ATAMI, Shizuoka Pref. — Ryuichiro Mori, sales manager at Hotel New Akao, sees one emerging ray of hope for this hot-spring city mired in a long-term slump: a group tourism boom in Taiwan, South Korea and China.

Since the major resort hotel, which boasts a 48-year history, sent its first overseas marketing mission to Taiwan in 2000, the results have been surprising.

Customers at the hotel from other parts of Asia skyrocketed from 900 in 2000 to 3,000 in 2001. Most were from Taiwan.

Meanwhile, the number of American and European visitors in the same period dropped from 400 to 200.

“Some other hotels seemed to have had more than twice the number (of Asian customers) than ours,” said Mori, who now views China as the next big target.

Beijing started allowing Chinese nationals to visit Japan for sightseeing two years ago.

The hopes harbored by Atami are shared by many recession-hit tourist cities across the country.

But tourism officials are concerned that the nation’s high travel costs may hinder any recovery. Critics also claim the government and tourism industry need to wage more aggressive campaigns in an effort to attract Asian tourists.

The number of tourists to Atami, which once thrived as a popular honeymoon destination, has fallen 30 percent over the past decade to 3.13 million, mainly due to a fall in group tours.

The number of local facilities with accommodations has accordingly dropped 29 percent, from 720 to 514, over the same period.

Traditional resort towns such as Atami have relied heavily on corporate customers, which bring employees in groups as part of worker welfare programs.

But the the nation’s decade-long economic slump has slashed corporate demand, and an increasing number of Japanese tourists are going abroad as their preferences diversify.

The graying population is another headache.

Japan’s population is projected to peak as early as in 2006, with the birthrate expected to keep on declining.

“The number of Japanese is limited. We are sharing a shrinking pie,” said Hiroshi Ono, manager at the Atami Chamber of Commerce and Industry.

When the Tourism Industry Association of Japan was set up last October as the nation’s first industry body overseeing all tourism-related trade, the promotion of “inbound tourism” was listed as one of its three priorities.

Like Atami, tourism-dependent prefectures such as Shizuoka, Nagasaki and Hokkaido have staged various campaigns over the past few years aimed at attracting group tours from Taiwan, China and South Korea.

Part of this effort includes dispatching regular prefectural marketing missions.

This trend recently prompted the government to launch an effort to promote inbound tourism and raise the number of overseas visitors to Japan to 8 million in 2007 from the 4.77 million logged in 2001.

The government has also expanded its budget for “Visit Japan” campaigns for fiscal 2003 to 3 billion yen, a 10-fold increase from this year.

“Now the government has finally started strengthening it stance to reach this (goal) as a national policy,” said Koji Shinmachi, chairman of the Japan Association of Travel Agents and president of Jalpak Co., the travel agent unit of the Japan Airlines group.

Seiichi Uzawa, president of the Atami Spa Hotel Association, pointed out that China’s coastal areas have great demand potential. These local economies have the world’s fastest growth rates and encompass a population totaling some 400 million.

Visitors from South Korea, Taiwan, China and Hong Kong accounted for 54 percent of the total overseas visits to Japan in 2001.

The government thus plans to spend the entire campaign budget for fiscal 2003 on the top five markets: South Korean, Taiwan, the United States, China and Hong Kong.

Izumi Sunahara, general manager of sales and marketing at ATC Japan Tours Inc., views China as having the greatest potential among Japan’s Asian neighbors.

“I think the markets of Taiwan and South Korea are maturing,” Sunahara said.

ATC Japan Tours is the Asian inbound-tourism unit of JTB Corp., the nation’s largest travel agency.

The annual percentage of Taiwanese and South Koreans who travel abroad has already surpassed the Japanese in this regard, Sunahara pointed out.

But China is still at an early stage of the overseas travel boom, with a range of regulations limiting qualification for visas to visit Japan for pleasure.

Tourist visas to Japan are now issued only for residents in Shanghai, Beijing and Guangdong Province.

To discourage illegal overstays, Chinese authorities require deposits of between 30,000 yuan (about 450,000 yen) and 50,000 yuan, according to Sunahara.

In addition, the only pleasure visits to Japan permitted by Beijing are group packages. After arriving in Japan, Chinese visitors are prohibited from going anywhere other than locations designated in advance, even if they want to see relatives who have settled here.

China retains these regulations partly because Japanese authorities are deeply concerned that deregulation could trigger a massive wave of illegal Chinese immigrants from poor rural areas.

Of the 8,952 foreigners deported in 2001 for illegally entering Japan, Chinese accounted for the largest group by nationality, at 3,032.

In the same year, about 391,000 Chinese visited Japan under tourist visas.

Hiroyuki Igawa, employed in the tourism promotion section of the Nagasaki Prefectural Government, noted that 2.7 million Chinese tourists could visit Japan annually if all the regulations were removed.

This figure is based on per capita gross domestic product ratios, along with the number of tourists who visit Japan from South Korea, Taiwan and Hong Kong.

Sunahara of ATC Japan Tours, however, is not so optimistic.

The most serious problem in this equation is the high costs that face both tourists and tourism operators in Japan. These costs could entail Japan losing out to rival destinations, including Europe, the United States and other parts of Asia, Sunahara said.

“Air fares are high. Personnel costs are high. Food is expensive in Japan,” Sunahara said.

“China is looking at all of the world, including Europe and the United States. Japan needs to push down those costs to win international competition.”

Tadashi Okudaira, dean of the tourism faculty at Sapporo International University, said the government’s tourism-promotion measures are insufficient compared with those of other countries that have ministry-level bodies campaigning in this regard.

“Japan does not know much about tourism promotion policies,” Okudaira said.

According to the World Tourism Organization, an international business association of tourism-related corporate chief executives, Japan ranked 33rd globally in terms of foreign arrivals in 2001 with a total of 4.77 million visitors.

This number is the lowest in Asia and well below that of Poland, Ireland, Croatia, Brazil and Tunisia, for example.

Okudaira said the government should initially focus on advertisement campaigns and set up overseas offices to oversee tourism promotions.

Oh Choong Sub, an official at the Tokyo office of the Korea International Tourism Organization, said Japan lacks strategic image campaigns.

Many South Koreans still view Japan as a country of crowded urban areas and know little about its beautiful natural scenery, such as is found in Nagano Prefecture and in Hokkaido, Oh said.

“Japan should advertise itself with different images,” he said.

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