Analysts estimate that the 2020 Tokyo Olympic and Paralympic Games will have a positive economic impact of some ¥20 trillion.
But for small and midsize companies, which make up 99.7 percent of businesses in Japan, an up to 20-month closure of parts of the nation’s biggest convention center to make way for media and broadcasting facilities is set to cost them big.
Two main halls at Tokyo Big Sight in the Odaiba waterfront district will be closed off to trade shows between April 2019 and November 2020 and the remaining halls at the facility will be shut down for the games from April to October 2020 as well.
The Japan Exhibition Association says the shut down could translate to more than ¥1 trillion in lost sales and affect 1,000 companies associated with the exhibition industry, including booth decorators and logistics firms, if exhibitions are canceled or downsized.
It’s a “matter of life and death,” said Masato Suzuki, deputy general manager of Tokyo-based manufacturer Sanko Tsusho Co. Ltd.’s inspection equipment department.
“We small and midsize firms don’t want the Olympics if it means canceling or scaling down exhibitions. It’s by far our most important business opportunity,” he said, adding that about 70 percent of his company’s sales are generated by clients established at the exhibitions.
Suzuki said unlike larger companies, smaller firms can’t afford to pay for advertisements in magazines or on TV and conventions were their form of marketing.
Fearing the financial damage the closures will have on exhibitors and the trade fair industry, JEXA will submit a petition signed by nearly 80,000 stakeholders to Tokyo Gov. Yuriko Koike on Friday, urging her to revise the current plan so that the trade shows can still be held in Tokyo.
The Tokyo Metropolitan Government effectively owns Tokyo Big Sight and JEXA says the metro government has responsibility for building alternative venues.
The Tokyo Big Sight hosts about 300 exhibitions every year, with an annual economic impact estimated at about ¥6.5 trillion, according to operator Tokyo Big Sight Inc.
JEXA says there is no alternative to Tokyo Big Sight, which boasts the nation’s largest convention space at a total of 96,000-sq.-meters.
Chiba Prefecture’s Makuhari Messe, the nation’s second-largest convention center, is also scheduled to be used as an Olympic venue. And other convention centers, such as Pacifico Yokohama, are already fully booked, JEXA says.
Last February, the Tokyo Metropolitan Government announced it will build a 23,000-sq.-meter temporary exhibition center near Tokyo Big Sight to host trade shows when the two main halls at the convention center are unavailable in 2019.
And in November, it announced the temporary facility will continue to operate until November 2020.
It will also construct a new hall at the convention center, which is due to open by July 2019, though the hall will be closed for security reasons from April 2020 through the end of October that year.
However, JEXA Chairman Tadao Ishizumi said the temporary facilities would not be big enough, noting the 23,000-sq.-meter temporary exhibition center is only about a quarter of the size of Tokyo Big Sight.
“That means the number of exhibitors will also drop to a quarter and jobs at companies associated with the exhibitions will also decline,” he said at the association’s new year party last week.
“The ultimate victim will be Tokyo and the national government, because small and midsize companies, which would suffer the most from this issue, are the ones that underpin Japan’s economy.”
Ishizumi said no exhibition events were canceled during the past three Summer Olympics in Beijing, London and Rio de Janeiro.
Shigeki Yamaguchi, an official at the Tokyo Metropolitan Government’s industrial and labor bureau affairs division, said the Tokyo government is well aware of the potential damage, but since most of the land in the Tokyo Bay area is already earmarked for use during the Olympics there is no room to construct another temporary convention hall.
“We know that the current measures are not enough. But we have already tried our best to offer possible solutions,” Yamaguchi said.
Since the plan to use Tokyo Big Sight as a media center was announced in October 2015, the metropolitan government has told exhibition industries about the restrictions and asked them to change event schedules or downsize events to minimize financial losses, he said.
“In reality, it is difficult to completely eliminate the negative impacts on industries. What’s important is to minimize the effect as much as possible,” he said, adding that some companies can make up their losses with the expected economic boon of the Olympics.
Others say the partial closure of Tokyo Big Sight, which holds the biannual Comic Market, Japan’s most popular comic convention, could affect inbound tourism.
“The event has become very popular among foreign visitors, particularly from East Asia but also from Europe and the United States,” said Hajime Okada, president of Eikou Co., Ltd., a Hiroshima-based printing company of fan-published books sold at comic-cons.
“The Japanese economy is propped up by taxes from not only large companies but also small and midsize firms like us,” Suzuki of Sanko Tsusho said.
“I hope people pay closer attention to this issue as we are the ones who underpin the expenses of the Olympics.”