Hasta La Gadget!

If reports are to be believed, Japan’s deflation is in terminal velocity and consumer spirits are at an all-time low. I’ve personally seen my fair share of 80-yen and 100-yen vending machines but the NY Times claims to have witnessed even lower. What could be next?

When some months ago I first heard about a website selling plans at traditional rural ryokan inns for 100 yen (about $1.20), it might have been easy to pigeonhole it with the same economic trend. Now the ToCoo! (a pun on toku, meaning “good deal”) site has a category for luxury hotels, also offered at massive discounts (sometimes up to 80%) for a night and the downward trajectory can surely be condemned as endemic.

There isn’t really a catch to these plans, either. You can simply stay for 100 yen, 109 yen with tax. In fact, sometimes that is the price for two people, and there are even plans where you stay for free and — forget paying — you are given 109 yen by the hotel for your troubles!

But is this something to be worried about? No doubt there is a lot of marketing acumen that can be acquired by a 99% discount: you get in the news, you attract new customers and so on. Perhaps the hotels are desperate and so lacking in guests that they will do anything to fill the empty rooms. Likely it is a very limited strategy that some hotels are trying and won’t feel the need to continually offer near-free nights on ToCoo!

Indeed, more than deflation this blog has reported this year on the gentrification and luxury-branding of certain consumer services up to then seen as the low-cost option, such as designer capsule hotels and quality nightbus routes for females. It could be argued they are trying to capture consumers who can no longer afford nice hotels or the bullet train, but surely the services are more sophisticated than that. They are trying to do wholly new concepts with their industries and this should be given more credit. They are certainly not in the same field as fast retailing and the ever-cheaper bowls of gyudon at Yoshinoya.

Developments like ToCoo! might be a sign of despair, a cheapening of consumer tastes. Or rather they can be embraced as exciting new services, much like the plethora of Groupon clones that have flooded the Japanese market this year.