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Weak yen will trump prints row for tourists

Figures suggest wallets, not finger scans, are visitors' top concern

by Michael Hassett

Online letters of protest were filled out. A group of nearly 70 civic organizations from around the world delivered a formal letter of disapproval to Justice Minister Kunio Hatoyama. Protesters gathered outside the Justice Ministry and thrust an inflated 3-meter-high yellow hand with an extended forefinger toward the building. Hands were clenched in fists of rage.

The angry, frustrated, and disfranchised shouted in unison. They shouted again. And again.

And at ports across the country, most non-Japanese were fingerprinted and photographed — over and over again.

Business leaders cried out. The New York Times quoted Jakob Edberg, policy director at the Tokyo office of the European Business Council: “If businessmen based here have to line up for two hours every time they come back from traveling, it will be a disaster.”

And yet more prints were digitized, more photos taken. Click, click, and click.

Pulitzer Prize-winning journalist Thomas Friedman fumed in his New York Times Op-Ed about his own country’s fingerprint program: “Roger Dow, president of the Travel Industry Association, told me that the U.S. has lost millions of overseas visitors since 9/11 — even though the dollar is weak and America is on sale.

” ‘Only the U.S. is losing traveler volume among major countries, which is unheard of in today’s world,’ Dow said.

” ‘Total business arrivals to the U.S. fell by 10 percent over the 2004-5 period alone, while the number of business visitors to Europe grew by 8 percent in that time. The travel industry’s recent Discover America Partnership study concluded that “the U.S. entry process has created a climate of fear and frustration that is turning away foreign business and leisure travelers and hurting America’s image abroad.’ “

Click, click, click.

And then the U.S. Commerce Department reported that the number of international visitors to the U.S. in 2007 is set to surpass the near record of 51.1 million set in 2006, which was a 4 percent increase over the number of visitors in 2005.

Wait a second. What? The U.S. implemented one of the most unwelcoming, radical personal-information-gathering operations in history, targeted solely at nonresident foreigners, and the number of international visitors has risen over the past two to three years? It doesn’t make sense! It just can’t be true!

Oh, but it is.

The U.S. travel and tourism industry has posted positive gains in the number of nonresident arrivals for the last 20 consecutive quarters. The last time the number of arrivals was down was the third quarter of 2003, which was before the controversial U.S. Visit fingerprinting program went into effect on Jan. 5, 2004.

This is an important point to note. Visits to the U.S. by nonresident foreigners did reach a record high in 2000, and then declined from 2001 to 2003, but since the introduction of fingerprinting in 2004, the number of visitors has risen year after year (up almost 5 million in 2004, 3 million more in 2005, almost 2 million more in 2006, and a projected 2 million more in 2007 to surpass the previous record high attained in 2000).

Of course, we can select certain countries, such as Japan, and state that the number of visitors to the U.S. has fallen from 5.1 million in 2000 to 3.7 in 2006. But we can just as easily highlight a number of countries from which visitation has increased since 2000: China, India, Korea, Vietnam, Russia, Spain, Ireland, Australia. Further, the States’ share of international visitor arrivals has gradually fallen since 1992 (recording during the Clinton-Gore administration the greatest declines ever), and would thus not appear to be the result of any recent change in policy.

According to data released by the U.S. Commerce Department on Jan. 17, excluding Canada and Mexico, overseas arrivals were up 10 percent for the first 10 months of 2007.

And where are all these visitors coming from? Virtually everywhere. Western Europe: visitation up 12 percent for the first 10 months of 2007 (posting double-digit growth from France, Germany, Sweden and the Netherlands). Eastern Europe: up 10 percent over the same period. Asia: up 4 percent (visitation from India and mainland China has grown by 43 percent and 25 percent, respectively, for the year). South America: up 17 percent for the year so far. Oceania: up 10 percent for the year. Middle East: up 12 percent. Africa: up 10 percent.

So the obvious question must be: If the U.S. can “welcome” foreigners with long lines, questioning, and demands for fingerprints and photos, and still have record numbers of outsiders come pouring through its borders to spend record amounts of dollars, does Japan really have anything to fear?

You actually have to wonder.

As Mr. Friedman wrote, “the dollar is weak and America is on sale.” Against the euro, the dollar lost 10.3 percent in 2007, following a 10.2 percent drop in 2006. Against the Brazil real, the dollar fell 17 percent in 2007. In fact, last year the U.S. dollar declined against 14 of the 16 most actively traded currencies.

This is why a trip to Orlando, Fla., a city that has more hotel rooms than any other in America bar Las Vegas, and plays host to Disney World and parks of virtually every theme (ever hear of “Holy Land,” which advertises itself as “Jerusalem in Orlando?”), will usually lead to just as much exposure to non-Americans than a visit to the United Nations.

Here in Japan, even though the yen has appreciated considerably in recent weeks, Japan has for the most part also been “on sale.” The yen fell 5.2 percent against the euro in 2007, 10 percent in 2006. The yuan has risen about 10 percent against the yen since China stopped pegging it to the U.S. dollar in July 2005. In October of last year, the Australian dollar strengthened against the yen to a level not seen since 1991; in July, New Zealand’s dollar reached its strongest against the yen since 1986.

As we enter the ski season, you only have to visit the Hokkaido resort of Niseko to see foreign currency in action. There, the number of non-Japanese visitors has increased more than eleven-fold since 2000, 80 percent of whom are from Australia. In 2005, assessed land values were up 30 percent, primarily driven by Australian investment, and selling prices were up even higher. Since August 2003, Japan has only twice had a year-on-year monthly decrease in the number of foreign visitors (February 2006, down 1.1 percent over February 2005; January 2005, down 4.1 percent over January of 2004).

And where are these visitors coming from? Virtually everywhere: China (up 24.3 percent in 2006), Singapore (up 23.1 percent), South Korea (up 21.2 percent), Finland (up 18.2 percent), Hong Kong (up 17.9 percent), Vietnam (up 15.8 percent), and Portugal (up 14.7 percent), to name a few.

Um, Finland? Yes, Finland. The Embassy of Finland in Tokyo reports that there are only about 600 Finnish citizens in Japan, but over 25 times that number visited in 2006, and the numbers were fairly evenly spread out over the 12 months. And the numbers so far for 2007 are much higher than those for 2006. Go figure.

Where are visitors not coming from? Principally the Philippines (down 31.6 percent in 2006) and Ireland (down 7.9 percent). The dramatic drop in visitors from the Philippines was a direct result of the Japanese government’s move in 2005 to limit the number of entertainer visas being granted. The number of visitors from the Philippines started falling in August 2005 and continued to show year-on-year monthly drops through February 2007.

But the number of visitors from virtually every other country showed a gain in 2006 over 2005, and even though the complete data for 2007 has yet to be posted, the Justice Ministry did announce on Jan. 11 that a record 9.15 million people from abroad visited Japan in 2007, which is up 12.9 percent over 2006. Even the number of visitors from Ireland has rebounded. And based on the trend we see — a weak dollar and yen yielding record increases in the numbers of visitors, even in light of mass fingerprinting in the U.S. — we can project that the introduction of Japan’s new fingerprinting scheme will most likely not have any significant impact on business or tourism here in Japan.

Click, click, and click.

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