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JATA Independent Surveys


(July 15, 2005)

13th JATA Survey on Travel Market Trends: Overseas
(April -June 2005)

Overseas travel DI hit hard by China travel drought
Aichi Expo demand brisk, but overall domestic travel DI fails to move into the positive zone
Overseas travel to improve and domestic travel to slowly pick up in 3 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 "13th JATA Survey on Travel Market Trends" conducted from the middle to the end of May 2005, the DI (Diffusion Index) disappointed expectations raised by the last survey, as the overseas travel market deteriorated and the domestic travel market failed to enter plus territory. On the other hand, overseas travel is expected to improve and domestic travel markets should gradually pick up over the next three months.

Business activity for the overseas travel market as a whole

Anti-Japan demonstrations in China harm travel demand
Overall overseas travel DI retreats 8 points - over 20 points below expectations
Rise expected over the next three months; outlook good for returning to the plus column

Current situation: Nearby destinations, including China, struggling; Europe, America and other long distance destinations doing well

  • "Due to the anti-Japan demonstrations, all training visits to China were either canceled or postponed." (Opinion of In-house travel agencies)
  • "Demand for Europe, and for Italy in particular, was brisk." (Opinion of Second-tier retail agencies)
  • The DI went down to minus 8 points, 24 points below the expectations of three months ago (January-March), and represented a decline of 17 points from the April-June period of 2004.

Outlook for the next three months (July to September): China expected to recover; DI should move out of the minus column

  • "I think that things will pick up as soon as the Japan bashing in China and South Korea quiets down." (Opinion of full-service travel agencies)
  • "Summer has always been the favorite time for a vacation in Hawaii." (Opinion of Second-tier retail agencies)
  • Led by business travel, China is expected to recover, while Hawaii should benefit from summer vacation demand.

Summary

  • Anti-Japan demonstrations in China and South Korea had a most unfavorable impact on travel to China, while the Sumatra Earthquake held travel to the Asian region in check. On the other hand, travel to Europe, America and other long distance destinations was brisk.
    In the next three months (July to September), Europe is expected to remain steady transitions and stay on the plus side, China and Hawaii should pick up, and the prospects are good for conditions in general to improve.
    * Indicates the figures from the March 2005 Survey

Change in Combined Demand for All Destinations
2002
2004
2005
Apr.-June
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
-93
-33
-46
9
15
2
-2
-8
0
*16
*Figure anticipated in March 2003

Trends in overseas travel demand (by customer segment)

DI falls for all but honeymoon travel
Family travel to lead improvement in all customer segments over the next 3 months

  • Viewed by customer segment, the DI for all segments except for honeymoon travel was down compared to three months ago (January to March). In particular, female office worker, inspection tour and business travel fell 10 points. Compared to the same period last year (April to June), honeymoon travel lost 15 points and incentive, inspection tour and business travel were all approximately 10 points lower.
  • Over the next three months (July to September), family travel should rise 23 points on increased summer vacation demand, and all customer segments are expected to reverse direction, giving the DI a much needed boost.
2004
2005
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.

Honeymoon

-18
-23
-27
-37
-33
-28

Family

-22
3
-22
-21
-28
-5

Female office worker

-32
-14
-31
-28
-38
-22

Middle-aged (45-59)

-9
4
-1
-8
-15
-3

Senior (60 and over)

-2
5
5
-4
-9
0

Incentive

-24
-25
-17
-29
-34
-26

Business / technical visit

-3
1
-1
-3
-13
-6


Trends in overseas travel demand (by destination)

Anti-Japan demonstrations drive China DI down by a massive 63 points Europe, America and Canada rise over 20 points
Europe to remain on the plus side and China to improve over the next three months

  • Viewed by destination, compared to the DI three months ago (January to March), China tumbled 63 points in the wake of anti-Japan demonstrations, bringing its three quarter string of 20 plus DI results to an abrupt end. On the other hand, the DI for Europe, America and Canada rose over 20 points, moving Europe into plus territory.
    Compared to the same period last year (April to June), China was off 37 points. Elsewhere, Hawaii, Oceania and Micronesia were more than 10 points lower than the previous year.
  • Over the next three months (July to September), China should improve favorably, Hawaii will likely move to the plus side, and steady transition is expected in Europe
2004
2005
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar
Apr.-June
July-Sept.

Hawaii

0
8
-10
-3
-11
2

USA (other)/ Canada

-16
-20
-32
-36
-15
-8

Europe

3
10
-11
-16
6
4

Oceania

-19
-21
-26
-21
-32
-36

Micronesia

-2
10
-5
-6
-15
-12

China

-4
20
22
22
-41
-27

Asia (other)

-12
9
12
-8
-7
-5


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 556 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, May 16 to Monday, May 30, 2004
Registered companies: 556
Responding companies: 256
Response rate: 46.0%
* 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 27
Overseas travel wholesaler A dedicated overseas travel wholesaler 24
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 11
Domestic travel wholesaler A dedicated domestic travel wholesaler 7
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 116
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 40

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