It was almost departure time, but Kazuhiro Nakagawa’s 55-seat tour bus still had that “Not in Service” look as it sat outside the Wilshire Grand Hotel in downtown Los Angeles.
Slowly, a handful of passengers assembled: two teenagers from Altadena, a frugal twentysomething couple just back from Israel and a 19-year-old German woman touring the country.
A few years ago, Japanese tourists paid Nakagawa $10,000 each for whirlwind tours of the Western United States on his luxury bus. With that market ruined by the sour Japanese economy and the lingering effects of the Sept. 11 terrorist attacks, Nakagawa sought a new niche running a nonstop luxury bus service from Los Angeles to San Francisco, $40 one way.
Nakagawa envisioned his bus filled with businesspeople eager to avoid long lines and delays at airports. Concierges at swanky hotels would steer customers his way.
But jeans and backpacks were more common than Armani and laptops as the passengers boarded the other day, and most had learned of the service by prowling the Internet.
Sometimes, there aren’t even enough travelers to warrant the use of a bus, and Nakagawa trundles his customers to the Bay Area in a 1998 Ford Aerostar minivan.
Another California businessman might have watched the scene with despair and concluded it was time to get out of the tour bus game -- like so many others have done in the last two years.
But Nakagawa, 57, offered each passenger a smile. He bowed and thanked them for using his service. It was what his grandmother, Misano, and other ancestors would have done.
“Even a weed blossoms. My grandmother would bow, clasp her hands together and say ‘thank you’ for that blossom,” Nakagawa said. “These things gave me character.”
Nakagawa is on his latest cycle of building character. Like many immigrants who have known adversity, he knows only one answer to economic downturns: work harder.
In 2000, more than 1.1 million Japanese travelers spent an estimated $1.2 billion in California. Last year, the visitor count was down to 653,000, and they spent $733 million, according to state figures.
California tourism officials blame much of the falloff on Japanese travelers’ fears of another terrorist attack. Officials did not expect those fears to persist two years later. Neither did Nakagawa.
“In Japan, we have a saying: ‘Bad memories only last for three months.’ We figured by the end of 2001, people would gradually start to come back, but that never materialized,” Nakagawa said.
Nakagawa started his company in 1979, paying $14,000 for an old Greyhound bus with more than 500,000 miles on it. Over the years, he built the firm into an enterprise with 24 buses, nearly 200 employees and $36 million a year in revenue.
Now he is almost back to where he started: two buses and three employees, and no guarantees he’ll book enough passengers to pay the fuel bill each month. He sold his four-bedroom home in La Canada Flintridge this spring, and no longer has the savings to pay college tuition for his son and daughter.
Some friends and colleagues say Nakagawa is like a prizefighter who stays in the ring when it would be smarter to take a 10 count. As Japanese tourism ebbed after Sept. 11, he delayed selling his buses. That cost him dearly, as he was forced to unload his fleet into a market glutted with the vehicles.
But Nakagawa hasn’t lost his ability to persist.
“He’s not the kind of person who gives up,” said Cathy Wong, 45, his longtime office manager. “I’ve come into the office and could see that he had slept on the floor. He hadn’t gone home.”
Nakagawa points out that his parents and grandparents endured much greater hardships than he. His mother lived through the atomic bomb at Hiroshima, giving birth to him a year later. His grandparents, who had moved to the United States before the war, endured internment at a Japanese relocation camp.
“They never quit. They never gave in. They never blamed anyone else for what was happening to them,” Nakagawa said.
A former electrical engineer at Hewlett-Packard Co. in Silicon Valley, Nakagawa moved to Los Angeles in 1979 and started his firm with the old Greyhound, ferrying Japanese tourists to Disneyland. He served as owner, manager, driver and mechanic. His wife, Kazuko, took care of reservations and the books.
Nights were spent tinkering with and repairing the breakdown-prone vehicles. He’d catch up on his sleep in the Disneyland parking lot while his customers rode the Matterhorn.
By 1984, the business had prospered and Nakagawa geared up for the Summer Olympic Games in Los Angeles, expanding his fleet to 12 buses. But the tourists stayed home, and many Angelenos, fearing gridlock, left town. Nakagawa filed for bankruptcy protection.
Ashamed at his failure, Nakagawa emerged from Chapter 11 reorganization in 1988, having negotiated with a bankruptcy attorney to pay his creditors in full. He vowed never to go that route again.
By the 1990s, he had rebuilt his business. His top-of-the-line service was a 21-day bus tour that took visitors to natural wonders such as Yellowstone National Park and Arizona’s Monument Valley, as well as the locations for movies such as “Close Encounters of the Third Kind.”
“He was a real sharp businessman. He was always looking to the future years,” said Mark Yoshimura, a former executive with Japan Travel Bureau, that nation’s largest travel agency, who now is in charge of international tourism activities for the Los Angeles Dodgers. “He had several different divisions. He was also running daily tours.”
At its peak, the business was generating more than $3 million in revenue each month. Then came 9/11.
“On Sept. 13, two days after, I had $35,000 in business left. They were afraid to come to the U.S. They canceled everything,” Nakagawa said.
By this spring, Nakagawa had laid off everyone but Wong and two drivers, and was nearly $1 million in debt. He sold his hillside house and rented a smaller home nearby. He was forced to vacate his office in downtown Los Angeles, moving into free space provided by a friend in a City of Industry office park.
“No one in my home has complained about the money,” Nakagawa said. “My wife, Kazuko, has a right to complain and she doesn’t. I come home at night and the piano is gone, other things are gone, sold and no one complains.”
But this second disaster with tour buses ate at him. “I almost lost the desire to live. I thought I was a very bad businessman, but I owed so much money. I needed to pay those people back before I stopped,” Nakagawa said.
It was that obligation that put him behind the wheel of his blue-and-white Aerostar.
He drove to Los Angeles International, Burbank and Ontario airports and interviewed travelers, finding several who were tired of the long waits, luggage searches and stress of flying. He visited the Greyhound bus station near downtown and found riders uncomfortable with the dingy surroundings.
Nakagawa saw an opportunity: a nonstop bus between L.A. and the Bay Area, one that would shave hours off the Greyhound times and offer an alternative to the hassles of post-9/11 air travel.
The entrepreneur launched his shuttle service in April. The same month the Nikkei index in Japan hit a 20-year low.
Give up? Not a chance.
“When he fails, he works harder. He is never satisfied,” said Morihiko Iritani, 64, who used to work as a travel guide for Nakagawa before his job was eliminated.
Nakagawa’s 21-year-old son, Keisuke, said his father drilled into him the same never-say-die ethic when he took up basketball as a youngster.
“I complained to him that I wasn’t very good,” said Keisuke, a senior at Cornell University. “He said that I wouldn’t be good at anything unless I tried very hard. So, I practiced three, four hours a day and I made the school team. Whenever I go through a challenge, I know if I work really hard, I will have a good result.”
It’s not clear yet whether the shuttle service will succeed. Nakagawa figures he needs eight passengers to break even. Often, he doesn’t have the eight.
Lately, however, there are signs that things are picking up, Nakagawa said. Recently, he had 12 passengers. Over the Labor Day weekend, he had 20 passengers on one trip, including several elderly people who said they still were too troubled by the stress at the airports.
“There is a need for this service,” he said recently from his spartan office.
Renn Don Liang, chief executive of a small information technology company in the same building, provided Nakagawa the space. Liang figures the bus operator eventually will be able to pay him.
“He has a good heart and a very strong face,” Liang said. “When you are starting a business, you must have a strong face, confidence, to stick with it and take it all the way. He has that. He believes.”