Japan. Recession. Again. Yes, again.

Japan has stepped on another financial banana peel, and its economy is officially back in recession. This bummer news comes courtesy of data released for the last quarter of 1999, which showed a 1.4 percent contraction in economic output. The contraction came on the heels of a 1.0 percent contraction for the third quarter.

Japan, of course, is the Commonwealth’s largest source of tourists. And tourists–along with all other consumers–are an oft-cited element in Japan’s economic mess. The consumers aren’t consuming much, and the lack of spending drags down retail and business activity. It’s a vicious cycle in which spooked workers spend less, which makes business lousy, which sours the economy…which spooks the workers even more.

But there’s more than meets the eye with that gig. The great, invisible truth is that Japan’s government totally messed up the underpinnings of the economy. Investment capital was allocated in accordance with back room deals made by crusty inside players, in financially incestuous relationships that gave birth to mutant financial monsters.

So I don’t blame Japan’s consumers for being spooked. I’d be spooked, too. I’d also be spooked if I was involved in the Commonwealth’s tourism industry. A poorer target market is seldom good news. I say “seldom” because there are opportunities to build market share in such times, but to do so requires a clear understanding of business economics and price theory, which is not exactly as abundant as coconuts are.

There are probably a lot of ways to ponder the tourism gig, but two obvious things to pay attention to are the raw amount of tourists who visit, and the amount of money they spend when they’re here. If the Commonwealth is at the “bargain” end of the tourism spectrum, we may be comparatively insulated from small economic downturns in Japan when it comes to tourist arrivals.

But we won’t be insulated from the retail effect of tight wad consumers. If we’re a bargain destination, then our visitors are bargain conscious, price-sensitive shoppers.

Which, of course, can put a squeeze on our hotels, restaurants, and stores…unless these establishments can wage the economic battle on the price front.

What’s next for Japan? There isn’t any great news on the immediate horizon. Japan is an aging, industrial beach-stud who has put on too much fat and is too inflexible to deal with the fleet footed realities of global competition. Too much weight in all the wrong economic places, too much unsightly financial flab. The economic world belongs to the quick thinkers and fast movers. A big, lumbering industrial base with big, lumbering policies and a big, lumbering government messing with things is–and always has been–a recipe for problems in the long term.

And, for Japan, the long term has arrived. Such problems come with a whimper, not a bang.

So, for the next few months at least, it’s more of the same for Japan, and more of the same for our tourism industry.