Apple Holidays was founded in 1996 with the headquarters on the second floor of Plaza Berjaya in downtown Kuala Lumpur. The company started with five employees, including financial controller Alice and me. Besides, we had Ting — a tall, cheerful and diligent Foochow young lady — responsible for operations, and the marketing guy Jaya who served for 23 years until his retirement in 2019.

Back then Koh-san was still in his third year at Tokyo International University, but he was already helping us take care of Malaysian groups in Japan, making arrangements for guides and other GA operations.

In short, despite our very humble size, we operated from both KL and Japan. Business was good and everyone seemed to enjoy the work.

That was the outcome of our painstaking planning after the early misstep. And since we decided to go into this business, we had to do nothing short of the best!

First year after Apple Holidays was started, the company’s focus was mainly on wholesale B2B Japan outbound tours.

I mentioned this in an earlier article, and will therefore not go into the details here. In a nutshell, we organised full-fledged Japan tour packages which were branded “Sakura Holidays”. We set the departure dates, and purchased airline tickets in bulk from big agencies. All outbound travel agencies nationwide could be our potential clients.

Our second business was offering Japan ground arrangement services for major agencies, including arrangements for accommodation, tour buses, F&B and guide services in Japan.

Visiting Japan in 1996 could be a lot of hassle. Besides the troublesome visa application process, tour fees were not cheap. Because of that, Japan tour group members were in general quite well off economically, such as business owners, professionals, teachers and civil servants.

Our top package was a 6D4N Osaka to Tokyo Honshu island tour that also included Kyoto, Mt Fuji and Tokyo Disneyland. It was an unforgettable lifetime experience taking a 15-minute bullet train ride at 230 kph 20 years back. Other attractions were a close-up tour of an active volcano and spa. Such an itinerary remains highly popular to this day.

Having said that, we kept modifying the itinerary from time to time and incorporated thematically more profound elements, including adjustments made to unique culinary and accommodation experiences for the group members.

Of course, with improved business, we also came across a host of problems and challenges every now and then.

The biggest headache was none other than lack of operating cash flow.

In Malaysia, Apple Holidays was a tour group organiser, but in Tokyo, we were a comprehensive GA agency. The KL office did not do retail business and was therefore devoid of any direct income. As such, if our customers (from other travel agencies) joined our wholesale Japan packages, a small part of the fees would normally be disbursed only after the tour.

Additionally, some of the travel agencies which organised their own Japan tours but commissioned us to handle the GA services, there was a 15 to 45-day credit period. Because of that, we may need to have at least RM40,000 cash at hand for each tour.

Secondly, we wanted to take direct customers but our license only permitted us to do inbound or domestic tours. Moreover, we would invariably require bigger capital and might need to keep advertising, if we were to take direct customers.

As such, we can deduce that those outbound agencies having frequent and aggressive advertising campaigns are those that are really loaded, and I admire them!

In addition, if I were to take direct customers, my relationship with other travel agencies could be jeopardised.

Thirdly, due to limited funds, absence of outbound license and inability to control the availability of air tickets, all our group tickets had to be sourced from third party agencies.

Such a solution should be optimal in the short term, but may not be appropriate in the long term, as we did not have the edge in acquiring air tickets while the profit margin was tiny.

Moreover, during festive and peak travel seasons, those big agencies would never reserve tickets for us. We would end up having customers without air tickets!

As such, prospects for existing wholesale operations were very limited. From there I learned that if we really wanted to go into this business, we had to do it big so that we could deal directly with airline companies and command the market advantage.

After giving this some serious thought, I decided that I had to settle these “major” hurdles lying before us step by step first before we could have the say in the market.

Why was I so persistent in focusing only on high quality Japan tours? Well, that was my expertise and I saw lots of business opportunities there.

There was nevertheless another personal factor: wherever I was during my stay in Japan, my Japanese friends, employers, colleagues and classmates had all taken very good care of me.

Consequently, I decided that after I went back to Malaysia, I would do my utmost to bring the people of both Malaysia and Japan closer together and help strengthen tourist cultural exchanges between the two countries.

That was the time Japan’s economy and social development experienced dramatic changes and I really hoped that Malaysians would visit Japan personally and witness the country’s earth-moving transformation.

Even then, while I was still handling the Japan tour matters, I had to start looking for solutions to solve the three major problems above.

The thing is, I had to look for a Plan B as soon as possible. Whom would I come to meet at the next street corner? Would that be another crisis or opportunity?

More in the Isshōkenmei series

(Lee San is Founder and Group Executive Chairman of Apple Vacations. He has travelled to 132 countries, six continents, and enjoys sharing his travel stories and insights. He has also authored five books.)