The Japan News Japan’s tourism industry has flourished due to the steadily increasing number of foreign visitors over the past few years. Donald Bunkenburg, senior director for Japan and Korea of the Lufthansa Group (see below), has more than 30 years of industry experience, and is carefully watching the changes in Japan from his perspectives as a businessman and as a private individual.
Bunkenburg recently spoke to The Japan News about his thoughts.
The Japan News: What do you think are the most powerful forces boosting tourism in Japan?
Bunkenburg: There are several issues right now driving the additional tourists to Japan. Number one is Japan is relatively unexplored by the rest of the world. That means that for a long time, tourists considered Japan as being a very expensive place to have a vacation. Now, over the last years I think that’s changed. The prices have come down, it’s now affordable.
I think the second thing is Japan is considered a very safe country, and that’s also very important particularly in the world today. I think a third issue of course is Japan is doing quite a bit of promotion around the world. The Japan national tourism organization is very active in promoting Japan as a tourist destination, and I think that’s really the first time that they’ve been so broadly active around the world.
I should add one more: The fourth one is there is more access to Japan. There’re more flights coming to Japan, there’re more airlines coming to Japan, so there’re more overall seats coming to Japan over the last few years.
Q: Lufthansa announced in July an increase in flights to and from Nagoya.
A: Right. Your first question was a little more about inbound growth, and there’s two customer segments that we normally work with. One is business, corporations and businesses, and business travel has always grown from year to year, both inbound and outbound, from Japan.
What has changed in the last few years is the amount of tourism growth, not only inbound — as we mentioned, the increase in interest in Japan as a tourist destination — but also outbound over the last year, particularly to Europe. As you know, there have been some issues in the last few years that reduced the number of Japanese passengers flying from Japan to Europe, because of the terrorism issues that they had.
But that has now changed. Over the last year that has come back. Japanese are flying again and traveling to Europe. So that increase in outbound traffic or outbound demand along with the increase in inbound demand means that there needs to be an increase in capacity.
Therefore, this winter we’ve added two additional flights to Munich from Haneda. In the wintertime we had five flights a week from Haneda to Munich. This year we have daily flights, so that’s one increase. And then the increase in flights to Nagoya is another increase, from three a week to five a week.
Q: Do you think the trend in business growth will continue?
A: Yes. Business growth and business activity between Japan and Europe has continued to grow steadily over the last few years. I think there are some things that will further increase [Japan-Europe travel] and keep this increase steady. Number one of course is the [Tokyo] Olympics in 2020. Obviously there’s preparation, we see already delegations coming in to set up the German House and the different areas where the different national teams will stay. There’s already planning where we see inbound delegations coming in to start setting things up on the business side.
The other thing, of course, is the free trade agreement that was recently [broadly agreed] between Japan and Europe, and we think that that also will drive additional business between Japan and Europe. So that will continue, I think, this upward trend of business travel.
Q: Could you elaborate on the relationship between your company and Japan?
A: I would say we have a reliable and consistent history in Japan. And that is something that is very much appreciated by the Japanese customer. You know, if you look at the two countries, these are countries that think very long-term. Japan is thinking in long-term planning, Germany thinks of long-term planning, and Lufthansa reflects the country it comes from.
We tend to plan long-term, we tend to steadily build up our business, we tend to commit to markets for a longer period, we don’t just jump in and out of markets, we tend to have a very consistent approach to the markets that we fly to.
Japan has been an important market for us for many years, in terms of the revenue generated here, and I think that is one reason that Japan as a market is so important to us, because a majority of the sales that we have between Japan and Europe are generated here in Japan. So that means that the revenue that we have from Japan is higher in terms of the percentage of revenue on the routes.
There are many destinations we fly to for which flights are filled from Europe to those destinations, but for Japan-Germany and Japan-Switzerland routes, and very similarly with Japan-Vienna or Japan-Austria routes, a majority, over 60 percent, of the seats are sold here.
‘Iconic’ Japan position
Q: I’d like to ask you about your personal story. What was your impression when you visited Japan for the first time?
A: I also have had a long relationship with Japan. My first trip here was in 1991 as a tourist. A cousin was living here teaching English, so I had the advantage of having someone who knew the language and was able to lead me around. I found it fascinating, the city of Tokyo, the engineering behind the building of the city, the traditional things outside. Of course we went to an onsen or two, so this whole cultural thing was appealing to me, and I thought, Japan is a place I would like to go back to one day.
To be the leader in Japan has always been one of the iconic positions in our company, somehow. I lived for a number of years in Asia before I came to Japan, and my first business contact with Japan was in 1999, with my first visit to ANA [All Nippon Airways]. Because we were just starting to cooperate with ANA, they were coming to Star Alliance, they were a new business partner of ours, I was living in Singapore as head of business and alliance development for the Asia-Pacific, and so my first business trip here was to visit ANA.
And so that also started a more business-oriented relationship between myself and Japan, through the relationship with ANA. And I was fascinated by the business culture here, by the presence of and how Japanese companies have built themselves into global companies around the world, and I was able to build a good relationship with ANA at the time.
Q: What do you think of Japanese corporate culture?
A: What’s fascinating to me about Japan and the Japanese corporate culture is the fact that the Japanese tend to be very private, maybe reserved, maybe shy. And yet, Japanese corporations have built themselves into huge global companies, and successful global companies, innovative companies, companies that lead markets, that lead product development. To me it’s fascinating to know how this happens. How does it happen that such a reserved culture can produce something that is so outward-looking?
I mean, when you look at the Sonys or the Toyotas or, you know, I could go on and on and on about a large number of Japanese global companies, how did this success come about? It’s a fascinating question to me, because Japanese companies have been so successful for many reasons, so the question for me is why and how did they achieve this?
Q: Have you found any secrets?
A: Well, I’m sure that there are many economists and what they would call global pundits that would have many, many reasons why, more than I would know. But my initial impression and my initial findings are that the companies, and indeed the Japanese culture, are very much focused on long-term plans, and the discipline to implement those long-term plans step-by-step.
And I think discipline is a big reason why. I mean you have to have people that have a vision, so obviously Japan has had visionaries that have said, I see Sony as a global company that can have attractive and innovative products and be placed and distributed around the world. First you have to have a vision. So obviously there was a generation of visionaries here that saw Japanese companies on a global scale.
You obviously need a vision, but you also need to have a long-term plan, and you need to be able to execute that plan.
Plus, I think the high priority on quality products and services has played a part in that success. So it’s many, many things, but these are the original, these are the things that I see right now, after two years in Japan, that’s a very short time. It’s impressive.
Q: The company will introduce new systems. Tell us a bit about that.
A: What we’ve focused on, aside from growth and the schedules and the capacity, we’ve focused quite a bit on digitalization. It is something that we’ve committed about €500 million to until 2020. Digitalization is such a broad term, but the question is what does it mean for the airline industry? What does it mean for our customers? It means that at every step of the journey, you want to be able to have a digital solution to make sure that the customers feel that there’s a personalized service.
You know, as you grow your business you have more and more volume. But you still want to be able to create an individualized feeling for each customer. You can only do that through digitalization, in today’s world.
Q: Have you returned to places such as Nikko since taking on your current job?
A: Yeah it was probably 1991, when I was here the first time, and I was just in Nikko again a few weeks ago. I don’t remember that there’s much difference other than that when I arrived at the train station in Nikko [this time] and went to the tourist desk the lady that was working there spoke fluent English.
She asked me exactly the right questions, like, how much time do you have here? OK, for this much time, this is the best route. She not only spoke perfect English but she understood exactly that I only had two days, but was very helpful in enabling me to see more than I had seen before. It’s a beautiful place.
Q: What is Japan for you?
A: Come back a year later and see. I mean, Japan for me is … let’s just say that there’s the practical and there’s the nonpractical. And there’s something very deeply rooted here that I want to understand better. Whether it be a philosophy, either a life philosophy or a way of leading your life, there’s something deeper here that I really want to learn about.
Aside from the traveling and seeing things, I sense there’s something that I need to understand better. That’s deeper than what I’ve experienced so far in two years. And I want to get there. I don’t want to leave Japan saying, I didn’t really understand that. Or, I didn’t get it. What was it? I want to be able to understand this depth somehow, that’s here, that I sense but I’m not understanding yet.
This interview was conducted by Japan News Assistant Editor Takeshi Nagata.
Born in Illinois in 1961. Bunkenburg joined Lufthansa in 1984 in the passenger service division at Chicago’s O’Hare International Airport. Over the years, he was promoted to various sales positions within the United States. He also took on several global positions based in Frankfurt, Shanghai and Singapore. After serving as managing director of sales in the United States, Bunkenburg assumed his current position in 2015. Based in Tokyo, he oversees the company’s commercial activities in Japan, including sales and marketing, with operations in Tokyo, Nagoya and Osaka. He majored in business administration and German literature at the University of Illinois.
■ Lufthansa Group
German-based airline group with 540 subsidiaries and associated companies operating worldwide. Its revenues reached €31.7 billion in 2016. At the end of 2016, the group had more than 124,000 employees. Lufthansa opened the Far East route between Frankfurt and Tokyo in 1961 and became the first European airline to fly to and from Osaka in 1969. Currently, about 300 Japanese flight attendants work for the company.