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October 2008 – Travelzoo is a global internet media company. Founded in 1998, it listed on Nasdaq in 2003 and began its global expansion from 2005. Headquartered in New York, Travelzoo set up its first international office in London in 2005 and expedited its expansion into the rest of Europe and Asia Pacific from 2007. With more than 12 million subscribers worldwide, Travelzoo publishes travel deals from more than 900 advertisers.

In September 2007, Travelzoo established its Japan office. JETRO spoke with Jason Yap, Travelzoo’s executive vice president for Japan, Australia and Singapore, about opening the Japan office and working with JETRO during the process.

Opportunities in Japan
Travelzoo’s decision to take its business to Japan came from its desire to be a truly global company. After expanding to the U.K in 2005 and during its expansion to the rest of Europe and Asia Pacific in 2007, Travelzoo opened a Japan office to seek market opportunities that Yap said the company could not pass up. “Japan is the second largest economy in the world,” said Yap, “we cannot consider ourselves to be a global company if we are not here. We just have to be here.”

Market Entry
To establish the Japan office, Yap first hired a recruitment company to search for a qualified country manager to head the business in Japan. Afterwards, the rest of the staff was hired through the recruitment company and the existing contacts and network of the country manager. Yap noted that the staff was hired at a slight premium. “In order to attract good talent and because we are not yet a known company in Japan,” shared Yap, “we pay slightly more than the market rate.”

Many companies hiring employees in Japan have found it challenging to find technically qualified people with fluency in both English and Japanese. But Yap says to keep looking. “Yes, it is a challenge to find people with technical knowledge who are effectively bilingual, but you just have to continue striving to find the right people.”

While searching for its country manager, Yap also began working with JETRO San Francisco to evaluate the opportunities for entering Japan. After an initial consultation with JETRO San Francisco, Yap and his team settled temporarily into the office space provided by the JETRO IBSC to qualified companies for a limited period of time. Yap also received from JETRO recommendations for a human resources consultant and a list of accounting companies to support the Japan business. Yap recalled that it took two months or less to start the business from initial contact with JETRO. “We were determined to start an office in Japan quickly,” said Yap. “JETRO made it a lot more convenient.”

Advice
When asked what advice he would give to other companies beginning business in Japan, Yap advised not take the cultural aspect of Japan over seriously. It is important to accept and respect the market.

Looking back, Yap said he might have taken the cultural aspects of Japan more seriously than he needed to. “Japan is now very different from the Japan that most people know from 10-15 years ago,” said Yap. “The younger people are now more open minded and more accepting to new ideas and other corporate cultures.”

At the same time, the cultural aspects of working in Japan may be overwhelming for someone who has never worked in, or started a business in, a country with a different culture, said Yap. At the end of the day, he said it’s important to use logic while conducting business and to show respect to the market in the way one would like to be respected. By ‘respect,’ Yap means, “not being overly aggressive for one’s own gain. It is important to establish trust. And trust takes time to build. Don't rush it. As long as you have a long term view of business in Japan, you should be fine,” he said.

Elaborating on this point, Yap said, “Japan has its way of processing its business to get something done. And that’s not exactly a way that is very well understood by foreigners, particularly ones from the U.S. Japanese workers tend to want to build a strong foundation before building growth. But growth will be rapid once they arrive at a comfort zone, which is where the tipping point is. Most people misunderstand that for inefficiency.”

Results and Outlook

Since starting the business last September, Travelzoo Japan has begun to see revenue, employs 12, and has an audience of 300,000. The company has worked with some of the largest travel companies in Japan, including H.I.S., JALPAK, Kinki Nihon Tourists, the Tokyu Group and so on. Travelzoo Japan has also worked with Twentieth Century Fox in Japan in a joint promotion for the movie What Happens in Vegas, starring Ashton Kutcher and Cameron Diaz, sending Travelzoo’s subscribers to the pre-premiere screening and movie premiere in Japan, and on a vacation to Las Vegas.


Travelzoo Japan website

For the future, Yap expects Travelzoo Japan to be a big revenue contributor to Travelzoo’s overall revenue standing, saying, “Japan is after all, the second largest economy in the world.”