The "Go To Travel" government subsidy campaign to boost Japan's domestic travel industry amid the coronavirus pandemic is going off the rails.
The program provides discounts of up to 35% for accommodation, but some reservation sites recently began severely paring back that discount. The apparent cause: Some travel operators were in danger of running out of subsidy funds disbursed through the Go To program, due to a surge in demand after Tokyo was added to the program at the beginning of October.
However, the discounts were slashed with no prior notice or explanation, leaving consumers and lodging operators in confusion. The decision to reduce the discounts was apparently implemented with nary a thought for the people actually using the system.
In response to the critical firestorm, tourism minister Kazuyoshi Akaba has announced that the government will top up Go To disbursements to travel operators. In fact, the government has set aside over 1 trillion yen (about $9.49 billion) for the travel subsidy program, only about 7% of which has been used to date. At risk of understatement, there is some budget leeway.
The government could have prevented the issue if it had grasped the discount funding shortfall in advance, and been nimble enough to nip it in the bud. It's management of the program was negligent, and for that it bears serious responsibility. The Go To campaign's operation should be reevaluated.
The authorities have a duty to examine how the program budget is being used, and what are its outcomes. We cannot condone leaving the entire operation to the executives of the private firms on the receiving end of the subsidies.
Additionally, for the travel subsidies, it has been pointed out that users are inclined to stay at luxury accommodations, as the real yen-value of the discounts is much higher for them, and that the system funnels its greatest benefits to high-income earners. Leaving small and medium-sized businesses out of the Go To program severely limits its effectiveness in helping boost local economies. The government needs to build a policy to promote stays at cheaper inns and hotels as well.
On a related note, improper use of the government's "Go To Eat" system -- Go To Travel's sister program to boost the restaurant sector -- continues unabated. If someone makes an eatery reservation through an online reservation site, they can get a discount coupon applicable to the next reservation they make. However, some people figured out that you could get something cheap at the first establishment and then receive a coupon worth more than their order.
On top of its usual costs, the restaurant must also pay a fee to the online reservation site. If people keep ordering low-price menu items using Go To Eat, restaurants could actually start losing money on the scheme -- quite the opposite of the program's intent.
Public funds are being used for these schemes, and so they must be implemented fairly and impartially. The systems' primary defect, that it shovels the lion's share of the benefits to a limited few consumers and businesses, must be corrected immediately.