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  • Weekend Tangent: Discovering how cheap, yes cheap, parts of Japan are becoming

    Posted by Dr. ARUDOU, Debito on October 16th, 2010

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    Hi Blog.  I just finished a first draft of an update of the Hokkaido chapter in a famous travel guidebook (tell you more later after it hits the press), and thought I’d tell you what I noticed:

    Japan is becoming surprisingly attractive for tourism.  One thing I’ve seen when traveling overseas is just how surprisingly expensive things are — like, say, dining out.  Inflation, Euro-currency-inflation, tips and service charges of ten to twenty percent, etc. have made eating in a sit-down restaurant a rather unattractive option (when traveling I usually self-cater, visiting overseas supermarkets where things are far cheaper).

    In contrast, Japan’s currency sans inflation, a stable tax regime, and deflationary prices in many sectors have ultimately kept prices the same while they gradually rise overseas. After all these years of hearing about Japan as “the place where you goggle at hundred-dollar department store melons”, it’s finally reached a point where generally speaking, it’s now become cheaper in Japan.  While travel costs seem about the same (if not slightly higher in some cases due to fuel-cost-appreciation), once you get here, you’re able to predict costs, stick to budgets, and pay comparatively less without hidden fees creeping in.

    Then look at Hokkaido, which is becoming a bargain destination.  It’s possible to get a relatively cheap flight up here (20,000-30,000 yen RT) if you plan accordingly and time it right.  Then once here (especially if you get a package tour subsidized by the Hokkaido government to include a few nights in a hotel), tourists make out.  As far as this guidebook went, just about every hotel I checked had reduced their rates (compared to the previous edition) substantially — some by half! Making them substantially cheaper than comparable hotels I saw overseas.  Further, dining out is very cheap (in Sapporo Susukino, for example, you can get a 2-hour tabe-nomi-houdai all you can eat and drink for about 3500 yen).  I can see why tourism is booming up here.  Good.  We’re no longer the poorest prefecture, IIRC.

    That said, any economy increasingly being powered by tourism suffers from two major flaws:  1) a fickle market, and 2) residents may be enjoying an income, but in general the reason why things are getting cheaper here are because people are making less money themselves.  As they say:  Nice place to visit.  Wouldn’t want to live here.  Because the resident economy and the higher-income tourist economy is by nature fundamentally different in its buying and spending power.

    I’m not speaking as an expert in any of these fields.  I just thought I’d comment on something I’ve observed over the past couple of days and open up the blog to discussion.  Anyone else noticing these trends?  Arudou Debito

    19 Responses to “Weekend Tangent: Discovering how cheap, yes cheap, parts of Japan are becoming”

    1. Bucky Says:

      Debito, yes, on the whole, I concur with your observations. The only things getting steadily more expensive are, unfortunately, the things I LIKE! (story of my Japanese life…) i.e., the weekend European gourmet goodies I need to keep my sanity.

      If only I were fonder of the stuff everyone around me seems to be eating, that looks, smells and tastes like it was scraped off a pier piling at low tide…:-(

      – You’re in the wrong country if you’re knocking SEAFOOD!! Yum!!

    2. David Chart Says:

      Probably not unrelated, Tokyo won the Guardian Reader’s Travel Award for 2010 as favourite non-European city, while Japan was second in the favourite long-haul destination category.

      http://www.guardian.co.uk/travel/2010/oct/16/travel-awards-2010

    3. James in Nara Says:

      Apparently winter isn’t the right time to go to Hokkaido, since my ticket last January was 70,000 RT from Osaka :-)

      – Look around and check out Skymark from Osaka or Kobe (I think). The cheapest I’ve ever seen is Air-Do 10,000 yen Haneda < => Chitose one way (ANA also has had birthday fares for the same). Then if you go through a travel agent, you can get free nights in hotels thrown in for more expensive fares.

    4. Marius Says:

      Food has been cheap around here for quite a while, and that is much appreciated.

      Traveling fees are acceptable as long as you don’t take Shinkansen, 300$ for a trip to Osaka from Tokyo, but the rest of what you would do as a tourist is costly.

      Like shopping.
      Add a little note of “Japanezu craftmanship” and “toradoitional” and suddenly the made in China item you’re holding costs twice as much as abroad. Unless it’s actually made here, then the price is about 4-5 times as high as it should. And when everything imported from the rest of the world is cheaper at home, what do you do?

      Or attractions.
      Example: a handsome fee to ride up HALF the Tokyo Tower, and then another handsome fee to ride the second half.
      How about ticket to a sport event, a kabuki play or similar?

      My guess is that exoticism and preconceived ideas about Japan is what makes a trip here so attractive. If anything that’s what Japan should push.

      Sidenote on that seafood point: you’ve praised the fish before on your blog. I certainly don’t mean to take a stab at that remark, I like the fish here, but I urge you to sometime try the fish around (say) Norway / Scandinavia. You’re in for a great treat. There -are- places where the fish swim in clear unspoiled water, are less polluted and tastes like a dream. Don’t tell any full-blooded Japanese that though. They know there’s only bread and meat abroad, nothing else ;)

      – I acknowledge my brainwashing. I had some resistance to eating Canadian smoked salmon, since I was sure it wouldn’t measure up to my local kaiten zushi place. I was wrong.

    5. Eyeinthesky Says:

      Very true Debito. You can get many things here cheaper, than say Guam. Rent is still high, however, and the variety of goods is still usually domestic made. The Home Depot in Guam has just about anything you could ever want, in contrast to the Home centers here in Japan. Food is getting cheaper though, but gas is still 4 times what they pay in the U.S. As you said, taxes and deflation are keeping somethings cheaper. Guam pays squat for employment but the cost of living is next to Japan. Singapore pays about 1/2 of what Japan pays but cost of living is high there also.

      – I was surprised how cheap gas was in Alberta. Edmonton was around .89 CDN per liter, meaning it’s a good 40 YEN cheaper PER LITER than Sapporo (at about JPY 132 at my no-frills gas stand). Then again, Alberta would be cheap, given its proximity to the fuel sources.

    6. Luke Says:

      Arudou San, the falling prices now are absolutely just due to the lack of money creation going on, if the GOJ has their way they want more and more fiat money and a harder life for the people. Fiat money creation is the cause of all these problems, and it’s shameful to look at a small retraction as something good, the systems still in place and it only ever leads one way, and thats to more and more inflation, while the uninformed masses are pleased that their prices are staying still, if a fair system existed with a stable static money amount, the prices would never stay still, they would constantly drop. Don’t praise a corrupt system for its few moments in between more inflationary policy that will further bankrupt and increase the wealth gap. Have you read Human Action, Arudou San?

    7. Doug Says:

      Debito

      Interesting blog post. Some of my favorite trips have been to Hokkaido. The timing of your post is also interesting considering the New York Times article that came out this weekend about Japan’s current doldrums.

      http://www.nytimes.com/2010/10/17/world/asia/17japan.html

      For better or for worse, who knows? But things are certainly changing

      Cheers

    8. JP Says:

      Debito,

      I just wrote this super long reply and then accidentally deleted it(probably a good thing). I agree that Japan has become a lot more affordable over the last 10 years with prices dropping or remaining flat. The price of a movie has not changed for as long as i can remember.

      I wanted to comment about comparing prices in different countries without putting them in context is like saying the temperature outside is cold/hot. (Compared to what?) Yes, gasoline may be more expensive in Japan than Canada, but that is only relevant if you are going to travel to that country and buy gasoline. It says nothing about the ability of the average resident of Japan/Canada to afford that gasoline. And there lies the point, comparing prices is often just a waste of time because it simply gives people the wrong impression…

      Recently, I was in the Philippines and I told someone that the minimum wage in Japan is about 750ish and he was shocked. He immediately thought all Japanese were rich. I personally don’t know anyone who earns minimum wage and is considered rich. See what I mean?

      – Sure do. Then let’s just say that prices within Japan for some things are getting cheaper compared to prices for the same things in Japan. The significant drop in Hokkaido hotel prices really surprised me.

    9. john k Says:

      JP

      Very true. However, it is not unreasonable to compare prices of items in Japan such as oil, with that of Canada. Both are developed industrialised countries. The principal difference is that all oil in Japan is imported, whereas Canada is the 7th largest producer of oil in the world. So, that is where the equation breaks down.

      So comparing the price of oil in the Philippines with that of Japan would be more reasonable, since any oil exporter is not going to subsides the country it exports to just because it is a “lesser” country. Only the Govt of said country will/would do that.

      Marius

      I agree. Not all the seafood in Japan is the best. The crabs here are most certainly inferior to where I used to buy them in the UK. They are ‘spider crabs’ here too…not as tasty too. Spider crabs are thrown back in the UK!

      Unfortunately for me, some 90% of my revenue is paid in Sterling from my clients overseas. So whilst everyone is saying how much cheaper Japan is getting, I’ve gone from 250 yen to the pound to 130, thus more expensive for me. So my views shall be somewhat different!

      The thing I find most odd with purchasing “basic food items” in Japan is that they are pretty much the same wherever you buy them.

      If I go to a locals ‘farmers market’…the veggies/fruit etc are all served up in those small plastic bowls, with the fixed price I go to Co-op…same number of items, just packaged in plastic bags, basically same price. I go to another dept store…same again.

      It is like there is one hug cartel all over Japan, to keep the prices high. Since go anywhere else in the world, you’ll always find some person somewhere who spots a niche in the market and sells their wares for less. I have yet to find that here. I have yet to find goods that are not much more than a few % different from a backyard garden seller to a decent dept store. So, where is the competition and thus, where is the engine that drives the economy?

      Where some items are perceived to be cheaper, I see it as subtly less is being sold (say 4 apples instead of 5), or the wares are inferior (older ie at sell by date). Thus I don’t see any change at all.

    10. Level3 Says:

      John K,

      I assume you haven’t discovered the restaurant-supply food shops, like Gyomu-Supa, or A-Price, etc. Usually no fresh food, but tons of cheap frozen, canned, etc. foods. Or the discount supermarkets (like Super Tamade in Osaka) that have no pretentions about imported food. These places would probably be selling even cheaper, but the price-fixing of domestic foods means they don’t have to drop their prices too much yet still keep a strong customer base.

      Of course, shopping at places cheaper than your local supermarket does solve the quandry, “Why is eating at a cheap restaurant in Japan about the same cost as buying the ingredients at my local supermarket and cooking for myself?”
      Of course there’s the economy of scale, but also it’s because the ingredients in your food, from veggies to fish to sauces, at a cheap restaurant (and likely many expensive ones as well) are all super-cheap frozen imports from China, Thailand, etc.

      Too bad Wal-Mart isn’t doing so well here with their purchase of Seiyu. Give it time. Much as people love to hate Wal-Mart, it sure does make life more affordable, especially for people who don’t have time to whine about how evil Wal-Mart is while sipping $5 cafe lattes.

    11. john k Says:

      Level3

      Yes, I have discovered those, have 2 of those types near me. Some things are worth buying there, like Olive Oil and large bags of Pasta, but few and far between.

      Sadly, for me at least, most of the produce sold is not what I would consider good quality. Most of the tinned stuff for example, full of E numbers and chemicals. It is cheap yes, but no flavour and not healthy.

      Same at Costco…the main brand they use Kirkland, full of chemicals and E numbers…and lately GMO’s too.

      Although they do seem to have some half decent frozen meat!…pity I end up itching and scratching after eating it, full of chemicals again!

      I still cannot understand, even when it is in “season”, certain food products are still relatively expensive. How can it be that when tomatoes, for example, when in season in the UK are about 20yen per kg. But here, I’m lucky to buy one tomato for 50yen.

      I don’t mind paying for quality food…but when the cheap nasty stuff is not that cheap….what is wrong??

      The classic cheap Izakaiya’s …their food is so sweet to mask the bland tasteless ingredients. Anyway…enough of rant!

    12. JP Says:

      John K,

      I am not clear on how being an “industrialized country” has an effect on gasoline prices, but yes you bring up a good point. Canada has oil and Japan imports it, and oil futures are traded on an international market so that lends something like oil/gasoline to easier comparison. BUT, I think what is more relevant to consider here is the perception problem. Most Japanese commute to work using public transportation, which is covered by there employer, and the ones that do drive go shorter distances than in Canada. Most Canadians commute by personal vehicle. The Canadian would need to be told this in order to properly understand the price difference and its place in the market. if not the Canadian is going to think “how can those Japanese afford such high prices, the must all be rich”.

    13. sendaiben Says:

      Hi John K,

      I find the local greengrocers (yaoya) are incredibly cheap compared to supermarkets, etc. Often less then a tenth of the price, although of course they only tend to sell things that are available locally and in season.

      Great for stocking up on vegetables though.

      The meat guy http://www.themeatguy.jp/ is good for meat, although a bit expensive.

    14. john k Says:

      sendaiben

      You’re bloody lucky. I wish i could…..those guys even on the side of the road in the middle of nowhere, one would images nice cheap fresh seasonal produce….nope, well cheap that is, seasonal yes (which i like anyway). These guys sell much higher than i can buy in Co-op!….why, no idea??? :(

      Thanks for the meatguy link..i saw that on another thread last week too, looks ok. I’ve just ordered a nice leg of lamb for roasting….hope it’s worth it. Place in Hokkaido i last orderd lamb from wasnt much cop :(
      (I’m lucky, i have a real proper oven).

      His chickens, small but cheap for what you get…and those meat pies look yummy too.

      – Back on topic please.

    15. TokyoZeplin Says:

      One thing you’re forgetting though in this, is that the Yen is currently extremely expensive, both in Euro and my own Danish Krone. What you said would have been much more correct 2-3 years ago, where the Yen is weaker. As it stands right now, it’s around 70% more expensive to go to Japan right now, than it was 3 years ago, due to the strength in the Yen (for Europeans at least).

    16. Steve Says:

      Good point, TokyoZeplin. For those of us inside the yen economy, prices have noticeably declined. But for people with foreign currencies, the prices are probably about the same or even higher. Every month my Social Security payment from the U,S, has been getting smaller in yen terms. And, over the last year at least, the decline in the value of the dollar is much faster than the decline in yen pricing.

    17. D.B. Cooper Says:

      For anyone who, along with #10, is tempted to welcome Walmart with open arms just to save a few yen, I suggest watching this first ‘Walmart:The High Cost Of Low Price’
      http://video.google.ca/videoplay?docid=-3836296181471292925#

    18. Getchan Says:

      Where did you get the idea of a “Euro-currency-inflation”??
      Don’t confuse inflation with the exchange rate, which dropped sharply in spring thanks to Greece cheating its way into the Euro zone.
      BTW, sending money from my German postal giro account to my Japanese postal giro account costs exactly EUR 1.50 (less than 170 Yen). The other way around is a tad more expensive…
      And I dined out with my girlfried in Germany for a little less than 2,000 Yen – for both of us. Just like in Japan, you need to know your way around – which saved me 40% over the quote I got from Japan’s leading cheapo travel agency for a rental car, and I paid 6,500 Yen for health insurance for a month compared to 8,000 Yen for two weeks quoted by said agency… ;-)

      – I’ve heard (and experienced for myself) just how the combining of various European currencies into the Euro made local prices go up in Euro terms. That’s what I meant by Euro-currency inflation.

    19. Getchan Says:

      That was basically eight, almost nine years ago… ;-). How much would prices have risen in Deutsche Marks, French Franks or Italian Liras sind 2002??
      People tend to forget / overlook, that the old currencies would more likely than not have experienced higher inflation rates than the Euro has now. In 2002, when Euro cash was introduced, some businesses played around with prices, (ab)using consumers’ unfamiliarity with the new currency and its exchange rates, especially in countries where converting old currency vs. Euro wasn’t possible without a calculator.
      And renting an apartment in Berlin is still cheaper than renting one in Sapporo, let alone Tokyo… ;-)

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