JTB Hawaii Inc., the first Japanese travel company to establish a presence in the isles, aims to expand its global reach with the acquisition of MC&A Inc., the state’s largest destination and event management company.

Terms of the deal, which is set to close Jan. 1, were not disclosed. MC&A will keep its name and remain a stand-alone operation under JTB Hawaii, which opened its first Honolulu offices in 1964. MC&A President and CEO Chris Resich will continue to lead the organization. Clients of both companies are expected to keep their service teams.

Tsukasa Harufuku, JTB Hawaii president and CEO, said the 680 employees that work under JTB Hawaii’s umbrella of businesses will keep their jobs. JTB Hawaii’s operations include JTB Hawaii Travel LLC, JTB Global Travel Service LLC, Travel Plaza Transportation LLC, Tachibana Enterprises LLC, and Travel Plaza LLC. Likewise, the 240 employees that work for MC&A will be retained in the deal, he said.

Harufuku said the purchase allows JTB Hawaii to continue global diversification efforts, designed to shore up the company’s footprint in the isles.

In recent years, JTB Hawaii’s growth has been threatened by Japan’s aging population, the country’s economic struggles and its status as a mature destination.

“We’ve been working as a business in Hawaii for more than 50 years,” Harufuku said. “Previously, our customers were coming from Japan only. Then, we started expanding into other Asian countries like Korea, and China.”

Harufuku said JTB began eyeing English speaking markets like the U.S. mainland, Canada and Oceania about seven or eight years ago, but struggled to gain entry into these markets. Since these markets make up the lion’s share of visitors to Hawaii, Harufuku said its natural that they are included in JTB Hawaii’s diversification plan.

“There are 8 million visitors coming to Hawaii and about 5 million of them are coming from the U.S. mainland, which has the largest share. Japan’s market is declining,” he said.

In 1997, the peak year for Japanese visitors to Hawaii, the state welcomed 2.2 million tourists from Japan. By 2015, that number had dropped to just under 1.5 million. Harufuku said further declines are anticipated as Japan’s population is projected to shrink 20 percent in the next 20 years.

Harufuku said last year JTB Hawaii brought 412,000 visitors from Japan to Hawaii. Approximately 80,000 of them represented the group business market, he said. But JTB Hawaii’s share of Hawaii’s overall tourism market will expand greatly when it joins forces with MC&A, he said.

MC&A, which was founded in 1983, has roughly 50 percent of Hawaii’s total U.S. and Canada inbound market for meetings, incentives, conventions and events (MICE), Harufuku said. They book more than 80 percent of the state’s cruise business and are bringing 170,000 visitors from North America and Australia to Hawaii on vacation packages, he said.

“This deal opens the world to JTB. Together, we’ll handle about 1 million of visitors that come to Hawaii or about one eighth of the market.

Combining the two companies will make both more competitive in an increasingly globalized world, he said. MC&A, whose businesses include Island Partners Hawaii, Diamond Head Vacations, Luxe Travel Hawaii, and Upon a Star Hawaii, is expected to broaden JTB Hawaii’s reach into the leisure and cruise markets as well as the coveted global meetings, incentives, conventions and exhibitions (MICE) business.

“We’ll have more bargaining power and we’ll be better able to face competition from the online travel agencies like Expedia, American Express and Priceline,” Harufuku said.

Resich said in a statement that the “strategic alliance” will enable both companies to capitalize on mutual strengths and pursue more growth.

“We are thrilled to be joining a strong and trusted organization like JTB Hawaii and are excited to realize our own goal of expanding our widely respected business brands into Asian markets and destinations outside of Hawaii through the JTB Group network, which creates significant benefits for our clients,” Resich said.