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(July 9, 2004)

9th JATA Survey on Travel Market Trends: Overseas (June 2004)

Overseas Travel Largely Recovered as Calm Settles In

In order to better assess prevailing business conditions, JATA (Japan Association of Travel Agents) keeps abreast of changes in the travel market by carrying out a quarterly survey of market trends among member companies, indexed by types of travel, destination and customer segment. (A digest of the survey appears below.)
According to the "9th JATA Survey on Travel Market Trends" conducted from the middle to the end of May 2004, both the overseas and domestic travel markets improved in comparison to the last survey. Over the next three months, the overseas market is expected to continue to thrive, while domestic travel should level off.

Business activity for the overseas travel market as a whole

Overseas travel market improves greatly, as travelers favor European destinations.
Outlook good for continuing shift toward recovery in three months.

Current situation: The Pace of recovery is greatly outstripping expectations.

  • "Golden Week results returned to 2002 levels." (Comment by many full service travel agencies)
  • "Travel to the US and Europe appears to be brisk." (Comment from various overseas travel wholesalers.)
  • "It seems that worries over SARS, terrorism, and the like have settled down, and those who gave overseas travel a pass last year are returning little by little." (Opinion of first-tier agencies)
  • The +9 indicated by the present survey for the period of April to June was well above the three month forecast of -20 made at the end of March for the same period.

Three-Month Forecast: With problems overseas and other worries easing, the DI is expected to recover to the best level in two years.

  • "Even if they are expensive, if full package products have a clear purpose or theme that suits market needs, group tours will do well."(Opinion of many full service travel agencies)
  • "We expect Olympic Games-related demand and the economic recovery to aid the recovery of group travel demand." (Comment from second-tier retail agencies)
  • For the three month period from July to September, the DI is expected to recover to 14, the best in two years.

Summary

  • With fears over SARS, bird flu and terrorism for the most part subsided, the DI rose sharply compared to the three month period from January to March. Demand for European destinations and Hawaii in particular is back on the plus side, so the outlook is good for further recovery over the next three months.

Change in Combined Demand for All Destinations
2002
2003
2004
Apr.-June
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
-50
-25
-49
-93
-70
-33
-46
9
14
*-20
*figure anticipated in March 2004

Trends in overseas travel demand (by customer segment)

All customer categories rise sharply
Trend will continue over the next 3 months,
except for honeymoon market

  • The DIs for all customer segments at present (April to June) are significantly higher, with incentive travel 36 points higher, and family and senior travel 31 points higher compared to three months ago (January to March). Compared to the same period last year, business and inspection tour travel in particular skyrocketed 87 points.
  • Over the next three months (July to September), all customer segments are expected to make gains, with the exception of honeymoon travel which will be leveling off, Senior travelers segment in particular is projected to improve by as much as 10 points.
2003
2004
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.

Honeymoon

-84
-65
-34
-39
-18
-19

Family

-96
-74
-49
-53
-22
3

Female office workers

-92
-69
-49
-57
-32
-16

Middle-aged (45-59)

-88
-63
-28
-37
-9
2

Seniors (60 and over)

-84
-66
-26
-33
-2
10

Incentives

-94
-84
-63
-60
-24
-13

Business / inspection tours

-90
-48
-27
-29
-3
1


Trends in overseas travel demand (by destination)

All destinations rise sharply, as Europe moves into the plus column.
Gains to continue over the next 3 months

  • The DIs for all destinations from April to June rose sharply compared to the previous three month period, with China and Asia, which had been sluggish due to concerns about SARS and bird flu, rising 45 and 43 points, respectively. Not only did Europe improve to a DI of 3, China and Hawaii improved more than 90 points compared with the same period last year.
  • Business activity should continue to rise over the next three months (July to September), and a rise of 10 points or more is anticipated for China and Asia.
2003
2004
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar
Apr.-June
July-Sept.

Hawaii

-90
-63
-28
-27
0
8

USA (other)/ Canada

-87
-67
-51
-54
-16
-10

Europe

-78
-47
-16
-22
3
7

Oceania

-76
-50
-24
-28
-19
-17

Micronesia

-83
-59
-38
-19
-2
1

China

-100
-76
-38
-49
-4
6

Asia (other)

-98
-76
-36
-55
-12
0


About the Survey on Travel Market Trends
In January 2004 JATA (Japan Association of Travel Agents) sent a request via e-mail to member companies to register as survey monitors, and a total of 552 monitors registered.
The quarterly Survey on Travel Market Trends seeks to grasp trends in the travel market based on responses to a questionnaire on conditions now and those anticipated over the next three months.
The survey asks participating companies to rate their sales results for each destination and customer segment by choosing from three categories;"good," "average" and "poor," Respondents indicate "do not handle" for items outside their business scope. Each share of "good," "average" and "poor" is then divided respectively by the denominator, which is equal to the total number of responses minus the "do not handle" and "no reply" responses. Finally each share is processed into the Diffusion Index (DI). The highest possible index figure is +100, and the lowest is -100
Survey Overview
Survey area: Japan nationwide
Survey target: JATA member company management
Survey method: Internet survey
Survey period: From Tuesday, May 18 to Monday, May 31, 2004
Registered companies: 552
Responding companies: 286
Response rate: 51.8%
Business Classification
The JATA Survey on Travel Market Trends analyzes business conditions based on business content. A definition of each business classification and the number of respondents to the survey is shown below.

Designation
Definition
Respondents
Full service travel agency A large-scale travel agency with a national network that provides a full range of travel products 28
Overseas travel wholesaler A dedicated overseas travel wholesaler 27
Overseas travel specialist agency A travel agency with a business volume of more than 5 billion yen, 80% of which is related to overseas travel 13
Domestic travel wholesaler A dedicated domestic travel wholesaler 8
First-tier retail agency Other than the above, a travel agency with a business volume of 3 billion yen or higher 31
Second-tier retail agency Other than the above, a travel agency with a business volume of less than 3 billion yen 127
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 52

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