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(October 15, 2004)

10th JATA Survey on Travel Market Trends: Overseas (September 2004)

Overseas travel DI best in two years
Overseas travel to remain up over the next three months

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 "10th JATA Survey on Travel Market Trends"conducted from mid to late August 2004, in comparison to the last survey, travel market conditions remained favorable, while, contrary to expectations, domestic travel declined sharply. Over the next three months, the overseas travel DI is expected to remain positive. On the other hand, although domestic travel may improve slightly, it is not expected to move to the plus side.

Business activity for the overseas travel market as a whole

Conditions in the overseas travel market remain favorable, as China and Asia continue to rise
Despite a slight downward trend, DI expected to remain on the plus side over the next three months

Current situation: Unforeseeable factors not withstanding,upward trend expected to continue

  • "Compared to last year, overseas family travel staged a remarkable recovery between July and September." (Opinion of Second-tier retail agencies)
  • "Business demand in China remains active, while jndividual travel continues to advance." (Comment by in-house travel agencies)
  • Starting with China and Asia, all destinations tended to rise. A steady increase in broad-based demand, including family travel, resulted in a DI of 15, the highest ever.

Three-Month Forecast: DI should stay on the plus side but a drop is anticipated

  • "Overseas travel is in the news again thanks to the Olympic Games and demand is expected to be very brisk. No anxiety about traveling abroad is foreseen over the next three months." (Opinion of overseas travel wholesalers)
  • "Considering the influence in Japan of the popular Korean TV drama 'Winter Sonata,' travel to Korea, especially among women, is expected to increase in the future." (Opinion of Second-tier retail agencies)
  • Family travel is expected to fall off sharply over the next three months (October to December), but middle-aged and senior travel should remain steady. Demand for China and other Asian destinations is likely to continue to rise, and the DI should stay on the plus side.

Summary

  • The combination of summer vacation demand, diminished anxiety about traveling abroad, and a renewed sense of prosperity in the domestic economy led to a more significant rise in overall demand than for the period from April to June, when demand returned to the plus zone. In particular, long dormant demand in the family travel segment made a remarkable comeback. Although a slight drop is expected over the next three months, demand for China and Asian destinations is likely to continue to rise.

Change in Combined Demand for All Destinations
2002
2003
2004
July-Sept.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
-37
-49
-93
-70
-33
-46
9
15
11
*14
*figure anticipated in June 2004

Trends in overseas travel demand (by market segment)

Family travel significantly up as middle-aged, senior, technical visits and business travel move to the plus side
Rise in the senior segment anticipated over the next three months

  • The current DI for all market segments moved to the plus column, with family travel shooting up 25 points, and the middle-aged, senior, technical visits and business travel segments changing favorably. Compared to the same period last year, family travel skyrocketed 77 points and middle-aged and senior travel rose70 points.
  • Family travel is likely to drop 19 points over the next three months (October to December), falling back into the minus column. On the other hand, the middle-aged, senior, technical visits and business travel segments should be on the plus side, with the senior segment in particular expected to rise significantly over the next three months.
2003
2004
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.

Honeymoon

-65
-34
-39
-18
-23
-16

Family

-74
-49
-53
-22
3
-16

Female office worker

-69
-49
-57
-32
-14
-17

Middle-aged (45-59)

-63
-28
-37
-9
4
6

Senior (60 and over)

-66
-26
-33
-2
5
12

Incentive

-84
-63
-60
-24
-25
-16

Business / technical visit

-48
-27
-29
-3
1
2


Trends in overseas travel demand (by destination)

China and other parts of Asia out in front as all destinations rise sharply and move into the plus column. Recovery in America, Canada and Oceania lags.
Rising trend for China and Asian destinations expected to continue.

  • The current DI for all customer destinations remained favorable, with China and Asia up more than 20 points compared to the previous three month period (April to June). On the other hand, America, Canada and Oceania were slightly down for the same period, lingering on the minus side. Compared to the same period last year (July to September), China and other parts of Asia improved 96 and 85 points, respectively.
  • As far as business activity over the next three months (October to December) is concerned, conditions are expected to remain favorable in China and other parts of Asia, while it is hoped that America, Canada and Oceania, which have been on the minus side, will gradually rise.
2003
2004
July-Sept.
Oct.-Dec.
Jan.-Mar
Apr.-June
July-Sept.
Oct.-Dec.

Hawaii

-63
-28
-27
0
8
0

USA (other)/ Canada

-67
-51
-54
-16
-20
-18

Europe

-47
-16
-22
3
10
4

Oceania

-50
-24
-28
-19
-21
-14

Micronesia

-59
-38
-19
-2
10
2

China

-76
-38
-49
-4
20
21

Asia (other)

-76
-36
-55
-12
9
12


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 572 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 Monday, August 8 to Thursday, August 26, 2004
Registered companies: 572
Responding companies: 300
Response rate: 52.4%
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 30
Overseas travel wholesaler A dedicated overseas travel wholesaler 30
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 9
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 134
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 53

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