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ECONOMIC AFTERSHOCKS

L.A. is bracing for a drop in tourism

Dozens of groups from Japan have canceled trip reservations

March 25, 2011|Hugo Martin

As Japan struggles to rebuild from the devastating earthquake and tsunami, the U.S. travel industry is bracing for a drop in high-spending tourists from that country.

Dozens of tour groups from Japan have already canceled reservations for hotels and sightseeing trips in Southern California. Local travel agents are coping with airline cancellations. And with the disaster's aftereffects still uncertain, merchants are anxious.

"The impact from the international-business-travel side could be significant," said Charles Ahlers, president of the Anaheim/Orange County Visitor and Convention Bureau. "They stay a long time and spend a lot, and that's why everyone loves the Japanese market."

Up to 40% of tours for Japanese visitors have been canceled at Nada Bus Inc. in the City of Commerce, said operations manager Kats Saito, who added, "I suspect it's going to get even worse later on."

In Los Angeles, Japanese tourists represent the third-largest source of overseas visitors, behind Australia and Britain. In Orange and San Diego counties, Japanese are second only to the British as the top overseas visitors.

Last year 305,000 Japanese visitors traveled to Los Angeles, spending $279 million, according to L.A. Inc., also known as the Los Angeles Convention and Visitors Bureau.

Although companies that specialize in tours for Japanese visitors have reported dozens of cancellations for the next month or so, Southern California theme parks and restaurants often favored by Japanese tourists say they have yet to see a drop in business.

At the offices of Top Tour America in Torrance, President Mike Miura said about half of his tours for March and April had been canceled.

But Miura hopes business will bounce back soon, just as it did after the terrorist attacks of Sept. 11, 2001.

"After a few months, I expect it will come back to normal," he said.

In downtown L.A.'s Little Tokyo neighborhood, travel consultant Masato Kimura has a cardboard box on his desk, half full of refund forms from travelers to and from Japan who have canceled travel packages.

The box began filling up soon after the earthquake and tsunami hit, followed by the crisis at Japan's damaged Fukushima Daiichi nuclear power plant. Kimura is not sure whether his clients will request new flights any time soon.

"Because of the nuclear accident, nobody knows," said Kimura, who works for Tokyo Travel Service.

Because of the uncertainty surrounding the nuclear reactors in Japan, Kimura said, his mother, sister, aunt and cousin all flew to Las Vegas to wait out the disaster.

"No gambling," he added. "Just waiting to see what happens."

A few blocks away at the Kyoto Grand Hotel and Gardens, sales director Garriann Young said she was pleasantly surprised that the hotel had only four Japanese tour groups cancel since the disaster, resulting in the loss of 100 room nights.

"I was really bracing for more," she said. "We may see more as we move into the future."

Japanese tourists who are already in Southern California continue to take in attractions. A dinner at Lawry's on Beverly Hills' Restaurant Row remains on many itineraries.

"I'm still seeing a lot of Japanese guests," said Todd Johnson, the restaurant's general manager.

Nationally, Japan ranks behind Canada, Mexico and Britain as the largest source of tourists.

In 2010 the U.S. welcomed 3.4 million Japanese visitors, who spent, on average, an estimated $4,500 per person per visit, behind only the Chinese, who spent an average of $6,800, and Australians, who doled out $4,700, according to the Commerce Department.

The global airline industry, which has only recently begun to recover from the recession, could also take a hit. The International Air Transport Assn., the trade group that represents the world's largest airlines, has predicted "a major slowdown" in air travel to and from Japan, which represents 6.5% of the world's air traffic and 10% of the airline industry's revenue.

"It certainly will be anything but positive," said Geoff Freeman, executive vice president for the U.S. Travel Assn., the nation's largest travel industry group.

Several flights between the U.S. and Japan -- including recently added Delta flights from Los Angeles to Tokyo's Haneda Airport -- were temporarily canceled or rerouted to other Japanese airfields this week.

Some travel industry experts predict that if travel from Japan drops heavily, U.S. travelers could benefit if hotel and other travel businesses lower their rates to make up for the shortfall in Japanese visitors.

"Normally, when people stop traveling, there are air sales," said George Hobica, founder of the travel website Airfarewatchdog.

Along with Los Angeles, San Francisco and Las Vegas are popular with Japanese tourists. But none of them compare to Hawaii, where Japanese tourists represent the second-largest group of visitors, behind tourists from the mainland U.S.

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