The Journal The Authority on Global Business in Japan

The Union of Kansai Governments (UKG) is a statutory entity covering the prefectural governments and the designated cities of Osaka, Kyoto, Kobe, and Sakai. For the past several years, the Kansai chapter of the American Chamber of Commerce in Japan (ACCJ) and UKG have engaged in annual panel discussions centered on the ACCJ’s “One Kansai” Viewpoint, foreign direct investment (FDI), development of global talent, and diversity. Last year, the focus of the ACCJ–UKG panel discussion was Kansai tourism and the World Masters Games 2021 Kansai.

With Kansai’s tourism continuing to grow and reaching all-time highs, this year’s ACCJ–UKG panel—Tourism and Integrated Resorts (IR)—was held at The Ritz-Carlton Hotel, Osaka.

UKG panelists were: Toshizo Ido, UKG president and governor of Hyogo Prefecture; Akimasa Yamashita, UKG vice commissioner and vice governor of Kyoto Prefecture; and Seiji Hamada, UKG vice commissioner and vice governor of Osaka Prefecture.

ACCJ panelists were: Christopher LaFleur, ACCJ president and senior director at McLarty Associates; Jason Hyland, president of MGM Resorts Japan LLC; and Christopher R. Clark, general manager of The Ritz-Carlton, Osaka.

The panel discussion, organized by the ACCJ–Kansai External Affairs Committee and chair Akio (Arthur) Matsumoto, was moderated by Steve Iwamura, special advisor at ACCJ–Kansai and partner at Deloitte Touche Tohmatsu Group, and Takeo Mori, chief executive officer of Kansai Tourism Bureau.

EYES ON KANSAI
Osaka is now being mentioned in Las Vegas industry media as the likely front-runner for the first IR in Japan. Representing a potential investment in Kansai of $5–8 billion, how can such an investment and the future of tourism in Kansai be discussed without the inclusion of IR operators? The ACCJ–Kansai felt this was important, and the UKG agreed to include MGM Resorts Japan.

The UKG panelists acknowledged the ambitions of Osaka Prefecture and Osaka City to host Japan’s first IR, and expressed their support. Questions were asked about countermeasures for gambling addiction, which were addressed by Hyland.

BENEFITS
With more than 95 percent of Japan’s FDI concentrated in the Greater Tokyo Area, an IR investment in Kansai would help the region share in the benefits. Various ideas on how to build upon existing tourism success stories were shared. For example, an IR coupled with Universal Studios Japan (USJ) in Osaka would further enhance Osaka’s reputation as an entertainment destination.

USJ, owned by New York-based NBCUniversal, is now the fourth largest theme park in the world. With 14.5 million visitors in 2016, it is ahead of Tokyo’s DisneySea, which welcomed 13.46 million. And that’s nearly double the 8.09 million who visited USJ’s sister park, Universal Studios Hollywood, in 2016.

A CLEAR MENU
Looking from the outside in, panelists pointed out that Kansai needs to invest in communicating a global tourism brand, presenting a regional menu of experiences to potential visitors, and ensuring that these experiences are enjoyed, conveyed, and repeatable.

Government officials on the panel explained that tourism is not just about visitor quantity, but also diversification, higher spending, spreading the economic benefits to the regions, and balancing sustainability for both residents and tourist.

Panelists agreed that, to accomplish this, the future of tourism in Japan will require specialists, IT know-how and investment, funding, and—most of all—collaboration.

To reach the next stage, Kansai will need more money than self-funding and hotel taxes can provide. An IR is not only a great investment that can synergize tourism in Kansai, it is also a potential source of collaboration and funding that would benefit the Kansai region as a whole.

The ACCJ is committed to improving the international business environment in Japan. As the country considers IRs and how these developments could support the greater tourism strategy, dialogues like this one are essential to ensure that the private sector is able to provide practical input into the policymaking process.

Steve Iwamura is vice-chair of the External Affairs Committee, ACCJ–Kansai special advisor, and partner with Deloitte Touche Tohmatsu.