Japan's ongoing nuclear crisis poses a unique challenge to the country's meetings and hospitality industries. With no current indication of a resolution to the disaster, triggered by an earthquake and tsunami that wrecked large portions of Japan's northeast coast, or any concrete assessment of its ultimate radiological effect, corporate buyers and executives must weigh the area's viability as a travel and meeting destination despite the abundance of uncertainty.
Business travel to Japan outside the areas directly affected by the earthquake is possible and occurring. Authorities have downplayed the risk of exposure outside a 20-kilometer evacuation zone around the reactors, and the World Health Organization is "not advising general restrictions on travel to Japan," though it suggests avoiding areas where disaster relief continues. International flights, albeit a reduced number, are arriving at Tokyo Narita International Airport. Many, though not all, hotels are open.
"The difficulty here is that it is still possible to get to Tokyo or other areas, but is it practical?" asked Jonathan Howe, senior and founding partner of law firm Howe & Hutton. "No, without knowing the penumbra of the radiation factor. It's the great unknown. If I'm a planner, for at least the next year, I'm in conversations as to what you're going to do. I'm not sure you'll be able to convince management and people to go."
At insurance firm Aflac, which has significant Japanese operations, there have been no corporate directives regarding travel to the country. "It's not really for me to make that determination," said vice president of travel, meetings and incentives David Nelson, adding that employees from the United States had resumed travel to Tokyo. "We've got about 60,000 agents in Japan and several thousand employees who we're in daily contact with. At the same time, we have our eyes and ears open to any State Department alerts and keep that in the back of our minds.
Regardless of the actual health risks, the radiological situation weighs heavily on many meeting planners and attendees. "Conditions in Japan are significantly affecting the meetings industry, because of actual conditions on the ground and because of unfounded concerns that materially affect people's willingness to travel to Tokyo," according to Joshua Grimes, hospitality industry attorney and managing partner of Grimes Law Offices. "Meeting planners need to consider their attendees and whether they would still be willing to travel to Japan and make a determination as to whether their meeting can realistically go forward."
Impact On Facilities, Contracts
Some hotels in Japan are closed or limited their operations. Hospitaliy consulting and research firm STR Global's HotelNewsNowreported that several properties in Sendai, the major city closest to the earthquake's epicenter, are not open to guests. These include the Hotel Monterey Sendai, Hotel Monte Hermana and JAL City Sendai, which all have stopped taking bookings as they assess necessary rehabilitations. Starwood's Westin Sendai also closed because of a lack of utilities in the city, though the property itself sustained no structural damage.
Closings also have occurred outside of Sendai. The Shangri-La Hotel Tokyo has stopped accepting guest and notes on its website that "bookings will resume as soon as the energy supply and normal hotel operation can and has been restored." Rooms at the Tokyo Disney Resort complex also are closed, as is the adjacent Sheraton Grande Tokyo Bay, though other hotels near the park are open with limited operations, according to STR Global.
Meetings scheduled at tsunami-damaged or otherwise closed properties could be canceled or rescheduled under contractual force majeure clauses, but events scheduled at operating hotels in Tokyo or elsewhere outside an evacuation zone around the damaged nuclear facilities probably don't have the same protection, according to Grimes.
"A force majeure event is an occurrence outside the control of the contracting parties that makes the event impossible or illegal to hold," according to Grimes. "In this situation, no credible health authorities have determined that people should not travel to Tokyo or any area outside the immediate radius of the incidents."
Grimes added that potential new developments--a significant worsening of the radiological situation that led to power or food shortages or severely reduced air service to Tokyo--conceivably could constitute a force majeure.
Still, it isn't certain hotels outside the evacuation zone would seek contractual damages should business seek to cancel or postpone meetings, Howe suggested. "They'll probably work with you to cancel the meeting and look for some future opportunities when the air clears and it's perceived to be a safe place to go," he said. "I daresay the hotels are going to be forgiving. They're pragmatic, and will want to do the right thing. The question is, what is the right thing?"
Grimes noted that it's "good business ... given current conditions" for hotels to allow meeting postponements "without liability, irrespective of contractual commitment." He added that "this is why many event planners negotiate expanded force majeure clauses into their contracts, so that occurrences that make it 'impractical' to go forward with an event also allow cancellation without liability."
A Starwood Hotels and Resorts Worldwide spokesperson said that while Tokyo occupancy is low, hotels in southern Japan currently have high occupancy as people move southward and foreign companies relocate employees and their families. The spokesperson also noted that Tokyo hotels "are prepared for airborne radiation and will be able to react quickly to any nuclear threat."
Longer-Term Concerns
As Japan's tragedy continues to unfold, assessments of the country's long-term viability as a meetings destination are likely premature, at least until the full impact of the nuclear situation is understood. Until then, though, some planners will look elsewhere.
"We certainly have proposals for Asia/Pacific, and Japan in particular, that will assuredly be eliminated from consideration," BCD Meetings & Incentives president Scott Graf told Incentive, which like The Transnationalis a Northstar Travel Media publication. "In the short term, people considering this part of the world will wonder, 'What if we have the same problem as last year or two years ago?' With so many wonderful options around the world, they may choose to look elsewhere. People will want to support the region, but there will be some period of time when that doesn't happen. There will have to be a very clean bill of health before clients will bring it up again."
Barring any worsening of the nuclear situation, however, business travel likely will continue as long as flights continue and hotels remain open. "Moving forward, it's just too important to cut back in travel back and forth to Japan," Aflac's Nelson said. "In the short term, perhaps there was a dip in travel, but in the long term it will be business as usual."
Michael B. Baker contributed to this report.
The article originally was published in Business Travel News.