[Special Feature] The Revival of Tourism in the Post-COVID Era: Scenarios for Recovery and the Future in Hokkaido’s Tokachi Region

In mid-January, I spent a week in Florida, USA, to appear on a local TV program in Hokkaido and conduct an inspection of an integrated resort (IR). During that time, I learned of the first reports of the novel coronavirus through online news, which stated that “pneumonia of unknown origin had emerged and was spreading in Wuhan, China.” At the time, everyone viewed it as a problem far away, predicting that it would eventually subside, just like SARS and MERS. However, since late January, it has spread throughout Asia, including Japan, and is now plunging the entire world into fear. In Tokachi, two cases were confirmed between late February and late April. Although no new cases have been reported since then, the tourism industry has naturally suffered significant damage, just as it has across the country.

In this article, I would like to discuss the recovery from the novel coronavirus from the perspective of business owners operating hotels and restaurants in regional areas—that is, in areas smaller than government-designated cities—and outline the scenarios they are envisioning and the steps they are taking to move forward.

1. Initiatives from the Era When Tokachi’s Tourism Brand Was Weak to the Present

In 2008, the Japan Tourism Agency was established, and as regions across the country began competing to promote tourism, Tokachi—where primary industries centered on large-scale agriculture dominated—suffered from a strong perception that “while you can eat delicious food here, there are no places worth visiting specifically for sightseeing.” Consequently, it was not very popular as a destination within Hokkaido, often merely a stopover on the way to other destinations. Sensing a crisis in this situation, I realized that the gardens scattered throughout the region and the scenic roads connecting them could serve as tourism resources in their own right. The gardens were known for their unique designs, which made full use of Hokkaido’s distinctive climate, natural environment, and surrounding landscapes—features not found in other prefectures—attracting gardening enthusiasts and families seeking outdoor activities. We devised a strategy to link these gardens with the well-known Furano region, which lies between Asahikawa and Tokachi, transforming them from isolated points into a connected route. At the same time, to encourage wider regional exploration, we used Asahikawa Airport and Tokachi-Obihiro Airport as hubs, expanding the network from individual points to a line and then to a broader area. We created a model three-day, two-night itinerary and named it the “Hokkaido Garden Road.” This was in FY 2009. In the first FY, partly due to the impact of the Lehman Shock, travel trends favored “cheap, nearby, and short” trips. With a focus on raising local awareness, we poured our efforts into attracting and satisfying visitors from within a 250-kilometer radius who traveled by private car. Subsequently, awareness of the Hokkaido Garden Road grew, and within about three years, the number of tourists increased from 350,000 to 550,000. As intended, this had a positive economic impact not only on the garden facilities but also on the entire area, including hotels, inns, and restaurants.

Then, last year, interest grew further as Tokachi served as a filming location for the NHK morning drama “Natsuzora.”Additionally, thanks to a stable economy, the first half of FY 2019 (April–September) saw a 16.1% increase in total visitors from outside Hokkaido to approximately 2.06 million, with overnight guests rising 13.1% to 1.04 million, maintaining strong performance. Past data indicated that the area would become even more bustling in the drama’s second year due to the large number of viewers, so expectations were high for this year as well; however, the current COVID-19 crisis has dealt a severe blow.

2. Two New Management Approaches Since Becoming Hotel President and Their Application During the COVID-19 Crisis

I took over the management of Hokkaido Hotel in March 2017. Over the past three years, I have placed particular emphasis on two key areas. The first is “Whiteboard Management,” a method of corporate management and human resource development specifically tailored to the hospitality industry, which I developed independently. Specifically, it is a methodology designed to facilitate the development of individuals and teams, solve problems through issue identification and project management, formulate strategies for setting and achieving goals from the perspectives of marketing and innovation, and ensure smooth decision-making and communication. By ensuring the entire company understands these principles, problems that arise on the front lines can be quickly shared within teams, enabling more precise decision-making within departments and leading to smooth resolutions.

The second initiative focused on improving cash flow and productivity. This required involving not just a select few executives, but a much larger number of employees. Until then, store managers and department heads had primarily focused on customer service and rarely had the opportunity to analyze financial statements or identify issues from a strategic perspective. By holding regular study sessions where employees learned, discussed, and improved upon which “products, time, and services” within their departments were underperforming or excelling, we were able to significantly improve cash flow.

In both cases, we utilized our internal social networking platform, enabling staff to share accurate information and make quick decisions on their own. I consider this a tremendous evolution. Even during the current COVID-19 crisis, I feel that each department is taking appropriate actions while balancing productivity and customer satisfaction.

Furthermore, amid this crisis, I’ve been reflecting on a phrase often repeated by my father, Mitsushige Hayashi, the company’s chairman. It comes from Otto von Bismarck, the German Chancellor known as the “Iron Chancellor”: “Fools learn from experience; wise men learn from history. ”I was a student during the bubble economy and its collapse, and during the Lehman Shock, my work was primarily on the front lines, so I realized I lacked both managerial experience and the wisdom gained from history. Taking this as a lesson, I decided to reach out via social media to individuals who have firsthand knowledge of such economic crises.

3. Addressing the Immediate Crisis... The Recovery Scenario is “Outside, Near, Simple”

When COVID-19 infections began to spread and people’s movements started to decrease, one of the sources I referred to for assessing social and market trends was Hideto Fujino, President and CEO of Leos Capital Works Co., Ltd. I met Mr. Fujino two years ago at a study group on innovation organized by Obihiro City and local banks.

On February 25, as the Nikkei Stock Average began to fall, Mr. Fujino posted on social media: “For now, self-employed individuals should refrain from renovations or investments—except for what is absolutely necessary—and hold onto their cash.(...) You should take steps to manage your cash flow. People in rural areas probably don’t fully grasp the situation yet, but cash flow management is crucial.” I immediately held a meeting with the General Affairs Manager, negotiated with our main bank, and simultaneously reviewed our cash flow projections for the next year to ensure that even if sales plummeted, it would not affect payments such as salaries. Three days later, a state of emergency was declared in Hokkaido ahead of the rest of the country, and it became clear to those around us that the situation was becoming more serious.

At the same time, assuming that the COVID-19 outbreak would subside specifically around mid- to late August, we mapped out a scenario for the recovery of domestic travel. We anticipated that the economic climate at the time of the outbreak’s end would be significantly depressed due to the prolonged state of emergency. Therefore, we took inspiration from a term frequently used during the 2008 Lehman Shock and financial crisis: “Yasukinchotan” (cheap, nearby, short-stay leisure).We predicted that things would really start moving from Silver Week in September and envisioned that “Outdoors, Nearby, and Short-term” would become the key themes for tourism. Avoiding the “Three Cs” (closed spaces, crowded places, and close-contact settings), the focus would be on outdoor activities and experiences that can be enjoyed outdoors, such as visiting gardens, viewing autumn foliage, and camping. We believe there will be an increase in travel opportunities where groups of 2 to 4 people—such as families or couples—stay at hotels or ryokans with hot springs in relatively nearby areas rather than traveling far, and make stops by car at roadside stations and other locations. Therefore, for the time being, we must focus on “creating a system to attract visitors from within a radius of about 250 km.” We aim to turn visitors into loyal fans through hospitality that emphasizes building lasting connections. Building on that, we believe we must implement further initiatives to inspire guests to support the region and return in the future.

On the other hand, it is said that the revival of inbound tourism—which has driven Japan’s tourism economy over the past few years—will take at least one and a half to two years. In Tokachi, inbound tourists accounted for approximately 8% of the 2.37 million total overnight stays in FY 2018, a lower ratio than in other major tourist areas within Hokkaido. This is due to the fact that economic activities centered on primary industries, such as agriculture, were prioritized, leading to a delayed start in inbound tourism efforts. Consequently, the region has leveraged its natural environment—including its cuisine, gardens, and hot springs—to attract a well-balanced mix of travelers from the local area, within Hokkaido, across Japan, and from overseas. As a result, even after the outbreak of COVID-19, the average occupancy rate for 10 hotels in Obihiro City in April remained firm at just under 40%. However, this does not mean we are downplaying the importance of inbound tourism. We believe it is necessary to rebuild a four-pillar strategy that simultaneously targets the local area, Hokkaido, the rest of Japan, and inbound tourists.

4. Amid a sharp decline in travelers, the region must unite to launch new initiatives

Recently, there has been much discussion about the “new normal” following the end of the COVID-19 pandemic. However, we also believe that travelers’ values and behaviors will fundamentally change. We believe two key themes will emerge: first, “caution regarding using public transportation to travel to overseas destinations or crowded urban areas,” and second, “a desire for the liberating sense of healing and immediate, health-promoting activities found in rural areas.”

Therefore, despite the state of emergency, five hotels featuring hot springs and saunas joined forces to launch the Tokachi Sauna Council on April 16. The catalyst was a sauna tour of Finland we participated in last year. We were convinced of the potential for sauna tourism, as Tokachi shares very similar natural landscapes and cuisine with Finland. Unlike traditional dry saunas with temperatures exceeding 100 degrees Celsius, Finnish-style saunas are humid and do not feel suffocating, making them comfortable and accessible. The media frequently highlights how they promote not only physical health and beauty but also mental relaxation.

With an eye toward the end of the COVID-19 pandemic, the council is working on regional collaborations to issue a “Sauna Passport” that allows travelers to visit facilities at reasonable prices, as well as developing “Sauna Meals” featuring Tokachi’s delicious local ingredients to enjoy after a sauna session. Additionally, they are pursuing unique initiatives such as partnering with local hospitals to launch “Sauna Checkups” (a play on the term “comprehensive health checkup”), where participants receive medical examinations before and after the sauna and gain various health-related advice from doctors.

There are reports that the government plans to launch large-scale promotional campaigns as part of its post-COVID-19 measures. In the past, reconstruction support discounts were offered in disaster-stricken areas following natural disasters, but since this time the entire country is the target, Tokachi must be selected from among numerous competitors. To achieve this, tourism stakeholders must first collaborate to refine the region’s beloved resources into an attractive destination. Furthermore, these initiatives must be new and groundbreaking—the kind that the media will want to cover—and now is the time to build them within the region.

5. How should local communities and businesses address risks such as natural disasters in the future?

Last August, I had the opportunity to give a lecture on businesses that bridge the environment and tourism to a group of about 20 Chinese entrepreneurs visiting Tokachi. The theme was “Sustainable Environmental Perspectives and Sound Economic Growth,” and the lecture was well-received, with many questions following. Later, in mid-April, after the novel coronavirus situation had stabilized in China, I received a request for an online lecture. Their primary interest was: Why is Hokkaido able to recover so quickly from natural disasters and see its tourism sector bounce back so swiftly?

Natural disasters in Hokkaido can be broadly categorized into four types: earthquakes, volcanic eruptions, typhoons, and snow-related disasters. However, it is precisely because of these phenomena that we can experience hot springs, lakes, an endless supply of clean water, lush forests, snow-based events, and a mysteriously beautiful natural environment. I explained in my lecture that natural disasters and their benefits are two sides of the same coin, and that failing to respect nature will only lead to greater damage. If the current novel coronavirus crisis is considered an environmental factor, he argued that risks can be reduced by people trusting one another more and adopting lifestyles and economic activities that are environmentally conscious.

Finally

Are you familiar with a “whiteout”? It is a phenomenon where heavy snow and strong winds turn the entire view white, making it impossible to distinguish directions or landmarks. I experienced this while traveling from Tokachi to Sapporo. If I stopped the car out of fear, I risked being rear-ended; if there was an accident ahead, I risked rear-ending it. With no other option, I had no choice but to drive slowly while constantly checking all directions. Even in such a situation, when I could make out passing headlights or the red taillights of a car ahead, I felt a momentary sense of relief.

My current state of mind is exactly like being in a whiteout. What does “convergence” mean for me in these circumstances? I think it means having many customers use our services again, just as we did a few months ago, and reconnecting with trusted colleagues and business partners. So, what is that ray of hope? I suppose it’s the ability to return to our previous daily routines, but I believe that is no longer possible. My friends and acquaintances in the IT and consulting industries, who are adapting to change, are already driving a transformation in their work everywhere—using Zoom, Skype, and other online tools for sales, meetings, social gatherings, lectures, learning, and remote work. I believe the true ray of hope for the tourism industry in regional areas lies in proactively reforming our mindset and putting it into practice to create a new normal—even if it takes time—while keeping a close eye on what’s happening all around us.