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Nagoya Railroad's vision for regional tourism and growth

Interview - January 16, 2024

The president of Nagoya Railroad discusses the potential of the Chūbu region as a tourism destination, strategies for attracting diverse tourists, and the impact of the upcoming Maglev Chūō Shinkansen on regional tourism. The interview also touches on the company's role in urban development and its plans for the future as it approaches its 130th anniversary.

HIROKI TAKASAKI, REPRESENTATIVE DIRECTOR & PRESIDENT OF NAGOYA RAILROAD CO., LTD.
HIROKI TAKASAKI | REPRESENTATIVE DIRECTOR & PRESIDENT OF NAGOYA RAILROAD CO., LTD.

In 2019, overseas arrivals to Japan saw a record high of 31.8 million. Even though this dropped to 250,000 due to COVID-19, Japan still ranked number one in the World Economic Forum's Travel and Tourism Development Index. To add to that, the government also maintains a target to welcome 60 million visitors annually by the year 2030. Furthermore, the first half of this year has already seen 10 million visitors welcomed into the country. As one of the 16 major private railway companies in the country, what makes Japan a prime tourism destination?

Before the COVID-19 pandemic, Japan welcomed 30 million visitors. However, inbound tourism came to a halt after COVID. Fortunately, we are now seeing a gradual return to pre-COVID conditions. However, the Chubu region differs slightly from other areas in that it receives more visitors from China. We believe that if this pace continues, we can achieve the goal of attracting 60 million visitors by 2030.

 

Is there a reason why more Chinese tourists like to come to the Chūbu region than any other foreign tourists?

The reason why the Chūbu region sees a higher influx of Chinese tourists compared to other foreign visitors is primarily due to the fact that 40% of the international flights at Chūbu International Airport are connected to China. If the airport had more international flights from different countries, we could broaden the region's appeal to a wider array of travellers.

 

Prior to COVID, tourists from China, South Korea, Taiwan and Hong Kong accounted for 70% of Japan's total visitors. When we spoke to the President of Nishitetsu, Mr. Hayashida, he stressed the importance of diversifying Japan's tourism base by attracting visitors from Western nations like the United States and Australia, as they are more likely to spend more time and money within the country. Do you agree that diversification of the tourism base is important post-COVID? How is Meitetsu attracting Western tourists?

I agree with Mr. Hayashida’s perspective on the diversification of our tourism base. Western visitors have shown a strong interest in experiencing and understanding Japanese culture compared to tourists from Asian regions, and there is a high demand for it. They also seek high-quality, value-added experiences and services, leading to a higher unit price. Our efforts are focused on expanding the customer base that seeks such high-quality experiences in Japan.

 

Even though the Japanese golden route of Tokyo, Kyoto and Osaka passes directly through Nagoya and the Chūbu region, many rarely explore them. Due to the city's history as a manufacturing hub, Nagoya is unfortunately labeled as a boring city. Your 444-kilometer railway network forms a key part of the Nagoya metro region and connects areas like central Nagoya, Gifu and Inuyama. Why do you believe tourists should visit the Nagoya metropolitan region, and how are you combating this stigma of Nagoya being a boring city?

Situated at the heart of the Golden Route, the Nagoya area has been less appealing to tourists in the past, partly due to its strong focus on manufacturing. Consequently, our attention toward tourism, including by local municipalities, has been relatively slow to develop. However, we possess abundant tourism resources in terms of nature, history and culture. By enhancing these assets, we can truly captivate tourists and transform our city into an attractive tourism destination. I am sure that we can turn this area into something like that, and we are committed to taking the lead in this endeavor.

The Chūbu region has an immense tourism potential. One notable attraction is our mountain tours, particularly within the Japanese Alps. While Mount Fuji, a world-famous landmark and Japan's tallest peak, is often admired from a distance, the mountains located in the Chubu area hold great value in attracting visitors and providing the best experiences. While France has great rural landscapes, Japan’s yamazatos(mountain villages) are frequently praised as among the best globally.

The Chūbu region is known for its picturesque mountain villages such as the old post towns of Shirakawa-go, Magome, and Tsumago, which draw many Western visitors. Furthermore, Nagoya itself is surrounded by numerous unique smaller cities like Inuyama, Gifu, Okazaki and Handa. These hidden gems require more polishing to shine brightly and attract tourists, a mission we are dedicated to accomplishing.



You offer bus services to the wider Chūbu region, including Shirakawa-go, Takayama and Gero Onsen, and you also offer a series of bus passes known as the Shoryudo Pass. As someone who is passionate about promoting the Chūbu region, which regions would you say are your personal favourite to go to? What would you personally recommend to tourists?

I would highly recommend exploring our mountains, with a special mention of the Shinhotaka Ropeway, which is a part of the Japanese Alps. This remarkable attraction allows you to ascend to an impressive elevation of 2,156 meters, The journey to the Shinhotaka Ropeway takes about an hour from Takayama and is approximately a three-hour drive from Nagoya. One of our group companies operates the Ropeway. It is open year-round. This facility is located within a national park, and the on clear winter days offer the most stunning clear-sky landscapes.

 

How many times do you go there in a year?

I love the place and have been over 30 times so far.



In 2019, despite achieving record tourism numbers, there was a significant imbalance, with approximately 47% of tourists flocking to Tokyo, while many Japanese prefectures received less than 1% of these visitors. The government has said that tourism is key to revitalizing these local economies that have been withered due to Japan's demographic decline. In your opinion, what else can be done to promote regional tourism and get more people to visit these regions?

As I mentioned, there are numerous unique small cities in the Nagoya region. However, individually promoting each of these cities would only represent one of the many tourist destinations in Japan. Therefore, we are pursuing a strategy of promoting the entire area as a unified destination with special features. We refer to this collaboration between the cities as "Co-Machi"(which combines the words "Cooperation" and "Machi “ meaning town in Japanese), .  and this signifies collaboration and matching. The Meitetsu Group plays a core role in organizing this council.

 

Besides your bus and transportation services, you also have a real estate business where you develop commercial facilities at and between stations like μPLAT and your other major commercial facilities. In addition, you have hotels, like the Meitetsu Inn and Meitetsu Grand Hotel. Can you elaborate more on the synergies you were able to generate between your different businesses, and what unique experiences have you been able to offer to tourists as a result of those synergies?

The Meitetsu Group is a  corporate group at the forefront of community and city development, achieved by integrating the transport, real estate and tourism industries. What sets Japan's private railway companies apart is their unique ability to engage in local community development holistically, including transportation, real estate, tourism and commercial development. Furthermore, while private railway companies in Tokyo and Kansai  focus on specific parts of their respective regions, we have a broader reach, covering the entire Chūbu region. We believe this is something very rare even on a global scale. The development of the region and our company are truly intertwined.

 

A significant development of great importance to the Chūbu region is the opening of the revolutionary Maglev Chūō Shinkansen, scheduled to begin operations in 2027. Once operational, this remarkable transportation system is expected to connect two major metropolitan areas, Nagoya and Tokyo, in just 40 minutes. Additionally, the estimated travel time for the Osaka extension is approximately 27 minutes. As a result, this will form a super region of roughly 66 million people across Japan's three major metropolitan regions. What impact do you think the Chūō Shinkansen will have on tourism within the Chūbu region, and by extension, what impact will it have on Meitetsu?

The opening of the Maglev train between Tokyo, Nagoya and Osaka will create a dynamic economic region, often referred to as a super-mega region, with Nagoya positioned at its core. This interconnected area will encompass a population reachable within a 120-minute travel radius. In terms of the population within this 120-minute travel zone, Nagoya is expected to surpass Tokyo (Shinagawa). The Chūbu area, with Nagoya at its center, is expected to experience substantial growth. As a key part of this transformation, our aim is to redevelop the Nagoya Station area, a significant project that will reshape Nagoya's urban landscape. To attract a diverse range of talents, especially those in creative fields, we are devising various strategies aimed at making Nagoya an appealing destination.

As part of our redevelopment plans for Nagoya Station, we are considering attracting a  new luxury hotel. The specific details have not yet been determined, but it is highly possible that the hotel will carry a foreign-owned brand.

 

The key themes of your midterm plans are the structural reform of your transportation business in addition to the tour bus and hotel businesses as a way of transitioning to a post-COVID world. How would you reflect on your midterm plan? Do you believe it has been a success?

The transportation, tourism and leisure sectors were severely impacted by the COVID-19 pandemic. Through structural reforms, we managed to improve our profitability. However, we also encountered rising costs related to fuel and materials, which somewhat offset our profitability gains. In line with our midterm plan, we implemented reforms across our group, not limited to transportation, tourism and leisure, but also across various other business sectors, in response to the ongoing COVID situation.

While it appears that we may not achieve the numeric profit target as per current projections, I believe that by promoting these reforms, we have been able to lay a strong foundation for our future growth. One significant change is in our real estate business, which underwent restructuring, resulting in the formation of a new company that places strong emphasis on urban development. Our long-term strategy involves using this new urban development industry as a pillar for our growth. Since we take the lead in the creation and development of communities and cities across the entire Chūbu region, we aim to focus on urban development and expand from there.

 

As you approach your 130th anniversary in 2024, what are your main goals and objectives that you would like to accomplish for the Meitetsu Group?

We are planning to unveil our amazing Nagoya development plan in 2024. When people think of the Kanto region, they often focus on Tokyo. In the Kansai region, there are four major cities that come to mind: Kyoto, Osaka, Nara and Kobe. As for the Chubu area,  Nagoya is the central city, surrounded by a wealth of smaller cities, each possessing unique and appealing qualities. Our objective is to enhance and refine these attributes to make them even more attractive. We are actively working towards showcasing the wonderful gems of redevelopment in the center of Nagoya and the development of surrounding cities. We promise to create a city that satisfies everyone who visits Nagoya in the future, so please look forward to it.


Interview conducted by Karune Walker & Sasha Lauture

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