David

Founder
Okinawa.Org Staff
Just a little memory I had as I look back on the economic impact of the novel coronavirus in Okinawa versus three entire months confined to my barracks room and work duties on lockdown... everyone then—by everyone, I mean the Lance Corporal Underground and everyone else that has no idea about even basic economics, to include my naïve self—said that we were the cornerstone of the Okinawan economy, just like many still believe today.

In times like this, it really puts things into perspective on how little impact SOFA truly has on the Okinawa economy. Everyone always parrots that Okinawa will fail without the military. Truth be told, something you learn when you cross over to what could be greener pastures for you and reside in Okinawa: real-estate would keep moving and the economy would be just as strong, if not stronger, without a U.S. military presence in Okinawa.

The recent COVID-19 epidemic in Japan and Okinawa backs this little theory of mine up that SOFA is just a blip on the radar in the full picture of the economics here.

After the Mayor of Naha, as well as other high ranking officials in the government of Okinawa, urged citizens to not go out unless necessary, some shops on Kokusai Street have seen a 30% dip revenue over the previous month. Furthermore, we're only half-way through this month and only on our second day after those announcements were made.

No lockdown or period of mourning coming from III MEF had as close of an impact on the economy as the COVID-19 panic is right now. There are some exceptions, though. Those might apply to businesses that solely relied on SOFA customers who had to close early or not open on certain days because their chosen demographic were Americans, primarily being SOFA. However, these were generally bars and clubs.

Nonetheless, a bar or club owner should be able to target all demographics and not rely on any specific one for their revenue.

I've been in Okinawa through many "periods of mourning" and lockdowns, to include personally being on a 3-month lockdown myself. While the importance behind them is to show respect for victims involved, there are still victims behind being affected as people need to make a living as well—the business owners.

I suppose where I'm getting with this is that once you pick a niche or something you do, perhaps joining the vast Okinawa photographers even, you must select your demographics to balance out your situation.

I'm not a legal guru in the military. Though, you need to ask yourself: would a lockdown where you couldn't visit certain places, such as the extended one that I was on after the 3-months which excluded Kokusai Street, have an impact on you? Would you be able to pick yourself up and turn to something different to continue making money, such as processing old photos and uploading to stock sites such as Shutterstock or Adobe Stock?

These are some very important questions to ask yourself while you're narrowing down your business in Okinawa. You should always have a plan in place where if something happened, you could always turn to another plan to continue off where an instance would have little to no impact on your life and making money.
 
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rad33

New member
Thanks for sharing your thoughts David. I live in an area of Vancouver which is known for its high population of Chinese immigrants and businesses have definitely been taking a big hit since the outbreak of the virus, with some restaurants even closing down due to lack of business.

No now that we have bought our plane tickets to Tokyo and are finalizing the details of our move to Okinawa, the looming shadow of coronavirus seems to be stalking us whenever we go, mostly by the dire warnings we are getting from family that reside in other parts of Asia.

Being in the hotel business, we have also seen a drop in occupancy which coupled with an already soft market has made it challenging to meet the lofty budgets that our upper management had prepared. Of course being a big hotel chain helps a lot when being able to absorb the impact of disasters, economic downturns, disease, etc.

It is our dream to have our own business one day in Okinawa and it's a tough lesson but being able to observe how businesses react and persevere during these times is important if you want to be successful at it one day. At the end of the day you never know what may be around the corner so being prepared and vigilant and being able to adapt quickly is what we all need to be able to do.
 
OP
David

David

Founder
Okinawa.Org Staff
with some restaurants even closing down due to lack of business.
This kind of reaction is a little over the top. I've also been hearing of instances where Uber drivers, just because of their decent, are being turned away in fears of the spread of coronavirus when it's...
mostly by the dire warnings we are getting from family that reside in other parts of Asia.
...well contained to areas like this, for now. There's really no fear to panic about COVID-19 outside of Asia, until the cases start springing up. I think that it might just have been contained in time to prevent a pandemic.
Of course being a big hotel chain helps a lot when being able to absorb the impact of disasters, economic downturns, disease, etc.
This, although being rebutted for my opinion, backed up by a theory connected to tourism statistics, was the point of this post about doing business in Okinawa.
but being able to observe how businesses react and persevere during these times is important if you want to be successful at it one day
The rebuttal was from the same person with the school of thought that SOFA, even though 100,000 in total (unsure of how many actually rent off base), has such a huge impact on the economy. They don't. They might have a short-term impact on the real estate industry.

However, once they're moved out and it's finalized, those places will sell like hotcakes and the owners will make even more than what they were initially purchased for.

In 2006-2008, it was always spread around that we have such a huge impact on the local economy. It seems that same sentiment is being passed around today with the person arguing, much like in the 3-month lockdown, that bars closed, Philipinos lost their jobs and so did Japanese, alluding to them being all in one industry targeting one market only: the U.S. military.

While some clubs and bars did close, had they adapted the entire time serving both clientele, they would have been able to ride it out. There were a couple of bars that took a hit, but it wasn't right to the groin as they opened intending on serving both customers and only took a small dive when the 3-month lockdown happened.

I'm sure a lockdown hurt their bottom line a bit, but, they could make it through as they knew the market here—it's the local economy, tourists, and SOFA, with the latter being of the least importance, unless you open a bar, or in your case, hotel solely to serve the U.S. military and their dependents, which would not be wise.

You should diversify your demographics so you don't need to rely on any one group. In the travel and tourism industry, it's somewhat hard.

For the sake of it, as everyone starts somewhere, say your income was from AirBnB: you could just cancel the Chinese reservations and make local and mainland Japanese discounts to at least fill the room at a lower margin and ensure the income still flows in.

I think you understand what I meant about this without having to go much deeper. It appears the person who had a disagreement with me that SOFA personnel matter in the bigger picture here blocked me as opposed to coming here to present their statistics and facts to back up the way business ought to be conducted in a foreign country and that relying on temporary guests, which can be locked down or even deployed at any notice, is a wise decision to make.
 
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David

David

Founder
Okinawa.Org Staff
"There is also a misperception that Okinawa’s economy is dependent on U.S. military bases; if anything, the excessive number of U.S. military bases has hindered urban development and the promotion and development of local communities. "“Okinawa promotion budget,” a misleading name
Very interesting read prior to drawing that conclusion.

I particularly liked how they covered that the maintenance of Naha International Airport is included in the budget because it is operated by the Japanese Self-Defense Forces. This is important to note because there is talk of turning Futenma over to just operate as a JSDF base. If that were true, the allocated budget could decline at the same time the budget could decrease all while strengthening the economy through privatization of the airport. While privatization is something new for airports in the US, where there is only one to be exact, it's nothing compared to the UK where they are quite bustling and profitable.

The pendulum shift alone by allowing JSDF to operate on Futenma and not operate at Naha, where conducting drills can cost airlines thousands of dollars per your source, could promote that urban development even more and propel Okinawa out of the "group E" that it's in.

Talk about JSDF moving to Futenma aside and Naha having two runways to operate on now would only strengthen the argument that Okinawa could grow more with the lower half being centralized to the lower half of the prefecture, as mentioned, due to more urban development occurring.

I believe that it's a poor decision for any business owner to rely on the military for any prolonged period of time as a source of revenue. The model is just not sustainable, be it real estate (get stuck with a hefty loan that can't be repaid because you can't pay that mortgage any longer) or restaurants serving to the American palette only.
 

BBZ

saltwater addict
Founding Member
These are some very important questions to ask yourself while you're narrowing down your business in Okinawa. You should always have a plan in place where if something happened, you could always turn to another plan to continue off where an instance would have little to no impact on your life and making money.
IMO the only way to be successful in business here is to cater to all parties (locals, Tourists, and Military) excluding any of them will harm you later on. In addition, call me crazy but I think the bar scene is done, sure there will always be a little money to be made but it's limited and I see society turning away from alcohol consumption with e-sports becoming more and more popular drinking is taking a backseat. Then again this is only my opinions and is always open for adjustments
 
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David

David

Founder
Okinawa.Org Staff
IMO the only way to be successful in business here is to cater to all parties (locals, Tourists, and Military) excluding any of them will harm you later on.
Exactly the way it should be done. Just like with investments, your demographics should be just as diversified so you're not counting on a specific group or niche that can go out of fashion even the next week.
call me crazy but I think the bar scene is done
I wouldn't call you crazy because you do have a valid point. From leaving the military in 2008 to now, I've seen leadership really cracking down on how alcohol is viewed. It used to be a norm back in the day, but now, it's frowned upon more and more.

However, I do have to point back to this:
cater to all parties (locals, Tourists, and Military)
If you're catering to locals, you would know that it's societal in Japan to drink. It's also culturally acceptable, with children even being allowed in bars until 10 PM (or if the owner lets you past that time). However, it's one or two drinks: not ten to twenty.

Priced just right, in a good atmosphere with something else to offer above just drinking is still a solid business to run in Okinawa. Furthermore, I'd offer awamori as an option along with beer (red eyes too) and mixed drinks so you can target the locals more.
e-sports becoming more and more popular drinking is taking a backseat
This is really something new to me, I will have to do more research into this. But isn't this like picking a team with other friends and playing fantasy football, baseball, etc. or is it something else? If it's what I'm thinking, it could very well fit into a bar setting, provided the bar has the proper equipment to host events. Sports and drinking seem to fit very well in almost every culture.
Then again this is only my opinions and is always open for adjustments
Very good ideas; these are only my thoughts as well and are meant to be taken with a grain of salt.

The purpose of this thread is to just point out how damaging it can be to your business if you just focus on serving one customer. If that customer is to disappear for whatever reason, then you're left running around like a chicken with its head cut off if you're not able to identify another area in which to target or adapt to.

Over my time here, I've seen a club get put on the unauthorized list for base and it heavily relied on base in order to operate. At the time, there were other clubs that switched from serving Americans to Japanese on certain days, with changing their full nomihodai (all you can drink) menu from the typical mixed drinks like screwdrivers and rum and coke to awamori and beer. So, there really was no reason for it to go completely under. However, it might've needed to close some floors (I believe it was 7 floors with all different experiences on each) because there is the fact that Japanese women do seek American military out and they would lose that particular demographic, but, they could've adapted and still profited nonetheless.
 

BBZ

saltwater addict
Founding Member
The purpose of this thread is to just point out how damaging it can be to your business if you just focus on serving one customer. If that customer is to disappear for whatever reason, then you're left running around like a chicken with its head cut off if you're not able to identify another area in which to target or adapt to
yes, that's what I am trying to say only I'm adding into it even without restrictions drinking is losing its appeal. 20 something Okinawans do not drink half as much as their older peers did just 15-20 years ago, the things that are popular now require a working brain, alcohol slows you down, hence the reason energy drinks are so popular. Like I said bars, clubs will always make money simply because of the large profit margin, but there are many more and better ways to entertain and make money that is actually positive and community binding so to speak. Anyway I guess you can break it down an to a difference of opinion but with the right cross of businesses, one is making while the others sit idle for various reasons.
 
OP
David

David

Founder
Okinawa.Org Staff
20 something Okinawans do not drink half as much as their older peers did just 15-20 years ago
I suppose another facet that Expats looking to start their business over here is distinguishing between trends as well. This quite well could be the case, but, there are always going to be those that stay and want to remain in the party lifestyle. As for them, I wish them all the best. And with what you stated, it may be that they only get a couple of years out of it: it's up to them to decide whether those couple years are going to just be sustainable or allow for a better future.

There are plenty of other businesses out here that are both, without liquor. However, I see a cultural disconnect with quite a few. I think, in the long run, and if they want to remain here, Japanese proficiency is a must (and I'm not one to talk about that either) as the English market could disappear with the drop of a pin.
one is making while the others sit idle for various reasons.
I would say so myself. If one is to open a bar or a club, that real-estate is only paying for itself throughout the night and peak days. It could be used every other day of the week as well, with a few modifications, making it a cafe that everyone can enjoy.

I'd, however, recommend steering away from that market as you suggest too altogether; I've seen so many come and go so quickly. There is so much that you can do out here with tourism as well as the local market that doesn't have to fit that lifestyle.
 

Monkeyshine89

New member
I'm with BBZ. Although I think the military has a stronger effect on the economy than is reported it's not nearly as much as military and military associated people believe it to be. I think local residents working on base is far more important than whether or not military members can shop or drink. Entertainment is certainly a large sector but not nearly as large as lets say real estate or medical which the military community has little influence except for a few select areas.

But yeah it's very annoying when I hear young men (it's always men fancy that lol) complain about how lockdowns are DESTROYING the local economy. yeah right lol
 
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David

David

Founder
Okinawa.Org Staff
But yeah it's very annoying when I hear young men (it's always men fancy that lol) complain about how lockdowns are DESTROYING the local economy. yeah right lol
The greatest thing to ever hear someone complain about lockdowns affecting the economy from people who haven't even taken an introduction to economics, let alone know how to balance a checkbook.

That land Futenma is sitting on is a goldmine. With it, Okinawa's economy could explode. Ginowan would turn into the 2nd largest city (if it isn't already) if they develop it just right and quite possibly the largest per capita.

That land alone would definitely replace the potential negative implications to the economy in the long game. Returning northern US-occupied land has almost no economical benefit to Okinawa, except that Okinawans get their land back, which is still good. One tsubo at a time...
 

Monkeyshine89

New member
That land alone would definitely replace the potential negative implications to the economy in the long game. Returning northern US-occupied land has almost no economical benefit to Okinawa, except that Okinawans get their land back, which is still good. One tsubo at a time...

lol I know right? With camp Gonsalves being returned it's like... thank you for this uninhabitable jungle that is now full of ammo and morters and bombs and such.
 
OP
David

David

Founder
Okinawa.Org Staff
lol I know right? With camp Gonsalves being returned it's like... thank you for this uninhabitable jungle that is now full of ammo and morters and bombs and such.
Yeah, it's not like that area will be turned into a Disney Land anytime soon. As soon as they dig an inch they'll find unexploded ordinance, to include ammo round(s) which could be (1) single small round, which will still delay the project an entire, what, week? The land is worthless until it can be fully surveyed, and until then, it still is until they begin construction because it seems like every time a new project starts, it's delayed because of something being found... even as far south as Haebaru!

Just recently, too, off the coast of the new airstrip, I want to say they found a 500-pound bomb and it messed up scheduling for an entire morning—very costly (but has to be done for safety, of course).
 

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