Newsletter: April 2020
16th Apr 2020
Covid-19: How we are coping
Wherever any of us live, we are having to deal with a situation unprecedented for generations. Everyone at Walk Japan and its Japanese affiliate, The Japan Travel Company K.K., trusts that yourself, your family and loved ones remain healthy and are coping well with the predicament the world has been plunged into. We deeply appreciate all our customers, friends and suppliers who have kindly contacted us to offer encouragement and support, and to those who have committed to joining us on tour in the future.
Knowing that many of you retain an interest in us and our activities we would like to explain what we have been doing on our part to sustain our business and those of our suppliers in the face of difficulties common to so many of us around the world. We would also like to let you know how we are making the best use of the time that we, as a business, unexpectedly now have on our hands, and, hopefully, in return provide a little cheer.
Managing our business under Covid-19
We conduct remote meetings on a daily basis to ensure that we are taking timely and correct decisions to protect our customers, staff and suppliers, and to provide everyone with as much clarity as possible. As a business, we have always planned for, invested in and operated for long-term success, and are working hard to ensure that we emerge as robustly from this as possible.
As we do in the normal course of our business, we continue to prioritise close communication with all our customers, staff and suppliers to understand how everyone’s lives are impacted and make sure this is reflected in how we act. At the time of writing, all our tours starting on or before 1st June 2020 are now officially cancelled and we are assessing the feasibility or otherwise of our summer tours. We have communicated directly on an individual basis with almost all those customers affected, are continuing our efforts to reach those who have yet to respond and are in the process of contacting a small remaining number. We have been using our website and social media, principally Facebook, to provide information to a broader spectrum of customers and other interested parties.
Lockdowns and worldwide travel embargoes necessarily affect many industries including the world’s travel industry. Walk Japan, of course, is no different. With no customers, consequently and not surprisingly, we have had to put our company into a state of semi-hibernation to help see us through the worst and onto better days.
Provision and adjustment
Japan is uncommonly prone to natural disasters. As a core business policy, since 2011, when a series of massive earthquakes and tsunami struck the nation causing meltdowns at the Fukushima nuclear power station, we have built up and retained a strategic cash reserve to help us through crises that could otherwise compromise Walk Japan’s business.
Our reserve was designed to see us comfortably through at least six months of disruption but the impact of the Covid-19 pandemic suggests it may be a more drawn out event, well beyond our most pessimistic scenario. Fortunately, we have been able to undertake some rapid and major cost reductions without losing any staff. Some will go on paid furlough while others have willingly agreed to reduced remuneration. These are made according to staff seniority - the greater the seniority the greater the reduction. Our CEO and Managing Director have taken a 50% cut. The rest of our staff have agreed to 40% for senior managers ranging down to 10% for junior staff, and reductions are adjusted according to personal circumstances. For example, some of our staff have higher costs living in cities while others have young families to care for. We have also been able to reduce our overall rent expenses significantly on property leased to our company by one of our directors, who has waived it for the duration of the crisis. With some further reductions to our fixed costs, which will be phased in over the next two months, we have been able to extend significantly the period of time we can manage without resorting to bank loans or similar. Not having any debt nor outside investors is advantageous in this situation.
The majority of our Tour Leaders are freelance and while many of them can survive without income from tour work, some are in a more delicate situation. We are prioritising the latter in finding work for them within Walk Japan researching and building new tours, and creating and editing materials. We have also introduced some to other businesses that require their particular skill set - a vehicle mechanic for example, and have offered work helping with our Community Project. We also hope to find agricultural seasonal work for others through the summer months.
As and when Walk Japan’s financial situation allows, we will reinstate salaries starting with our junior staff, then through our managers and finally our CEO and Managing Director.
As a whole we have long-been well versed in working remotely, which allowed us from the earliest days of the outbreak to rapidly move many of our office-based staff in Hong Kong and Tokyo to home-working. In recent weeks the remainder have joined them and our physical offices in Hong Kong and Tokyo are to all intents and purposes closed, supplanted with a virtual office to maintain our business. Our offices on the Kunisaki Peninsula remain open, although we continually review this. Here the population is sparse with no record of infection and life continues, albeit at a more subdued pace than normal. Nevertheless, we have reduced staffing levels by 80% as many colleagues are now on paid furlough, aided by generous Japanese government subsidies. Currently, in Kunisaki the sakura cherry blossom is at its peak and magnificent - the top image is of the park we care for as part of the Community Project - and, as the weather increasingly turns balmy, we are able to leave windows wide open for a good flow of fresh air through our offices there.
Tours are our mainstay. However, we have also been building an Japan-inbound tourism consultancy that draws heavily on our experience and skills gained through our tour business and Community Project. Year-on-year, we have been increasing this work, which is with central and local Japanese government agencies, and some major Japanese corporations including All Nippon Airways (ANA). Fortunately, the revenue generated from this work remains even in the current situation and we expect it to grow further over the course of 2020 and beyond. One result of this work is Oita Prefecture’s English-language inbound website, which we first created in 2018 and have continued developing since then. It is still are work in progress but you may find it piques your interest.
As mentioned on above, we are increasing our activity in new tour development. We recently introduced our latest tour, the Shio-no-Michi: The Salt Road, just as the pandemic was gathering pace so you may have missed it, and anticipate adding several more new tours across Japan for 2021.
Most recently, we established Ota Estates, an agricultural corporation, to undertake the rapidly growing farming element of our Community Project. Currently, we are harvesting shiitake mushrooms and preparing the logs on which they are grown, and expanding the acreage of our organic market garden. Over the coming weeks we start tilling our paddy fields, and flooding them in preparation for planting in June. We continue the year-round work tending the local parks and reinvigorating Kunisaki’s Globally Important Agricultural Heritage Systems (GIAHS) kunugi oak forests. We have just completed negotiations to take over the cultivation of more rice paddies, which an elderly farmer can no longer care for, and expect to engage over the coming months with other locals who find themselves in a similar situation.
Until the latest restrictions placed on Tokyo, Osaka and other regions were announced on 6th April, we were due to welcome a film crew from the Japanese public broadcaster NHK to the Kunisaki Peninsula. They were to report on our business, Community Project and how we are dealing with the Covid-19 situation for a special program to be shown on NHK’s English-language world broadcast. Their visit has been delayed until further notice, but for those who are interested in seeing the program, as and when we have the details we will let you know via our newsletter and social media.
We are posting regularly to Facebook and Instagram drawing on our large catalogue of images and stories in addition to providing the latest news. Please do keep an eye on our social media channels and interact with us.
Being positive and working together
At Walk Japan we are doing what we realistically can do at the moment and will continue to adapt our ways to the changing situation. We truly hope that you have found the above of some interest, succor, and that it may provide inspiration at this time of immense upheaval. Please do let us know how you are faring. There may not be much else anyone can do at the moment. However, if nothing else, in supporting each other around the world to the extent we are able, we can learn from our shared experiences and rebuild together.
As the situation revolving around Covid-19 develops, we will provide updates on our homepage, Facebook and, where necessary, personally via email. If you have yet to hear from us directly and are expecting to do so please contact us.
We wish all of you strength and wellbeing, and look forward to sharing better days ahead with everyone.
Paul Christie, CEO
Llew Thomas, Managing Director