Features

Japan's Comeback

29 Feb 2012

One year on from the catastrophe that shook Japan to the core, it’s business as usual in Tokyo, writes Gavin Blair

As Japan marks the first anniversary of its worst disaster since World War II, and as the devastated Tohoku (northeast) coastline faces a long road to recovery, it’s been back to business as usual in Tokyo. While nobody in Japan will ever forget the events triggered by the enormous earthquake at 2.46pm on Friday March 11, 2011, evidence of the triple disasters is hard to perceive in the nation’s capital.

Although hundreds of kilometres away from the earthquake’s epicentre, Tokyo was shaken like never before when a 400-kilometre-long and 160-kilometre wide slab of the Pacific tectonic plate suddenly slipped under the plate that Japan sits on. This violent upheaval moved Japan 2.5 metres eastward, knocked the earth slightly off its axis and even fractionally shortened the length of a day. It also set off a tsunami that was to batter an 800-kilometre stretch of coastline, reach heights of 40 metres, kill nearly 20,000 people and trigger a nuclear crisis.

While Tokyo was never the ghost town portrayed in sections of the Western media in the weeks following the disaster, the atmosphere was certainly sombre. Restaurants, bars, cinemas and hotels were quiet as the mood of  jishuku or self-restraint meant that nobody wanted to be seen enjoying themselves too much while others suffered. Added to this was the threat of power cuts as Tokyo struggled to save electricity with nuclear power plants offline. Manufacturers across the country were also hard hit, including Japan’s global electronics and automobile firms, as supply chains were disrupted due to the damage to factories and infrastructure in Tohoku. 

Tokyo buzzing again

In the ensuing months, however, Tokyoites returned to the city’s 160,000 eateries and overseas travellers began to trickle back into the megalopolis. By the end of the summer, with fears easing about a doomsday scenario at Fukushima, the capital was buzzing again, its neon lights shining bright once more as electricity shortages were forgotten.

Come the autumn, many of the international artists who had cancelled shows in the aftermath of the disaster were rescheduling performances. In the last week of October the Tokyo International Film Festival opened after organisers had agonised in the weeks after the disaster over whether to hold the annual event.

“Before opening the submissions, I didn’t really know what would happen; we thought maybe nobody at all would submit their film this year,” said Yoshi Yatabe, programming director at the festival.

In the end, the festival had no reason to worry, attracting nearly 1,000 hopeful films, almost 200 more than the previous year, according to Yatabe. “Japan and Tokyo were all over the news throughout the year, and in people’s minds. I’m sure it had an effect.” A week after the festival, in November, Brad Pitt made a point of bringing his wife Angelina Jolie, and all six children, to the Tokyo premiere of Moneyball as a show of support to Japan.

Business recovery

Both domestic firms and overseas companies operating in Japan were affected by the post-disaster situation, with some of the latter electing to evacuate personnel from Tokyo due to fears about radiation. Lend Lease Japan, the local operation of an Australian-headquartered construction and project management firm, didn’t have the option of evacuating. It was tasked with overseeing the vital restoration of Softbank’s 3G mobile network in Tohoku, which it had helped install. Japan CEO, Andrew Gauci, was in the disaster area by March 13, two days after the earthquake, hitching a ride with the Australian Embassy team, who used Lend Lease’s Sendai office, along with missions from the Canadian and New Zealand embassies, as a base from which to search for missing nationals of their respective countries.

“We had 70 people in our branch office in Sendai [the biggest city hit by the tsunami] and thankfully they and their families were all safe,” recalled Gauci. “We’re still there in Tohoku and it’s important to be supporting the economy by being committed to the region for the long term.

“What happened impacted us but everyone pulled together and our business operations are fully back to normal,” he continued. “If there’s any impact at all in Tokyo, it has been on the high-end real-estate market due to some foreigners leaving. We have done some work in that sector and it is quiet at the very top end. There are probably some good deals on rents available out there for foreign firms bringing expats into the country.”

The disasters also refocused companies in every sector on their BCPs (business continuity plans), which were put to the test even in Tokyo when transport and telecommunication systems were almost paralysed in the first 12 hours after the earthquake. Lessons had been learned after previous disasters, and many more will be learned from the events of March 11.

“After the earthquake in Kobe in 1995, it took 80 days to resume services on the bullet train. But this time, after what was a much more powerful and damaging disaster, the bullet train to Tohoku was running again in little over half that time,” explained Tadashi Saito, director of the Political and Social Affairs Bureau at Keidanren, the largest Japanese business federation.

Hotel revival

Luxury hotels in Tokyo saw their occupancy rates dive into the low teens in the immediate aftermath of the disasters, with foreign tourists and business travellers particularly notable by their absence. The Peninsula Tokyo, in the central Yurakucho district, normally attracts 60 per cent of its guests from overseas, with around the same percentage of all customers being business travellers.

“There were almost no foreigners in the hotel for the first three or four months,” recalled Mark Kobayashi, regional director of communications for Japan. “Business travel has now recovered completely and the Asian tourist segment is almost back to normal. It’s taking a little longer for the long-haul, high-end tourist market from Europe and the US to return.”

Chinese New Year was a very good period for the hotel, according to Kobayashi, with guests from the mainland coming in large numbers. The hotel was offering heavily discounted rooms in the months after the earthquake but business, and rates, are now pretty much back to normal.

Across town at The Ritz-Carlton Tokyo in the Midtown complex, with a higher domestic and leisure clientele base, it had been able to avoid discounting rooms throughout the post-disaster period and was back to business as usual by last summer, according to a spokesperson from the hotel.  

Food and safety

While some in Japan have concerns about food safety following the crisis at the Fukushima Dai-Ichi nuclear plant, The Peninsula’s Kobayashi reported that their domestic guests had requested that a disaster charity event there should serve only products from Tohoku as a show of solidarity with the devastated region.

The government has banned the sale of foodstuffs found to have above-stipulated limits of radiation, but the issue remains controversial. Anti-nuclear campaigners have pointed out that the Japanese safe levels are much higher than those that were established in the Ukraine and Belarus after the Chernobyl accident. Others, including some eminent scientists, have suggested that what was proved by Chernobyl was how little effect low doses of radiation have on humans.

Wade Allison, emeritus professor of physics at Oxford University, argued at a press conference in Tokyo last year that far higher levels of radiation in food than those currently enforced in Japan would have no consequences for human health. He went on to state his belief that crops were being unnecessarily destroyed and animals needlessly slaughtered because of irrational fears of radiation. The biggest threat to human health of the Fukushima accident, according to Professor Allison, was the stress caused by fear-mongering.

Japan Inc outbound

Despite the strong rebound in the capital, Japanese business was inevitably hurt by the disasters. To add insult to injury, a strong yen, further supply chain disruption due to the Thai floods and global economic uncertainty all gave Japan’s manufacturers a battering last year. The major electronics firms are forecasting combined losses of US$17 billion dollars for the financial year to March, with Panasonic alone predicting an eye-watering US$10 billion of red ink.

With a slowly shrinking – and rapidly ageing – population, Japanese firms can no longer rely on a once-lucrative domestic market to maintain profitability. Manufacturing is being moved to lower-cost countries with weaker currencies, while Japanese firms are on an overseas takeover spree that dwarfs what was seen at the height of the Bubble Economy. Taking advantage of the strong yen that is hurting export competitiveness, Japanese companies bought no fewer than 642 of their global counterparts last year, even while dealing with the aftermath of the disaster back home. The more than ¥5.5 trillion (US$70.9 billion) they spent doing so was second only to the ¥7 trillion (US$90 billion) they shelled out on foreign acquisitions in 2008.

So, while the TVs, cars and heavy machinery may be increasingly manufactured all round the globe in the years ahead, the money will be flowing back to Tokyo for some time to come. 

The aftermath

Twelve months after the beginning of the world’s worst nuclear accident since Chernobyl, and recriminations continue over who knew what and when, as well as what should have been made public. Trust in both the government and the operator of Fukushima Da-Ichi, Tokyo Electric Power Co (TEPCO), was severely damaged.

Immediately after the earthquake, Prime Minister Naoto Kan gathered a team of advisers in a fifth-floor office of his official residence as an emergency response team. This then became the main body responsible for decisions on the unfolding nuclear crisis at Fukushima. However, in the basement of the same building another task force had formed according to a special law on nuclear accidents. The two groups were apparently not even fully aware of each other’s existence, meaning crucial information was not shared.

In January, it emerged that a worst-case scenario report on the nuclear accident produced two weeks after the incident was never released because it was deemed so unlikely to become reality. The report admitted that the evacuation of the greater Tokyo area, with over 40 million in population, was a possibility if control of the nuclear power plant was lost completely. Although the need to avoid the danger of panic over what was an improbable scenario was undoubtedly a concern, many people feel the right to know should have outweighed all other considerations.

What hoteliers see for the future

“Japan is still experiencing the effects of Fukushima’s nuclear power plant incident in regard to inbound leisure travellers. The numbers for business travellers are nearly back to normal. Tokyo will always be a must city where business needs to be done. If anything, we are seeing new business segments coming to Tokyo that didn’t necessarily come in years past. For example, construction or businesses related to the rebuilding of the Tohoku region.”

Mark Kobayashi, regional director of communications, Japan, The Peninsula Hotels 

“After the March 11 earthquake, both Government and corporate enterprises continue to invest heavily in the infrastructure reconstruction in the Tohoku region to stimulate a full recovery. As a result Japan is spearheading initiatives to expand environmental sustainability initiatives and development of alternative energy resources, which will enable the country to carry out further improvements and emerge as a stronger nation.”

Christian Hassing, director and general manager, Mandarin Oriental Tokyo

“The March 11 disaster undoubtedly affected the hospitality sector. That said, it also demonstrated the proven resilience and strength of the Japanese people as well as the solidarity and cooperation within the travel and hospitality community, supported by the government, to drive tourism back to Japan.”

Oded Lifschitz, vice-president international operations, Japan, Korea & Micronesia for Hilton Worldwide

 

Loading comments...

Search Flight

See a whole year of Reward Seat Availability on one page at SeatSpy.com

Business Traveller March 2024 edition
Business Traveller March 2024 edition
Be up-to-date
Magazine Subscription
To see our latest subscription offers for Business Traveller editions worldwide, click on the Subscribe & Save link below
Polls