese tourism. Travel from that group was just beginning to make a comeback from its 1997 high when 848,000 Japanese tourists came to L.A.

Hopes dashed

The Miyako Inn in downtown L.A., which is owned by the No. 2 travel agency in Japan, Kintetsu International, was looking for a healthy September and October, with 75 percent of its 178 rooms booked with tour groups.

September, October and November are some of the strongest months for Japanese travel because airfares go down after Labor Day. October and November are strong months in the Japanese honeymoon season when newlyweds often travel overseas.

Hotel consultant Williams sat down with officials at the Miyako Inn last week to assess how long the Japanese might stay away from the area. They looked back to see how various events affected Asian travelers, particularly the Japanese.

After the 1991 Persian Gulf War, Williams said, Japanese travel to Los Angeles took about six months to rebound. After the 1992 Los Angeles riots, it took about eight or nine months. And after the 1994 Northridge earthquake, it was five months.

With that in mind, the Miyako is trying to keep business going for the next five to eight months. It had already been in negotiations to establish a partnership with a Western hotel brand, such as the Sheraton or Doubletree, in order to bring in more non-Japanese business.