How a business that hosts Japanese visitors in Minnesota is contending with the travel plunge

The COVID-19 virus has killed 150,000 Americans, exposed our indifference to sound public health practices and sacrificed millions who lost their hospitality, travel and other jobs.

That includes family-owned Kiku Enterprises, a small firm that brings an estimated $10 million in travel spending to the Twin Cities annually.

Three family members and several contractors provide logistics, translation and other services for up to 2,500 Japanese business people, students and tourists. It has seen business vanish since February, when coronavirus spread around the world.

"Our last group in February was from Ibaraki, a sister city to Minneapolis," said Chieko Katagiri Karlsen, a daughter of the founder who has become majority shareholder of Kiku. "Our bread-and-butter is business travelers. And we don't have any bookings for the rest of the year."

This is a small business in terms of revenue; about $250,000 a year is generated by three employees and several contractors. But big in terms of assisting travelers who may spend a day to weeks on business or cultural pursuits.

Kiku partners with outfits that range from the Mayo Clinic, Medtronic, 3M, the University of Minnesota and Hennepin Health Care to the Mall of America, Minnesota's renewable-energy industry and agricultural industry, and retailers such as Target, Lunds & Byerlys and Bachman's.

"Meet Minneapolis has partnered with Kiku Enterprises for more than 30 years, specifically to help bring Japanese visitors to our city and region," said Bill Deef, a veteran executive with Meet Minneapolis, the convention-and-tourism bureau. "They provide land arrangements, interpreting services, tours, transportation arrangements, group restaurant reservations, professional appointments, golfing and sightseeing. These small businesses … help generate visitor spending and tax revenue for Minneapolis. Without companies such as Kiku, attracting this event business and their visitors [from around the world] becomes much more difficult."

Kiku was started by Shiro "Don" Katagiri, 79, a student from Japan in the 1960s who married a young woman he met in Chicago. They followed a job to Minneapolis, where they raised their four children.

Katagiri started representing Minnesota companies to Japan in the 1970s before establishing Kiku in 1978 as business consultancy between Minnesota and Japan.

The business built a good reputation as a Twin Cities-Japan specialist that helped customize visits and provide translations services and expert insights that bridge culture and help forge long-term relationships, as well as a middle-class life for Katagiri, his wife Patricia, and their four grown children.

Karlsen, 44, the only one of the Katagiri kids in the business, specializes in planning and coordinating Minnesota visits. Shiro Katagiri specializes in relationships in Japan, including regular written updates in Japanese on Minnesota news, from the recent civil unrest to the latest commercial, environmental and cultural developments.

"Everything was running moderately successful until now," Katagiri said.

Karlsen said the Sept. 11, 2001, terrorist attacks in New York and subsequent economic recession hurt the business. But the COVID-19 pandemic and instant recession is unprecedented.

Kiku qualified for a $12,900 U.S. Small Business Administration loan through Bremer Bank to cover wages of Chieko, the only full-time employee and her part-time parents for about three months this spring. But local-and-state business aid was unavailable because Kiku is a home-based business.

"Shiro and I are OK," said Patricia Katagiri, 73, noting that she and her husband receive Social Security and the mortgage is paid. "But my daughter, Chieko, and the others we hire, contractors, it is difficult for them. We have wonderful people who we hire to work with tours and trade groups, for say $600 for three days of work. That makes a difference for them. And this business has always been my husband's fifth child."

Karlsen, also raising a family, said she is grateful for her husband's job to get through this lean year.

She talks about her career as a multilingual business owner and guide as a gift that provides her an opportunity to deepen relationships with Minnesota institutions and introduce them to Japanese guests.

Kiku's revenue comes mostly from a share of the revenue collected by Japanese travel agents who book the travel and lodging, as well as commissions from Twin Cities transportation providers.

"I don't want to give up on Kiku Enterprises," Karlsen said. "I remember after 9/11, every tour got canceled and I waited tables until I could go back to the business. This is worse. And I'm doing the books for my friend's hair salon.

"Kiku can hang on for as long as it takes. I want to continue to develop these relationships between Japan and Minnesota. I believe there will be a vaccine and that people will travel again in 2021. We're fortunate. My husband works for a construction materials firm. His business is trending upward this year."

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.