What's With All The Japanese Tourists?
By Tom Dyson
August 13, 2007
"My head wants to explode," said my friend. He was lying on a rock, pouring water into his mouth, trying to breathe at the same time. "Are we almost at the top yet?"
We'd just biked up a hill that was so long and tall, we were now above the tree line. Snow lay by the roadside, and a glacier stood beside to us. The glacier was so close we could stop our bikes and walk on the ice if we had wanted. My friend was suffering from the altitude. I felt dizzy, too...
But there was still no end to the climb in sight...
Last week, I flew to western Canada to tour the Athabasca oil sands. After the tour, I met up with a friend. We bought bicycles and peddled them along Canada's most famous highway – The Ice Fields Parkway. It runs 200 miles between Jasper and Banff, Alberta. Both towns are high-altitude ski resorts in the Canadian Rockies, so the road is scenic but incredibly hilly. It took us four days to cover to whole route.
We got back on the bikes and started grinding up the hill again. We were both in the lowest gears possible. This hill was so steep, even the motorcycles struggled to pass us. Eventually a road sign appeared in the distance. "Glacier Lookout – 1 km" it said. That's the top of the mountain... the beginning of the long ride back down hill. The sign promises hot food. We step up the pace...
The lodge sat halfway up the hill, around a steep bend. I expected a country grocery store with a family dining room attached to one side... or something rural like that. But when I came around the corner, I found a Disney-sized parking lot and 30 busloads of Japanese tourists... streaming up the steps to the restaurant.
"We could be in Japan right now," said my friend. "What's with all the Japanese tourists?"
It's true. The Japanese tourists in that remote mountain lodge could have filled a small sports stadium. And we found more Japanese tourists at every stop. The towns of Banff and Lake Louise were crawling with Japanese tourists. So were all the stops along the highway.
"The Japanese have discovered northern Canada now, too," said an airline employee I chatted to at Edmonton's International Airport. "They fly up to the Arctic Circle and watch the Northern Lights."
I asked her about ticket prices. "Very expensive," she said. "The ticket from Edmonton to the Arctic is more expensive than Tokyo to Edmonton."
The other costs add up, too. Hotels cost $150 per night. Car rental costs $200 per day. Meals cost $25 per head. I bet the average Japanese tourist drops about $10,000 on a two-week Canada vacation.
Here's the strange thing about this: Right now, the Japanese yen is the lowest it's been in 15 years against the Canadian dollar. In other words, Canadian vacations haven't been this expensive for Japanese tourists since 1992...
So my theory is: The yen is cheap, yet there are hundreds of thousands of Japanese tourists in Canada. When the yen gets strong, won't even more Japanese tourists come to Canada?
The Japanese and Canadian governments are behind this trend, too.
"The two governments," says a statement on the Japanese Ministry of Finance website, "have expressed their intention to make their best efforts to increase, by 2010, the volume of tourist flow between the two countries to one million: 800,000 Japanese tourists to Canada; and 200,000 Canadian tourists to Japan."
If you're looking for an interesting business idea, you might consider investing in Japanese-Canadian tourism. Set up a sushi bar at the Edmonton airport for example, or figure out how to lease Canadian tourism adwords on Japanese websites. These business plans don't have much downside, but if the Japanese tourists keep coming, you'll get rich.
Good investing,
Tom
P.S. Here's another conclusion. Buy Canadian natural resources. Canada is expensive for Japanese tourists, but they come anyway. It's the same way with Canadian natural resources and Asian factories.
Canadian natural resources are more expensive than they've ever been before, yet still the Asian manufacturers buy as much as they can. What happens when Asian currencies get stronger? Asian factories will demand more Canadian commodities, I expect. You can read more about this region – called Cascadia – here.
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