Inside Asian Gaming

INSIDE ASIAN GAMING | March 2012 6 Inbound tourism CLSA points out that although Japan is a highly-developed country with a unique culture and world-class tourist attractions, its relative share of inbound international tourists has traditionally been low compared to neighbouring countries— even before last year’s earthquake, tsunami and nuclear disaster. Under the heading ‘Tourism—Waking a sleeping dragon’, CLSA/Credit Agricole Securities (USA) says: “The Japanese government has a goal to bring in 25 million tourists in 2020, up from 6.8 million in 2009. And IRs can provide a needed boost in inbound tourism in Japan. Despite the global popularity of the Japanese culture, the nation has historically had issues attracting foreign tourists. Japan welcomed 8.3m tourists in 2010, ranking it 30th in the world. “Japan’s tourism industry benefits from its proximity to China. Up until the Fukushima tragedy, Japan was the fastest- growing destination for the Chinese, aside from Taiwan (which recently allowed direct flights to China) and the USA. Should IRs be introduced in Japan, the growth potential for the nation’s tourism industry is significant, especially as it relates to Chinese tourists.” “Singapore is the best example of strong growth potential,” says the report. “Shortly after the opening of Resorts World Sentosa (RWS) and Marina Bay Sands (MBS) in 2010, Chinese tourists flooded into Singapore at a 30% Cagr [compound annual growth rate] from 2009-11. This compares to just 1% Cagr over the five years prior to the IR openings. Singapore added a total of nearly 3.5m total tourists in 2010 and 2011, representing an average annual growth of 17%. Given our expectations for larger-scale IR developments in two large cities in Japan, we believe that Japan could add significantly more than the nearly 4m tourists that Singapore added in one year. This could result in more than a doubling of total visitation to Japan, which saw just 6m visitors in 2011,” add the authors. Under the heading ‘Japan theme parks: The more the merrier’, the report states that the country has some of the highest levels of theme park occupancy in Asia. “Of the top-25 most visited theme parks in the world, five are in Japan and two (Disneyland and Disney Sea in Tokyo) are the top-five most visited parks in the world. Furthermore, Japan charges the highest admission fees in Asia and [they] are almost comparable to daily tickets charged in Western locations. “Furthermore, Japan has a very high ratio of [theme park] ticket-to-ancillary spending, with nearly 50:50 ticket-to- ancillary spending, which compares to roughly 70:30 in the USA and Singapore. The higher ancillary spending is attributed to the Japanese’s higher tendency to purchase gifts and souvenirs.” The authors say that despite a 1.5% year-on-year fall in retail spending in the country during 2011, there are now signs of recovery—especially in jewellery, watches and art sold in Japan’s department stores. “We expect the retail malls at the [Japanese] integrated resorts to do very well, given the precedent from Macau and Singapore. This is especially true if the resorts are able to attract the number of visitors, particularly ones from China, like those of the IRs in Macau or MBS and RWS in Singapore.” MICE trap Tokyo currently is the largest market— on a city for city basis—for conventions in Asia, says CLSA/Credit Agricole Securities (USA). Furthermore, it is undersupplied with venue space compared to Hong Kong and Macau, adds the report. “According to the Tokyo Convention Tokyo gaming revenue—a case study Potential impact of Japan IRs on inbound tourism Source: Credit Agricole Securities (USA) Cover Story