A Bankable Concept?
A mix-up between a Japanese travel firm and two Hawaii lenders highlights the idea of combining tourism and banking
TOKYO – A news item concerning Hawaii tourism came up late last year that led to a difference of opinion between a Japanese travel firm and two big Hawaii banks. As I write in mid-April, that disagreement has still not been completely ironed out.
The most interesting part of the misunderstanding between Osaka-based Travel i Corp., Bank of Hawaii and Central Pacific Bank is that it highlights the idea of combining Hawaii’s allure as a travel destination with its potential to attract Japanese offshore investments.
The saga began in December, when Travel i announced tours for Japanese curious about opening bank accounts in Hawaii, in cooperation with Bank of Hawaii and CPB.
The firm pitched the idea as a way for investors to protect their wealth amid apprehension about Japan’s financial system and dismal returns at Japanese banks.
The thing is, both Hawaii banks deny entering a formal agreement with Travel i or its parent, F-Ness Corp., though they say they are positive about working with Japanese tour groups.
Travel i is sticking by its story. When I spoke to him recently, the firm’s president, Yoshiharu Nishijima, went so far as to say that Travel i has a contract with the lenders, though he sidestepped questions about details.
At this point, the fine print may not even matter. Travel i has yet to sign up even one person for its bank tour – even though it initially envisioned an average of 100 takers per month. Nishijima remains optimistic, however, saying, “It’s just a matter of time” before the tour takes off.
No matter how this story ends, Travel i’s gambit raises an intriguing point, which is that dreaming up ways to encourage Japanese people to park their money in Hawaii may not be such a bad concept.
More than ever, ordinary Japanese people are looking for good places to invest. The country’s population is rapidly aging and people are worried about their nest eggs. At the same time, the public is growing savvier about investment options and Japanese laws concerning investing abroad have been relaxed.
While the target audience is somewhat different, there is a precedent for mixing tourism and banking: Major Japanese travel agencies and some investment consultancies have already started marketing private bank tours to Europe for wealthy Japanese.
JTB Corp., Japan’s largest travel agency, and Kinki Nippon Tourist Co. each inaugurated such tours last October. In April, JTB decided to market the trips three or four times a year, says spokesman Hiroshi Ueno.
The tours are not cheap. JTB charges 1.3 million yen ($10,800 at recent exchange rates) for an eight-day excursion to Geneva, Zurich and Liechtenstein. The benefit is that they give potential Japanese clients and the banks an opportunity to meet face-to-face with no strings attached.
Until Travel i came along, it appears that no one was marketing bank tours to Hawaii, and it’s too early to say if the idea will succeed. From a layman’s view, though, the general concept is intriguing.
The foundation already exists. Bank of Hawaii and CPB both have long offered accounts to nonresident Japanese and employ Japanese-speaking staff.
The banks say that the accounts opened by Japanese make up a relatively small percentage of overall deposits. But Wayne Kirihara, CPB’s senior vice president of marketing and sales development, says that, in spite of the exchange rate risks, demand has picked up due to Japan’s depressed interest rates. He estimates that deposits by non-resident Japanese have grown at an average annual rate of about 20 percent.
Frequent travelers open the bulk of the accounts. Yet in discussing why Japanese choose CPB, Kirihara makes several key points that show why Hawaii in general could be an attractive destination for Japanese funds, such as better returns, the perceived safety of the U.S. financial system and the ease of electronic banking.
Psychology is also important. As Kirihara puts it, “Most of the people that open accounts here have some kind of familiarity with Hawaii. … They know the area and they know there’s a strong Japanese influence in Hawaii itself. So although it’s a foreign country, it’s not as foreign as some other places.”
Bank tours to Hawaii? With the right packaging, they could mean money in the bank.
Dawn Matus is an American journalist who has lived in Japan since the late 1980s. She can be reached at dmatusjapan@yahoo.comDo you like what you read? Subscribe to Hawaii Business Magazine »
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