Business travel by Americans to Japan has largely dried up in the wake of the earthquake, tsunami and nuclear reactor crisis there, and industry experts do not expect it to bounce back until the nuclear problems have been solved.
Corporate-related travel to Japan has plummeted 80 percent since the earthquake, estimates Andrew W. Menkes, chief executive of Partnership Travel Consulting, a Princeton, N.J.-based firm that helps companies manage their travel and entertainment expenses. Business travelers have canceled their trips, he said, “because of potential exposure to radiation, challenges with the transportation and ground infrastructure, and lack of hotel space.”
The extent of the falloff in U.S. business travel to Japan is evident in travel management companies’ future booking data; business travel bookings are often made close to the date of departure.
The North American division of Carlson Wagonlit Travel said Friday that for the week of March 28, there were 52 percent fewer travelers scheduled to travel to or from Tokyo than had been booked in the same week in February.
Similarly, Michael Steiner, executive vice president of Ovation Travel Group, a New York-based travel management company, said that before the earthquake struck, Ovation had booked Japan trips for 3,000 travelers through the end of March; as of Friday, all but a “handful” of these had been canceled, he said.
Getting out of Japan
Once the earthquake struck March 11 and the severity of the nuclear crisis became apparent, travel management companies and businesses with employees traveling in Japan worked feverishly to help travelers get out. More recently, those companies have even been enlisted to help expatriate Americans based in Japan and Japanese citizens relocate temporarily to other Asian nations and the United States.
Business travelers in Japan at the time the earthquake hit had widely differing experiences as they tried to leave the country.
Ko Makabe, a Japanese-born, New York-based architect with Kohn Pederson Fox Associates, was in a meeting in a Tokyo office building when the quake struck. “Living in Japan, you’re used to having an earthquake at least one time a month. But this was bigger than anything I’ve experienced in my life,” he said.
Scheduled to leave Tokyo on the morning of March 13, and concerned about traffic jams en route to Narita International Airport, Makabe left his hotel at 6 a.m. and arrived at the airport in one hour. His Japan Airlines flight, which left only 30 minutes late, was “packed,” he said.
Michelle Hunt, who oversees business travel taken by DHL employees in North and South America, said DHL — a Carlson Wagonlit Travel client — had five Americans on a two-week tour of Asia in Japan on the day of the quake. Three flew out a few hours before the earthquake, while two left on March 12, with no difficulty, on commercial flights.
'Not a transmission problem' Gary S. Moriwaki, a partner at Fox Rothschild, a New York law firm, was not as lucky. He was in Tokyo with a business delegation parked in a bus outside the New Otani Hotel when the earthquake struck. “A hoard of people poured out of the hotel, and the bus started to buck. I’d never been in an earthquake before. But I figured out it was an earthquake, and not a transmission problem,” he said.
Originally scheduled to fly out of Tokyo late morning on March 12, Moriwaki left his hotel at 7:45 a.m. He spent the entire day at Narita waiting for his All Nippon Airways flight, whose aircraft never arrived, returned to Tokyo that night, and finally flew back to New York on ANA two days later.
For the time being, industry executives say only “mission-critical” business travel to Japan — trips taken for security, humanitarian or infrastructure purposes — will take place. One example of such travel was a trip booked after the earthquake by David Odaka, president of Los Angeles-based All Star Travel Group, for the chief executive of a real estate company, who took a 48-hour journey to Tokyo to check out the company's assets there.
“I don’t see business travel returning to normal in the near future,” Odaka said. “People who have to go will go, but any postponable business will be postponed until everyone really knows what is going on with the nuclear plant situation.”
Risk levels change daily
Although DHL has seven employees scheduled to go to Japan in the next two weeks, Hunt does not know if they will travel. “The question is if their trips are business-critical. And the risk level continues to change on a day-to-day basis,” she said.
Makabe has postponed a trip to Japan he was supposed to take the week of March 28, in part, he said, because his clients “thought it was not a good time to invite people to Japan.” Although the trip is now rescheduled for April, he said it could be further postponed until May if conditions in Japan don’t improve.
This past week, Susan J. Onuma, co-chair of the Asia practice group of Kelley Drye & Warren, a New York-based law firm, twice postponed a two-week trip to Japan from early to late April, and then to early May. “With companies and residents of Tokyo moving out of Tokyo and reports of passengers arriving from Japan setting off radiation detectors at U.S. airports, my spring trip may be pushed out even further,” she said.
Industry officials say executives still going to Japan and even other parts of Asia might be changing their travel plans — voluntarily or involuntarily — because of the earthquake and its effects.
Sara Deckett, director of account management for Egencia, the corporate travel arm of Expedia, said some passengers of Japan Airlines, All Nippon Airways, United Airlines and Delta Air Lines who ordinarily use Narita as a hub to connect to other flights within Asia are opting to bypass the airport entirely, instead flying on other airlines with hubs elsewhere in Asia.
Packed flights, full hotels
She also said hotels in Hong Kong and Bangkok are filling up with Japan-based expatriate business executives and Japanese citizens who have temporarily relocated, which she predicted “will make hotel prices in those cities go up, and impact anyone who wants to do business there. Flights leaving Tokyo are getting very full. You may not get on a flight you want, or leave as quickly as you want.”
Deckett, Steiner and Odaka also said their companies have been asked to help Japanese and non-Japanese residents of Japan temporarily relocate, to places like Hong Kong, Taipei, Singapore, Hawaii and Los Angeles. A request for such help is “unusual” for Ovation Travel Group, but not unexpected, according to Steiner, who said “as the threat of radiation has continued, people are getting more nervous about the situation and are moving further away, to be able to conduct business for a longer period of time if the impact gets worse.”
No one knows when business travel to Japan will return to pre-earthquake levels, but Atsushi Narita, vice president of the New York office of IACE Travel, a global travel agency that specializes in the Japanese market, is hopeful it will bounce back soon.
“It’s very similar to the Lehman shock in 2008, when our clients ceased travel,” Narita said, referring to the steep decline in business travel after the failure of Lehman Brothers. “But travel slowly came back and the economy revived. But I don’t think it will be very long like the last time.
“I’m pretty optimistic. This is not the whole world in crisis like the last time,” he said, adding he expects travel will rebound once “the government resolves the nuclear plant issue.”