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(March 30, 2005)

12th JATA Survey on Travel Market Trends: Overseas (January-March 2005)

Overseas travel DI steady; Effects of Sumatra Earthquake limited to Asia
Improvement anticipated after 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 "12th JATA Survey on Travel Market Trends" conducted from the latter half of February to the beginning of March 2005, compared to the last survey, the DI (Diffusion Index) as well as the overseas and domestic travel markets remained relatively unchanged. On the other hand, both the overseas and domestic travel markets are likely to improve over the next three months.

Business activity for the overseas travel market as a whole

Because the influence of the Sumatra Earthquake was largely confined to Asia, the decline in the overall overseas travel market remained within the range predicted in the last survey.
Over the next three months, the DI is expected to make a double-digit increase

Current situation: The DI has declined but remains within anticipated parameters because the effects of the Sumatra Earthquake were limited to Asia.

  • "The effects of the Sumatra Earthquake were offset by gains in other destinations." (Opinion of First-tier retail agencies)
  • "Led by China, business-related travel for training has been on the rise." (Opinion of Second-tier retail agencies)
  • While on the one hand business travel to China maintained its steady rise, on the other, the Asian region suffered greatly as a result of the Sumatra Earthquake, resulting in a lower than expected DI for overseas travel as a whole.

Outlook for the next three months (April to June 2005): Recovery anticipated; DI expected to move once again to the plus column.

  • "There is constant demand for South Korea and China." (Opinion of full-service travel agencies)
  • "Europe will pick up in or after April." (Opinion of Second-tier retail agencies)
  • The prospects for overall improvement are good over the next three months from April to June 2005, especially for European, American and Canadian destinations thanks to the favorable sequence of days off during the Golden Week holidays from April 29 to May 5.

Summary

  • Although the Sumatra Earthquake was expected to have a broad and chilling influence on the region, uneasiness about traveling to the region has begun to subside. Thanks to the unabated "South Korea Fever" and the continuing popularity of China, the market overall avoided serious decline. Beginning with Europe, overall improvement is anticipated over the next three months from April to June 2005.
    * Indicates the figures from the December 2004 Survey

Change in Combined Demand for All Destinations
2002
2004
2005
Jan.-Mar.
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
-49
-70
-33
-46
9
15
2
-2
16
*-3
*Figure anticipated in December 2004

Trends in overseas travel demand (by customer segment)

DI for incentive, honeymoon and senior travel falls 10 points.
After three months the senior, middle-aged, business and incentive travel customer segments are expected to return to the plus side.

  • The current DI for the incentive, honeymoon and senior travel customer segments is 10 points lower than it was three months ago (from October to December 2004). However there was a 30 point rise compared to the same three month period from January to March 2004, except for honeymoon travel which is at about the same level.
  • The prospects are good for all customer segments to gain approximately 10 points over the next three months from April to June 2005, with the DI for senior, middle aged, business and inspection travel customer segments expected to move to the plus side.
]
2004
2005
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June

Honeymoon

-39
-18
-23
-27
-37
-23

Family

-53
-22
3
-22
-21
-13

Female office worker

-57
-32
-14
-31
-28
-19

Middle-aged (45-59)

-37
-9
4
-1
-8
4

Senior (60 and over)

-33
-2
5
5
-4
8

Incentive

-60
-24
-25
-17
-29
-16

Business / technical visit

-29
-3
1
-1
-3
7


Trends in overseas travel demand (by destination)

Due to the Sumatra Earthquake, the DI for the Asian region fell 20 points.
On the other hand, China remains strong and shows no sign of abating.
Over the next three months, double digit increases are expected for Europe, America,Canada and Asia.

  • Aside from a 20 point drop in Asia due to the Sumatra Earthquake last year, the current DI for all other destinations is for the most part unchanged compared with three months ago (from October to December 2004). Compared to the same three month period from January to March 2004, all areas, including Asia, have done remarkably well, with China in particular climbing 71 points.
  • Over the next three months from April to June 2005, Europe, America, Canada and Asia are projected to rise more than 11 points. Hawaii should gain just under 10 points, and the DI for Hawaii and Asia is expected to move to the plus column.
2004
2005
Jan.-Mar
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar
Apr.-June

Hawaii

-27
0
8
-10
-3
5

USA (other)/ Canada

-54
-16
-20
-32
-36
-22

Europe

-22
3
10
-11
-16
0

Oceania

-28
-19
-21
-26
-21
-23

Micronesia

-19
-2
10
-5
-6
-9

China

-49
-4
20
22
22
31

Asia (other)

-55
-12
9
12
-8
3


About the Survey on Travel Market Trends
In January 2005 JATA (Japan Association of Travel Agents) sent a request via e-mail to member companies to register as survey monitors, and a total of 596 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, February 21 to Monday, March 7, 2004
Registered companies: 596
Responding companies: 294
Response rate: 49.3%
* Due to the Niigata Chuetsu Earthquake, travel agencies headquartered in Niigata Prefecture were not included in this survey.
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 31
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 16
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 30
Second-tier retail agency Other than the above, a travel agency with a business volume of less than 3 billion yen 126
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 56

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