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JATA Independent Surveys


(September 28, 2005)

14th JATA Survey on Travel Market Trends: Overseas
(July-September 2005)

Overseas travel DI disappoints expectations, by declining further
Domestic travel DI avoids minus side thanks to demand for Hokkaido, Amami, Okinawa and Aichi 2005 Expo
Overseas travel to improve and domestic travel to remain on an upward track 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 "14th JATA Survey on Travel Market Trends" conducted from the middle to the end of August 2005, although the domestic travel market managed to stay out of minus territory thanks to modest market movement, the overseas travel market deteriorated, disappointing expectations raised by the last survey, and causing the DI (Diffusion Index) to fall. On the other hand, overseas travel is expected to improve and domestic travel markets should pick up gradually over the next three months.

Business activity for the overseas travel market as a whole

London terrorist attacks curb travel to European destinations
China and Asia recovering slowly; Overall overseas travel DI falls to minus 12, down from a year earlier
Improvement expected in three months

Current situation: China, Asia recovery slow; Europe sluggish after London terrorism

  • "Business travel demand was quick to recover after anti-Japan demonstrations had subsided, but pleasure travel demand still lags behind." (Opinion of full-service travel agencies)
  • "The London terrorist attacks cast a shadow over Europe. Recovery in Asia remains slow." (First-tier retail agency)
  • Contrary to expectations raised by the survey three months earlier (April to June), the DI fell to minus 12 for the period, which is 27 points lower than the period from July to September last year.

Outlook for the next three months (October to December): Oceania expected to recover, Asia and China should gradually pick up

  • "Led by Europe and Oceania long distance destinations should improve." (Full-service travel agency)
  • "China is expected to recover in and after October." (Full-service travel agency)
  • The DI is expected to rise about 10 points over the next three months (October to December).

Summary

  • The China tourist market has still not recovered from the effects of the anti-Japan demonstrations in that country, and beach resorts in Asia continue to languish. In addition, although demand for Europe is still strong, the effects of the London terrorist bombings could not be avoided, forcing the overall overseas travel DI down in comparison to the last survey. Over the next three months (October to December), starting with Oceania, business activity is expected to improve or level-off.

Change in Combined Demand for All Destinations
2002
2004
2005
July-Sept.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
-70
-46
9
15
2
-2
-8
-12
-1
*0
*Figure anticipated in June 2005

Trends in overseas travel demand (by customer segment)

Family, female office worker, inspection tour and business travel DI up
Negative number DI in middle aged and senior, inspection tour and business travel expected to become positive in three months

  • While the customer segment DI remains on the minus side, family travel rose 12 points on summer travel demand (April to June). Travel by female office workers, and inspection and business travel increased as well. Compared to the same period last year (July to September), double digit declines are expected in all customer segments.except inspection tours and business travel.
  • Over the next three months (October to December), middle-aged and senior and honeymoon travel segments are expected to rise 10 points, and the DI for middle-aged and senior and inspection tours and business travel should emerge from the minus side.
2004
2005
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.

Honeymoon

-23
-27
-37
-33
-39
-27

Family

3
-22
-21
-28
-16
-18

Female office worker

-14
-31
-28
-38
-32
-30

Middle-aged (45-59)

4
-1
-8
-15
-13
-8

Senior (60 and over)

5
5
-4
-9
-12
1

Incentive

-25
-17
-29
-34
-37
-29

Business / technical visit

1
-1
-3
-13
-7
0


Trends in overseas travel demand (by destination)

China picking up after anti-Japan demonstrations cooled down, but DI remained low followed by Oceania; and Asia and Europe retreat over 10 points
America, Canada, Hawaii and Micronesia favorable; Oceania expected to recover in three months

  • Viewed by customer segment, compared to three months ago (April to June), although the DI for China destinations picked up it, remained at low levels followed by Oceania and both Asia and Europe retreated ten points or more. Furthermore, while America, Canada, Hawaii and Micronesia rose, Oceania still lags behind.
    In comparison with the same time period last year (July to September), only America and Canada rose 10 points, whereas China fell 48 points and there were double-digit declines in all other segments.
  • Oceania is expected to recover over the next three months (October to December), and China, Asia and Hawaii are expected to rise.
2004
2005
July-Sept.
Oct.-Dec.
Jan.-Mar
Apr.-June
July-Sept.
Oct.-Dec.

Hawaii

8
-10
-3
-11
-8
-4

USA (other)/ Canada

-20
-32
-36
-15
-10
-10

Europe

10
-11
-16
6
-7
-7

Oceania

-21
-26
-21
-32
-33
-18

Micronesia

10
-5
-6
-15
-12
-15

China

20
22
22
-41
-28
-20

Asia (other)

9
12
-8
-7
-09
-11


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 547 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 Monday, August 25, 2005
Registered companies: 547
Responding companies: 278
Response rate: 50.8%
* 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 32
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 16
Domestic travel wholesaler A dedicated domestic travel wholesaler 10
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 115
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 44

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