Building a Digital Infrastructure to Revitalize Local Consumption
In November 2021, Recruit signed a comprehensive cooperation agreement with Fujiyoshida City in Yamanashi Prefecture to increase tourism using digital transformation (DX) tools and initiatives. This was followed by agreements with Myoko City in Niigata Prefecture in December 2021, and, more recently, with Hakone Town in Kanagawa Prefecture on March 22, 2022. We spoke with Tatsuya Kijima, Executive Producer of the Travel Division and Researcher at Jalan Research Center (JRC), about future initiatives and prospects for tourism DX.
Visualizing Regional Consumption Data: Creating an Infrastructure for Understanding the Current Situation and Predicting the Future
For nearly 20 years, Recruit has been involved in a variety of initiatives related to regional development in Japan. Established in 2005, JRC is one of Recruit's research institutes that specializes in tourism and local revitalization. The Center has been particularly focused on supporting local governments throughout Japan and has identified the "increase in regional tourism consumption" in rural areas as an important issue in this process. JRC has previously worked with cities to develop interactive local activity experiences for tourists, such as weaving and herbarium lessons. Now, the Center is looking to aggregate tourism consumption data with the help of Recruit Air BusinessTools.
As a first step, Recruit signed a comprehensive cooperation agreement with Fujiyoshida City in November 2021. The city was struggling to increase tourism consumption and initiated an experiment to build a regional consumption analysis platform to serve as a model for tourism DX in the region. Through this agreement, the Fujiyoshida City government and its local businesses (such as lodging facilities, restaurants, and souvenir stores) along with Recruit are working together to build a platform that can leverage various data to gauge the current state of tourism consumption and predict the future.
Local tourism and inn associations have typically kept track of the number of room bookings and vacancies in a season, but sales information from nearby stores and restaurants is not captured. Without a comprehensive data capture plan, tracking the effectiveness of current and future measures is not possible.
The agreed plan aims to promote tourism strategies by creating a data capture infrastructure that can accurately collect and analyze sales and tourist data in Fujiyoshida City. The infrastructure would benefit the local government by allowing them to gauge the efficacy of their current measures and inform future ones.
Tourism DX Project for Fujiyoshida City, Yamanashi Prefecture: Collaborative Team Chart
Creating "Room for Growth" to Stimulate Consumption
Recruit promotes cashless transactions through AirPAY, a payment service for stores that accepts credit cards, electronic money, QR code payments, and payments using loyalty points. AirPAY is offered as one of Recruit's business and management support services in the Air BusinessTools suite. More small and medium-sized businesses in the area, such as soba noodle shops and tea shops, have adopted AirPAY to streamline business transactions.
Air BusinessTools provides a comprehensive bundled suite of cloud-based solutions, including cashless payments, POS system, reservation and queue management, and shift management. SMEs can reduce the time and cost of labor intensive operations by implementing solutions such as AirREGI and AirPAY.
Through this agreement, Tatsuya’s team will build a digital consumption infrastructure that focuses on promoting cashless payments using AirPAY. They will provide Fujiyoshida City with various data collected by Recruit's services, including those in the Air BusinessTools suite, to better visualize tourist data. These data will be used for research purposes on how to best promote local consumption.
For example, if there’s a cherry blossom festival planned for the spring and the city sets a tourism consumption target, the analysis platform will aggregate data around the number of event visitors and the amount of local consumption. The platform will allow the local government to evaluate how much of the consumption target was attained and identify factors for improvement. Doing this helps businesses determine how to strengthen their sales strategy for the next event, perhaps by developing special event menus. According to Tatsuya, this "room for growth" strategy will further promote consumption.
“If we work together with local governments and utilize the data collected through Recruit's services, we can start a cycle in which we can all think of solutions from the same perspective, implement them, and share and reflect on the results based on facts, not just senses,” said Tatsuya. “In order to revitalize tourism consumption, we need to figure out what is missing and what needs to be increased, find effective measures, and innovate from there. I believe that we can revitalize the Japanese economy from the local level.”
Forecast of Future Construction of Digital Consumption Infrastructure ※Data is provided to Fujiyoshida City in a format that does not allow the identification of individual users.
Democratizing Tourism DX to Revitalize the Japanese Economy
Tatsuya, who has taken on various challenges for regional development in Japan, expressed his passion for his work.
“DX refers to the use of digital technology and data to transform business processes and create new value,” said Tatsuya. "My role involves thinking about how I could contribute to tourism DX in Japan by promoting Recruit's digital technology services and leveraging the various types of accumulated data. I often go to restaurants and hostess bars in the city to learn about the area and to try local dishes. I discover a lot of new things while doing this. For example, if I visit a soba noodle restaurant with a special distinctiveness that cannot be found in Tokyo, and it's also reasonably priced with a family-friendly clientele, I think about how tourists would love to eat there. Or I might find a hostess bar that will be popular with foreign tourists because of the cheerful and upbeat demeanor of the owner.”
“I always discover something new and special whenever I visit a city or region. I want other visitors to experience these special qualities too, and bridging this gap is where I feel room for growth.”
In continuing these efforts, Recruit signed a comprehensive cooperation agreement with Myoko City in Niigata Prefecture on December 1, 2021. Myoko, a popular ski and snowboard destination, was struggling with the gap in tourism between the busy snow season and the quieter green season. The Myoko agreement aims to increase the amount of tourism spending in the city during the green season.
On March 22, 2022, Hakone Town in Kanagawa Prefecture signed a similar agreement to revitalize consumption in the region. Hakone is a popular hot spring resort in Japan, but the number of tourists had declined significantly due to natural disasters and the COVID-19 pandemic.
Recruit will work with these cities to introduce Air BusinessTools to continue promoting tourism DX.
“We want to contribute to the democratization of tourism DX by implementing Air BusinessTools, which is already being used by small and medium-sized companies throughout Japan, as a digital consumption platform for these regions," said Tatsuya.
Fujiyoshida City Mayor Shigeru Horiuchi's Expectations for Recruit
Fujiyoshida City has been working with Recruit since 2016, starting with the formulation of the basic tourism plan for Fujiyoshida City. In 2018, we signed a "Comprehensive Collaboration Agreement on Tourism Promotion" to create a vibrant community through the promotion of tourism. This collaboration has produced many achievements in projects we are undertaking together, such as promoting cashless payments, creating experiential programs, and revitalizing the city center.
Fujiyoshida City Mayor Shigeru Horiuchi
The project to create experiential programs has been particularly key for promoting consumption from tourists during trips. We’ve gone on to develop as many as 100 lessons to serve this purpose. With Recruit’s help, we are developing more tourism projects that are in line with the recent shift from "sight-seeing" tourism to "experience" tourism. This is generating communication between local businesses and visitors, which then translates into a factor for tourists revisiting the region. The project to revitalize the city center has also been recognized by the Japan Tourism Agency as one of Japan's leading night-time economy projects.
We have recently signed a "Comprehensive Collaborative Agreement for Tourism DX," a further leap forward from our previous agreement. Through this agreement, we will conduct an experiment to build a platform for analyzing local consumption in our city using digital technology, which will be used to promote future tourism strategies and to monitor the promotion of these strategies. I anticipate that this will lead to initiatives in our city’s tourism measures that meet current needs.
Links (Available in Japanese only):
Jalan Research Center
Press Release: Comprehensive Cooperation Agreement with Fujiyoshida City
Press Release: Comprehensive Cooperation Agreement with Myoko City
Press Release: Comprehensive Cooperation Agreement with Hakone Town
General Planning Group, Regional Development Department, Travel Division, Jalan Research Center, Recruit Co., Ltd.
Tatsuya joined Recruit Co., Ltd. in 1991, where he was involved in proposal-based sales for recruitment and HR organization strategies for over 20 years. Tatsuya joined the JRC in 2012 for some time before becoming the Group Manager of General Planning at Recruit, where he oversaw nationwide projects with central government tourism agencies. He was appointed Executive Producer in 2021 and concurrently works as a Researcher at JRC.