Is hospitality sapping productivity in Japan?



Customers are gods, as a saying goes in Japan, where staffers press buttons for shoppers in department store elevators and hotel porters line up to bow to guests.

While Japan is revered for this hospitality, or omotenashi, all that bowing and scraping may be sapping productivity. So much so that the nation has ranked lowest of the Group of Seven nations by that measure for nearly 30 years.

With Japan facing a labor shortage as the population ages — the jobless rate is at its lowest since the late 1990s and projected to fall further — Prime Minister Shinzo Abe wants to more than double productivity growth in the service sector by 2020. He is targeting the service sector, which makes up about 70 percent of the world’s third-biggest economy, and has failed to embrace technology like Japan’s manufacturers.

“Success in raising the productivity of the service industry depends on whether we can get technology into service companies,” said Hidenobu Tokuda, a senior economist at Mizuho Research Institute Ltd. in Tokyo. “The problem is that service companies tend to be small, and unlike big manufacturers it’s tough for them to afford the initial investment of introducing technology.”

The government hopes that with lower corporate tax rates and consumer prices seen rising, companies will spend on automation. Abe told executives at a gathering of the country’s biggest business lobby last month in Tokyo that “the key to raising productivity is investment.”

A public-private sector panel on productivity last month gave examples of how costs can be cut through innovation while maintaining the level of service that people expect in Japan.

The Taiho Japanese restaurant in Tokyo uses tablet computers to cut out middlemen and place orders directly with fishermen, while the Yumotokan hot springs group has conveyor belts to send food to waiters out of sight of diners in its banquet halls. These technologies are used behind the scenes, while customer-facing service remains intact.

“While omotenashi raises the quality of services, it requires a lot of time and effort,” said Yasuhiro Kiuchi, a senior researcher at the Japan Productivity Center in Tokyo. “It’ll be hard to change this culture, but Japan has the inventiveness to make use of IT or improve efficiencies without customers noticing.”

Japan Airlines Co. defines omotenashi on its website as “a completely selfless approach to receiving guests” in a country where customers are not expected to tip for good service.

“Omotenashi is part of Japanese culture,” Kiuchi said. “Japanese customers demand a very high level of service but we don’t know how it should be paid for.”

Kiyoko Kondo embodies omotenashi. She’s greeted clients at the flagship Mitsukoshi department store in central Tokyo for 35 years and is able to welcome more than 300 regular customers by name.

“I get my reward when people say ‘Thank you,’ ” said 55-year-old Kondo. “It’s not cool to get money for my service.”

Productivity — calculated as gross domestic product per hour worked — was $41.5 in Japan last year, versus more than $50 in all other G-7 nations, according to Organisation for Economic Co-operation and Development data. The U.S. led the pack at $67.4.

The gap is worse in the service sector. Productivity at restaurants and hotels was 26.5 percent of that in the U.S., and about 41.5 percent in the retail and wholesale sector, according to an industry ministry report in 2013.

At a meeting with private and public sector leaders on June 18, Abe said he wanted to spur a “revolution” in service productivity. This panel designated five service sectors — restaurants, hotels, retail, health care and transportation — as having low productivity.

Japan is performing more strongly in areas such as finance and banking, doing better than France and Germany, the ministry report showed.

One sector where Japan’s hospitality is paying dividends is tourism, where, helped by a weaker yen, visitors have nearly doubled since 2013. The nation is ranked first out of 141 countries on its “treatment of customers” by the World Economic Forum, and Abe wants to harness this to boost Japan’s image overseas in the run up to the 2020 Olympics in Tokyo.

The challenge, however, is to monetize this hospitality while maintaining high standards.

“Japanese hotels and restaurants are full of the omotenashi spirit,” Abe said in a March speech. “But good service alone isn’t enough. Good service must be valued and compensated to sustain business.”

This complimentary-service strategy has been embraced by McDonald’s Corp.’s Japan business, where the restaurants’ menus offer a free smile to customers.

“I’m proud that people imagine a smile when they think about McDonald’s,” said Yumi Sato, a-24-year-old part-time worker at a store in Tokyo. “If it was a ¥100 smile, then I wouldn’t be smiling anymore.”

  • ilovetataki

    There is no trade off between quality-service and productivity in Japan. Those who are the face of the company in the eyes of the customer are being paid minimum wage. Where Japanese companies lose productivity is in old practices such as: shuffling staff from one section to the next, and often across the country; dismissing educated and highly skilled female employees once they marry and have a child; promoting unsuitable staff to managerial positions simply to save face, or to move them away from the company headquarters by shipping them out to a subsidiary; ignoring global trends and technological advancements in favor of the same-old practices that propelled Japan’s economy in the 1970s and 1980s, but are outdated and irrelevant today.

  • J.P. Bunny

    Most of this Omotenashi culture is just ego swelling puffery. I’m sure many people feel important because someone has pushed the elevator button, or thanked them profusely for entering the shop, but that’s about all it’s good for. All that bowing and polite language doesn’t make up for the airline seat that was given away, the substandard room instead of the deluxe one that was booked, or some bank teller following an afternoon wasting medieval rule because it’s the way things are done.

    Politeness is fine and greatly appreciated, but not in place of real work being done.

    • Al_Martinez

      Indeed! Too often, omotenashi is just a smokescreen for poor, “actual” customer service–service that matters.

    • Rebecca

      For Westerners, “omotenashi” can be a pain in the bum. Next month, I will be working three days in a new place and am being put up in a hotel. So far so good. I have now been asked what time I will arrive so that someone can escort me from the station to the hotel.

      I have also been sent a list of train arrival times. I’m sure they think they are being courteous but, the evening before I start, I want to arrive when I arrive and not so that someone can take me to a hotel that I can easily find on my own. I also feel a little insulted that it was thought I am incapable of looking up train times myself!

      The one I really hate is when you are accompanied to the door of a shop with the staff then handing over your bag. I find it embarrassing not courteous. I want to be given my bag at the cash desk.

      • Yufei Zhou

        Totally agreed. I feel the Japanese are not trying to make you comfortable with the omotenashi, but to propagate the superiority of their service. They have to understand, not everyone define good service in their way, but not try to convince people to accept their way. I personally prefer personal eye contacts in shops or restaurants, but not the feelingless “welcome”which is by the way pronounced exactly the someway where ever you go in this country.

      • Rebecca

        Or the person at the bank who greets all customers but not me until I look at him and also get greeted (not that I really want to be greeted in the bank, of course).

        I also pretty much hate clothes shopping in Japan and try to never make eye-contact with the staff as they will rush over and tell you that you can try or anything if you’d like. Yep, I know that. If you touch an item, you get “treated” to a hard-core sales pitch about how popular that is and how it would suit you and would you like to try it on. I’m often annoyed enough to walk out of the shop at this point.

        I had some humiliating servcice in an expensive department store: I bought a Doraemon mug as a joke present and then had to wait five minutes whilst it was wrapped along with others who were purchasing nice crockery. The display of haughty “service” really was inappropriate for a 650 yen mug and I felt they were totally looking down on me. They could have smiled and asked, “Would you like this wrapped?” I would then have not spent five minutes in total embarrassment.

  • skillet

    It was useless, but I really enjoyed it. That that trademark silliness is fun.Makes Japan unique. Kind of like the Good ol USA would not really be the good ol USA without guns. Just like France with its wine and the South with grits and Dixie Flag.

    But it is not just silliness.

    I was pleased to see the Japanese still put pretty girls in front of stores that pantomime perfect form of greeting. It is good that some things have not changed since the 90’s when I was there. Japanese insight into form and life force and its mastery for beauty, strength or efficiency is part of why Japan is the pinnacle of civilization.

    Don’t get rid of culture just for efficiency. If I were in Japan today, I think my first stop would be yasukuni shrine to pray.

    I say that as a Christian.

    • DrHanibalLecter

      If you go to pray at the Yasukuni, you do that as YOUR idea of what Christianity is.
      It is sort of the perverted ideas that today’s Republican lunatic fringe would consider Christian.

      • skillet

        Yeah, angry republicans everywhere are running around with Hinomaru and yelling Banzai for the emperor. You are on to a real social problem.

        Are you an intellectual Berkley multi-culturalist, by chance ?

        I saw an old video clip today. Jesse Helms wanted to bomb Pearl Harbor.

      • keratomileusis

        Whenever the black van passes by I wonder if anyone inside has ever bothered to ask the Emperor what he thinks about what they are doing.

      • DrHanibalLecter

        Funny you should, ask… I did spend one term at Berkeley, but it was long ago.

        In those days we had no idea anything except multi-culture exists, or maybe we just smoked too much of the sacred weeds…

      • keratomileusis

        “Republican lunatic fringe” is an oxymoron…

      • DrHanibalLecter

        Welll…. the really bad news is that republican and lunatic maybe an oxmoron (with or without the oxi), but republican and frings is more like a contradiction in adjecto as far as the USA goes….
        So. lets call it 50/50 ?

    • Toolonggone

      > Kind of like the Good ol USA would not really be the good ol USA without guns. Just like France with its wine and the South with grits and Dixie Flag.

      Well, I praise SC governor Nikki Haley–even though I am not a fan of her– for her great decision to take down the Confederation Flag from the state capitol. Culture embraces both good and bad traditions. Many people want to preserve good ones and restrain–if impossible to remove completely–bad ones.

      Confederation flag is not just the tradition of loyalty and respect for the Southerners at the time of Civil War. It also embraces an ugly history of slavery and white racial superiority that has lasted over 150 years. Black church massacre in Charleston last month led people to put one of the ugliest traditions to end. It needs to go for the sake of nation.

      Speaking of Japanese culture, Yasukuni is a product of war shrine–not just in the scope of Asia-Pacific War. Virtually, it’s cultural heritage of war history starting from the northern civil war(Boshin) in the late Tokugawa era. I don’t blame you for going there out of curiosity, but watch out for conflation of religious perspective into conventional political practice. Christianity has become an abusive product of political weapon in the North America. So is Shinto in Japan.

      • skillet

        PC left is a lot like the Taliban. Trying to purge all symbols of the past.

        I for one got a sick feeling when the temple of Jonah was blown up by ISIS and the largest Buddha in the world was blown up by the Taliban.

        Honoring the past and heritage is important to me. Heard too many stories from Granny growing up. About the suffering her family endured in Sherman’s March to the Sea. Does that mean I am for slavery ? No, but I see no need to demonize the people of that era. Even admire Lincoln.

        On the Japanese side of my family, at the end of WW2, my aunt-in-law had to flee to one of the last departing boats from their vast estate in Korea. With their Korean servants pursuing them to take their riches, silk kimonoes and likely kill them.etc.

        A fine lady. She is very old now. Does that mean I am for Japanese colonialism. ? No, but I admire courage and the spirit of adventure of this great woman.

        Japanese colonialism was initially an act of self-preservation. WW2 began in my view with the Black Ships and Commodore Perry. Japan would have become a colony if the Meiji era leaders had not been so brilliant.

        Does that mean I agree with Tojo, Robert E Lee, Stonewall Jackson, Jefferson Davis or Genghis Kahn for that matter. No, in a way they were monsters. In a way great.

        But I prefer to celebrate history than take Ajax to culture. I personally benefit culturally from contemplating the genius of Alexander the Great. Imagine conquering from Greece to India !!!

        Even if I personally am happy just to tend my garden and feed my chickens. People often say the Japanese should have allowed themselves to be collectively guilt tripped like the Germans after WW2.

        Most Japanese will admit is was not smart to bomb Pearl Harbor. But they are correct to resist the collective brainwashing, shaming and guilt the Germans accepted . Japanese have a cool history and should be proud.

        Hope Japan keeps the PC guilt trippers out of their schools, media and culture. That is more important for the future of Japan than the WW2 Pacific theater ever was.

        Plus, it irritates liberals to see that not everybody is into masochistic self-flagellation.

        So let’s hear it for Robert E Lee.

        And especially, Showa Emperor banzai !!!

      • DrHanibalLecter

        Oughhhhh, you almost got me.
        First I thought no one could possibly be that retarded, but them I came to that sentence:

        “Japanese colonialism was initially an act of self-preservation. WW2 began in my view with the Black Ships and Commodore Perry. Japan would have become a colony if the Meiji era leaders had not been so brilliant.”

        Then I understood that this sarkasm…
        Respect, does not happen often that someone almost got me…

      • Toolonggone

        Oh, OK. I think I just saw where you come from. But, the shrine was not just for the one who lived longer than anyone in the imperial family.

      • skillet

        One of the events that made loathe the destructive approach of academic multi-culturalism.

        At first, it seems nice. Tolerate other cultures. Be open. But what happens is that in a desire to be open, the self-flagellations and demonization of people who just live their lives and like their own country the best. Nothing wrong with that.

        My own Japanese father-in-law who is in his 80’s now speaks English better than anyone of his generation I have ever met. Went on countless business trips from the 1960’s to the 1990’s.

        He always hit it off best with the Americans really close to their grassroots. He loves Japan and loves talking about his yamato tamashii or Japanese spirit after a few whiskies.

        He told me once he did not really respect or believe in the authenticity of people who did not love their own country and put it first.

        A degree of nationalism is necessary for people to be true multi-culturalist. For me, the multi-culturalsit social justice water who goes around demonizing everybody is for me a psycho and a phoney.

        Got to love yourself before you love others. I remember I noticed with my liberal buddies in the 1990’s a certain resentment when the Japanese did not have the same desire to demonize their own culture that America-hating liberals do.

        Hating your own country is not intellectual or tolerant. In my experience, the most obtuse and intolerant folks are leftists.

        I personally consider myself a post liberal.

      • Toolonggone

        >the self-flagellations and demonization of people who just live their lives and like their own country the best. Nothing wrong with that.

        I don’t think these two get along each other for the tolerance of other culture regardless of where people live. It is ripping the nation apart.

      • DrHanibalLecter

        You might find, that there is something you did misunderstand…. Given that you obviously are american and the subject is culture, no one will blame you.

        “Culture embraces both good and bad traditions.”

        What you mean is called nationalism, its is for the blind and just because it is something that ignorant retards believe, does it not make a description of culture.

        If you come from a lucky country, then you have learned that culture helps you separate the good and from the bad traditions.

    • J.P. Bunny

      “……..Japan is the pinnacle of civilization.” Not when my guaranteed one minute order isn’t ready after ten minutes. Not when a bank form needs to be filled out several times because of errors, but you are not allowed to be told what those errors are. Not when a JR worker refuses to exchange my defective Suica because “we don’t do that here.” All the deep bowing and overly flowery language in the world does not make up for people that can’t, or won’t do their jobs properly.

      “Japanese insight into form and life force and its mastery for beauty, strength or efficiency…” Sounds like something out of a coffee table book by those that came, looked, and went.

      • skillet

        Just come home to the good ol’ USA. My wife had never seen a broken toillet until she moved here. Stuff is made to tear up.

        Sounds like you have it too good over there.

        I am glad I came home to get a job and public pension. But then again, even that might get stolen from the bankers !

        Sometimes, I miss Japan so much I am almost sick. Love my home and garden here, but Japan is cool.

        (If not for cheap land, gun collection and my garden, there would be no reason to live in this country. Prefer Japan for most things. Or at least, being a gaijin in Japan. But the Arudou dude said it might be less rosy as you get older. Made sense. He pisses me off and sounds like a spoiled brat at times, but also produces some gems of insight. )

  • DrHanibalLecter

    “Is hospitality sapping productivity in Japan?”

    Silly question, of course it does. The question is: Do we customers want to pay higher prices for this?
    Or, as we can see more and more in Europe at the moment: Should life be surrendered to one single goal: maximising profit?

  • Yoji

    Importance of omotenashi is in a fine balance and timely accomplishment,
    In term of labor productivity, Japanese hospitality is lower than US
    but, courtesy might be higher than any other countries. We want the
    whole world to know Japanese have abilities of multitasking performance.
    While eating, they learn good manners. Besides that, Manga writers can
    draw pictures and additionally think about stories, We have enough of
    everything. Of course, it is better to raise labor productivity,
    Japanese should understand the difference hospitality and omotenashi.
    Hospitality is definitely business word all over the world and
    omotenashi is cultural one.

    • Rebecca

      Genuine question, Yoji- Why are Japanese people obsessed by the “whole world knowing” Japan can do this or that? Or what foreigners think about Japan and Japanese culture? You can barely turn on the TV at the moment without some programme stalking foreign tourists to make them say how wonderful Japan is. My guess is a feeling of inferiority otherwise, why care what people from others countries think or know about Japan? What do you think?

      I don’t think “omotenashi” is as unique as Japanese would like to believe or hotels/businesses in the west would never advertise with “We anticipate your every need” or “We take care of all of your wants”.

      Again, however, as discussed above, what is considered “courteous” in Japan may very well be inappropriate, irritating or creating too much fuss in other countries.

      • J.P. Bunny

        Agreed. If you are good at something, you don’t need to constantly tell others, nor hear it from others.

      • Yoji

        Cool perspective and question, Rebecca-in my point of view,that’s reason why Japan is an island nation and homogeneous race.You should know the deference high and low context cultures by Edward Twitchell Hall- he was an American anthropologist and cross-cultural researcher,Ph.D. And also there may be additional reasons, preparing for 2020 Tokyo Olympics, population decrease,and national policy for tourism.

        However essentially,Japanese have many experienced craftsmanship and want to show them with pride to the world. Because they’re accommodating people. I can imagine somebody doesn’t like that custom. It is much appreciated if you would understand Japanese complexity and sophistication.
        Having them, Sushi is super delicious!
        Good luck.

  • Toolonggone

    I don’t understand the point of this article. It seems to generalize correlation between good quality service and high productivity based on monetary figures. Does comparatively lower output in Japanese service industries mean they have lower productivity than American counterparts? There is a significant variance in quality service among American firms. Look at Walmart and McDonald. They are widely criticized for labor exploitation and minimum wage–despite their nation-wide business. And Microsoft? They are outsourcing workers from India and China upon limited contract by replacing regular workers for cost-cutting scheme. They have been on the downhill since Bill Gates left.

    It’s just plain silly to connect employee’s courtesy behavior with the statistics.

  • MM

    Are they seriously trying to take credit for the “free smiles” in Japanese McDonalds restaurants? Because that’s been around the in US since the 1960s. Most definitely not omotenashi.

  • J.P. Bunny

    Was there an age when men weren’t men? What were they, iguanas? Yes, awesome song. People marching off to be killed, sent by those who won’t get killed.

    • skillet

      That was the spirit of the age. As an American, of course I am glad my side won. But I do not think America was as right as we learn here in this country. (Although PC liberals may find a way to demonize ever form of patriotism)..

      Victor writes history. And many of those who sent them off to war got executed as war criminals.

      If you like at it, the reaction of the Japanese and there behaviour since the “black ships” of Commodore Perry was understandable.

      Acknowledge the mistakes of the past, but never be brainwashed into groveling. That is how to deal with PC psychos who have guilt-tripping others as their vocation.