One of the industries most affected by the pandemic, in Japan and worldwide, was the travel industry. H.I.S., one of Japan’s leading travel agency groups, recognised this critical situation early on and transformed itself in Europe from a travel agency into a concept store for Japanese food – just six months after the global outbreak of the Corona pandemic. Björn Eichstädt and Camilla Shiori Oura-Müller talked to Tetsuya Kawabata, Managing Director of H. I. S. Deutschland Touristik GmbH, who used the crisis as an opportunity. Why the old and the new business divisions are similar, how to get into fast gear during crises, how the staff reacted and what the plans are for the future – that’s what this interview is about.
J-BIG: First of all, please tell us something about the history of H.I.S.
Tetsuya Kawabata: H.I.S. was founded in Tokyo in 1980 by Hideo Sawada. Today he is the chairman of the company. At the time, the price of a plane ticket from Japan to abroad was extremely high at 500,000 to 700,000 yen, making international travel unaffordable for many people. However, Mr Sawada found a way to offer cheap airline tickets for 140,000 to 280,000 yen based on his experience as a student at Mainz University in Germany, from where he travelled to more than 50 countries as a backpacker. After the foundation, a period followed in which the number of international trips increased sharply. And within about 10 years, we were able to offer affordable travel to virtually all corners of the world. Our company was named H.I.S., an acronym that stood for “Hide International Service” – after our founder’s given name – with the hope that more Japanese would go abroad. Currently, we have also added the meaning “Highest International Standards”.
J-BIG: So in the beginning, H.I.S. offered cheap airline tickets and travel.
Tetsuya Kawabata: That’s right. Originally, we were an agency that arranged airline tickets and local hotels and offered attractive tours to travellers. In 1996, we founded Skymark Airlines, currently the third largest airline in Japan. In the meantime, however, it is no longer part of our group. In 2010, we converted Huis Ten Bosch, a theme park in Nagasaki Prefecture, into a subsidiary and made it profitable. We are also developing our hotel business in Japan and abroad, including the world’s first “Henna Hotel” where robots serve guests. In this way, we wanted to offer a new added value that goes beyond mere brokerage and provide a complete one-stop service that makes travellers feel completely at home.
At the time of its foundation, several classic companies were already operating in the travel market and H.I.S was positioned as a start-up company. The entrepreneurial spirit of our employees is still alive and our company is characterised by a willingness to take on new challenges. We believe that this attitude also transfers to our customers.
J-BIG: What happened next with hotels and theme parks?
Tetsuya Kawabata: In our hotel business, in addition to the operations in Japan, we have 41 facilities under eight brands in six countries, including Guam, the US and Taiwan. The first Henna Hotel opened in Huis Ten Bosch in 2015 and was so successful that it was expanded throughout Japan. The hotel also attracted attention during the Corona crisis in that its touchless service became relevant as the front desk staff consisted of robots.
Further steps are underway to apply the knowledge gained in the travel business to a variety of other endeavours. For many people, one of the best parts of travelling is tasting the local delicacies. Therefore, we are currently focusing on the food, beverage and agricultural products sector, for example by opening a restaurant for soba noodles, which are still less well-known abroad compared to sushi and ramen, and by conducting trials to grow mini tomatoes.
“J-BIG – Japan Business in Germany” is the e-mail magazine dedicated to Japanese companies and their business activities in the German market.
J-BIG: Why did you recently renew your company logo?
Tetsuya Kawabata: The new logo differs from the previous alphabetical lettering by a simple motif of a square and a circle behind the word mark “HIS”. We have chosen a shape that allows people to recognise H. I. S. by its silhouette and not just by its letters, and that may be familiar even to those who cannot read the Latin alphabet.
J-BIG: How big is your company worldwide?
Tetsuya Kawabata: We are present in 60 countries and 112 cities with 291 branches. Due to the Corona crisis, we had to withdraw from about 10 countries. Fortunately, we were able to maintain the number of branches in Germany.
J-BIG: When did you realise that you needed to change the direction of your company after the start of the Corona crisis in 2020?
Tetsuya Kawabata: When I was transferred to the German subsidiary in spring 2020, there was an unfounded hope that the Corona situation would improve soon, but after about six months we started to think about concrete alternatives to the travel business. There were entry restrictions and lockdowns that made it difficult to travel from, say, Japan to Germany or in the opposite direction. In the hope that people would look forward to the day when they could travel again, we used the facilities and space of the shops that used to be travel advice offices and opened the first H. I. S. JAPAN PREMIUM FOOD & TRAVEL concept store for Japanese food and sake in Berlin in November 2020. After thinking about what we could do, since we are a travel agency, we founded this shop with the aim of contributing to future trips to Japan, as a place where the specialities of the different regions of Japan can be conveyed through Japanese food. For example, when German customers buy sake from us from Niigata Prefecture and find it delicious, they may think: “Next time I travel to Japan, I would like to visit the “real” Niigata”. In this way, we hope to create synergies with our original travel business. And the opening went more smoothly than we had expected. We were able to prepare for the opening quickly by, for example, reusing the shelves where we kept the documents from our travel agency days as shelves for food products. Today there are six concept stores in Europe, four of which are located in one of the former H. I. S. offices.
In an emergency situation like the Corona crisis, we have to orientate our business differently in order to increase sales and protect our employees. Also, thanks to these concept stores, we can maintain our offices. Currently, we are promoting the business all over Europe, starting with Germany, and we hope to expand it to shops all over the world.
J-BIG: Tell us something about your start in Germany.
Tetsuya Kawabata: H.I.S. first came to Germany in 1990. That was 32 years ago. We established our first branch in Frankfurt because there is a hub airport there. Today we have locations in Germany in Munich, Berlin and to a lesser extent in Düsseldorf. Shortly after the reopening of the Berlin office in 2019, the pandemic unfortunately started. The change from the traditional travel business was not easy. But because the Berlin location was not yet fully established, we were able to change direction from travel agency to Japanese food concept store without much hesitation.
Before the Corona crisis, a total of almost 30 people worked for H. I. S. Germany. Today, the concept store is run entirely by staff who were already employed before Corona. Many of the Japanese employees have lived here in Germany for a long time and speak German.
J-BIG: How did the idea for the concept store originally come about?
Tetsuya Kawabata: The idea actually came from our German office. Of course, we needed business approval from the Japanese headquarters, but the entire staff in Germany worked together to realise the idea of a concept store.
I myself have only been in Germany for a short time, but when I started living here, I felt that there weren’t many places where you could buy Japanese food. So I had high hopes that the approach of a concept store offering authentic Japanese food for local customers would be a good fit. It’s not that we want to compete with long-established Japanese food shops. We want to continue to offer the “travel” experience and the concept store should be an added value. At the moment, transport costs are very high and there are many challenges, but we believe this was a necessary measure to get us through the period when we were on the ropes due to the Corona crisis.
J-BIG: Did the staff at the German branch readily accept the change from travel agency to Japanese grocery shop?
Tetsuya Kawabata: I told our staff every day that our job is a service business before it is a travel business. What we offer our customers has changed from “travel” to “food” – nothing more. The products we sell and the way we sell them may be different, but the core values we follow are the same. The staff at our German branch love Japan and want to showcase the country’s attractions. Maybe that’s why none of our employees has ever refused to work at the Concept Store.
J-BIG: How do you work with the Japanese headquarters?
Tetsuya Kawabata: We have daily online meetings with our headquarters in Japan. There are many departments in addition to those responsible for the individual prefectures. So we always try to exchange ideas about new foods or travel-related information.
“In Japan there are many people who love to find and share good food and restaurants. I want to transfer this Japanese idea of service and culinary to new business areas.”
J-BIG: Do you think that the number of travellers abroad will return to previous levels?
Tetsuya Kawabata: To be honest, I don’t think the scale will come back completely in the next four or five years. It is inevitable that the form of overseas business trips or global business developments will change in the future as online meetings have become more common. On the other hand, it is still very important to see things with your own eyes. I hope that many more people will want to have the experience of seeing “real” things.
The concept of H. I. S. JAPAN PREMIUM FOOD & TRAVEL is “food” and “travel”, and we would like to expand this concept in Germany in the future, also by bringing the idea back to Japan. We want to do this, for example, by making “premium” food from Italy or Spain etc. available to people in Japan or even in Germany. In Japan there are many people who love to find and share good food and restaurants. I want to transfer this Japanese idea of service and culinary to new business areas. In this context, the distribution channels we have developed as a travel agency, closely linked to each prefecture in Japan and to countries and regions around the world, as well as our ability to tell the appeal and stories of our products, are what differentiates us from ordinary supermarkets – and our strength with our many shops is to make this happen locally.
In the beginning, no one would have trusted us if we had opened a concept store specialising in high-quality food with European ingredients, for example. That’s why we want to initially start by getting more fans in the Japanese food sector.
J-BIG: Do you also offer travel concepts within Europe for Japanese in Germany?
Tetsuya Kawabata: Our customers are not only Japanese living in Germany. Our main target group is everyone living in Germany. For example, if a German person wants to book a trip to France with H. I. S., they can do that too – H. I. S. still has the image of a “travel agency for Japanese”, but we want to convey that we offer services on a global level. And I would be happy if the realisation that Japanese are good at discovering high-quality goods and services would also spread a little in Germany and Europe.
J-BIG: What are your plans for the future?
Tetsuya Kawabata: First of all, we plan to digitise our travel services. Until now, it was still common for our customers to visit a travel agency, speak directly to a tour operator and book a trip, but the Corona crisis has made online booking even more popular. To keep up with this trend, we are now focusing on introducing our own online booking system.
And of course we need time and manpower to keep the concept store running. We sincerely hope that we can use our knowledge and contacts as a travel agency to provide delicious food and the best possible service to all those who visit H. I. S. and look forward to the day when they can travel the world completely free again!