South Korea and Taiwan look set to benefit most, as Chinese tourists originally bound for Japan switch destinations, following the ownership argument over the Senkaku Islands.

 

A total of more than 50,000 Chinese flight cancellations on Japan Airlines and All Nippon Airways have been reported so far, while the tourism authorities in Taiwan are predicting that around 80,000 Mainland Chinese – four times the normal level for this time of year – are expected to visit Taiwan around and during the Golden Week holiday period, which finishes on October 8.

 

[Left: Narita Airport]

 

As reported by The Business a week ago, this issue was all brought to a head when the Japanese Government recently ‘acquired’ the aforementioned islands’ from a private individual who had also claimed ‘ownership’ of the East China Sea Senkaku islands. This triggered widely-reported protests against Japanese businesses within China and an escalation of diplomatic tension between the two nations.

DF&TR retailers in South Korea and Taiwan are now gearing up for a busy period, ‘thanks to the frosty relations’ between Japan and China over the ownership of the islands. Travel agents and airlines are now recommending ‘other close proximity destinations’ for Japanese tourists to switch to, as they try to retain and rescue as much ticket and tour revenue as possible from Chinese tourists cancelling their Japanese trips.

How long this dispute will continue remains to be seen. Some of the more experienced international foreign correspondents seem to agree that the dispute warrants a five out of ten on the severity scale. However, many are also acknowledging that the normal tit-for-tat exchanges will need to take place, along with symbolic measures, before China and Japan can restore the previous diplomatic status quo. This is where both happily agree to disagree on this issue – as long as each one does it quietly and respectfully.

Meanwhile, Japan Airlines’ share price fell by around 9% today on continuing news surrounding the dispute and trading was said to be weak relating to companies with large exposures to Mainland China.

This dispute comes at a bad time for Japan’s duty free operators who have only just recovered from a tough year following last year’s natural disasters. Until recently, Chinese tourists were making a good comeback at Narita International Airport (shown above) and Osaka Kansai, according to comments made to The Business by several retailers and the airport companies.