Business / Economy

Japan's transport and tourism sectors struggle to cope with virus outbreak

Kyodo

The COVID-19 outbreak is weighing down the transportation and tourism sectors as infection fears make people reluctant to venture outdoors or share confined spaces with others for long hours.

Passengers using the Tokaido bullet train line linking Tokyo and Osaka fell 8 percent between Feb. 1 and 19 compared with a year earlier, Central Japan Railway Co. (JR Central) said, adding that ridership on other express trains plunged 15 percent.

The pace of the drop was near the same as in May 2011, when the economy took a downturn in the aftermath of the March 11 triple disaster in Tohoku.

On Thursday, Prime Minister Shinzo Abe abruptly asked all elementary, junior high and high schools in the country to close from Monday until the end of spring break through early April.

The government has also called on organizers of large sporting and cultural events scheduled over the next two weeks to consider canceling or postponing them during what is seen as a critical time in the fight to contain the coronavirus outbreak.

With many Japanese firms urging employees to work from home and minimize contact with others, the tourism and entertainment industries are set to take further losses, analysts say.

Revenue at department stores and hotels run by the group companies of JR Central has fallen hand in hand with the decline in tourism.

“It is difficult to gauge the business outlook, given that it is uncertain when the virus outbreak will end,” JR Central President Shin Kaneko told a recent news conference.

As for the airline industry, Narita International Airport Corp. said Thursday that passengers who left for China between Feb. 1 and 22 had plummeted 66.5 percent to 42,400 compared with the same period a year before.

The spread of COVID-19 has meanwhile dealt a crushing blow to Japan’s hospitality industry because all group travel from China to other nations has been banned since late last month.

Tokyo Shoko Research said Tuesday that a long-established hot spring complex in Aichi Prefecture went bankrupt after cancellations from Chinese hurt its cash flow.

The bankruptcy marks the first business failure in Japan related to the virus, the credit research firm said.

According to the research firm, around 70 percent of the 12,348 Japanese companies surveyed in a poll answered that the outbreak has already affected or is expected to affect their corporate activities down the road.

In 2019, Japan received a record 31.88 million visitors. By country and region, China led with 9.59 million, up 14.5 percent from a year earlier.

“We’ve received cancellations not only from visitors from China, but also from Southeast Asia. With the trend of people avoiding crowds, the effects will likely drag on,” a representative from the Hokkaido Bus Association said.

According to a survey of its members, it found that about 1,700 buses chartered for trips between January and March had been canceled, resulting in losses equivalent to ¥110 million.

Hokkaido, with its multitude of ski resorts and scenic areas, is one of the most popular tourist destinations among wealthy Chinese.

Tokyo Disneyland and Tokyo DisneySea are closed from Saturday to March 15 in line with the government’s request, according to its parent. Universal Studios Japan in Osaka will also be closed during the same period.

Land, Infrastructure, Transport and Tourism Minister Kazuyoshi Akaba said at a news conference Friday that the Abe administration will step up measures to support companies stricken by the outbreak.

Japan’s economy, the third-biggest, shrank by an annualized real 6.3 percent in the October-December quarter, its sharpest slide in more than five years, as a consumption tax hike and damage from typhoons took their toll.

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