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JATA Independent Surveys


(December 21, 2005)

15th JATA Survey on Travel Market Trends: Overseas
(October-December 2005)

Disturbances and terrorism cause Overseas Travel DI to tumble further, frustrating expectations
Domestic Travel DI maintains moderate improvement even after Aichi Expo ends
Possibility both overseas and domestic travel may fall off 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 "JATA Survey on Travel Market Trends" conducted from the middle to the end of November 2005, although the domestic travel market rose moderately as predicted, the overseas travel market ran counter to expectations, resulting in a decline in the DI (Diffusion Index). Over the next three months, domestic travel will likely slow, and overseas travel, where good news has been sparse of late, will more than likely suffer further decline.

Business activity for the overseas travel market as a whole

European destinations continue to slide in response to uneasiness over disturbances and terrorism
Contrary to expectations, various negative factors cause overall slip in Overseas Travel DI
Further decline over the next three months appears unavoidable

Current situation: Travel abroad remains sluggish as disturbances, terrorism and other negative factors continue to pile up.

  • "The terrorism in Bali and the riots in Paris really took the wind out of the sails of overseas travel." (Second-tier retail agency)
  • "Technical visit travel throughout Asia increased." (In-house agency)
  • Business travel to China and other Asian destinations remained favorable. On the other hand, contrary to the last three month forecast (July to September), sightseeing suffered greatly due to the deteriorating international situation, resulting in a decline of 17 points in the overall Overseas Travel DI (Diffusion Index), compared to the same time period in 2004 (October to December).

Outlook for the next three months (January to March): The current slump is expected to continue further as anxieties remain.

  • "Concerns about safety have caused the situation to deteriorate due to the spread of bird flu and terrorist attacks." (Overseas travel specialist agencies)
  • "We see this declining trend every year between January and March." (In-house agency)
  • A further decline in the DI over the next three months (January to March) will be difficult to avoid.

Summary

  • Europe, which had seen travel slow after terrorist attacks in London, declined markedly in the wake of rioting throughout all of France. Various other negative elements, among them anxiety over bird flu, an increase in anti-Japan sentiments in parts of Asia, and the sudden rise in airfares due to the fuel surcharges, combined to bring the overall Overseas Travel DI down. It is anticipated that further declines will be unavoidable over the next three months as long as anxieties remain.

Change in Combined Demand for All Destinations
2002
2004
2005
2006
Oct.-Dec.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.
-33
9
15
2
-2
-8
-12
-15
-17
*-1
*Figure anticipated in June 2005

Trends in overseas travel demand (by customer segment)

Honeymoon, incentive, silver, business and technical visit travel DIs rise, Business and technical visit travel moves out of the minus column
Double-digit decline in business and technical visit travel anticipated in next three months

  • Viewed by customer segment, the DI for business and technical visit travel moved out of the minus column, rising seven points over the three months from July to September. Honeymoon, incentive and senior travel also improved, but remained on the minus side. On the other hand, family travel fell by 19 points. Compared to the same period in 2004 (October to December), middle aged, family, senior and incentive travel declined more than 10 points.
  • In three months, a double digit decline in business and tecnical visit travel is anticipated, and honeymoon and incentive travel are expected to weaken again.
2004
2005
2006
Oct.-Dec.
Jan.-Mar.
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar.

Honeymoon

-27
-37
-33
-39
-29
-35

Family

-22
-21
-28
-16
-35
-33

Female office worker

-31
-28
-38
-32
-31
-28

Middle-aged (45-59)

-1
-8
-15
-13
-16
-13

Senior (60 and over)

5
-4
-9
-12
-6
-6

Incentive

-17
-29
-34
-37
-28
-33

Business / technical visit

-1
-3
-13
-7
0
-13


Trends in overseas travel demand (by destination)

While Hawaii remains firm and Asia improves, Europe and Micronesia fall more than 10 points
Only Oceania is expected to rise over the next three months

  • Viewed by destination segment, compared to the DI for the previous three months (July to September), Hawaii preserved continued its gradual rise, and although remaining on the minus side,attained a comparatively higher level than other destinations. Asia, which plummeted in the July-September period, rose by 10 points returning to the favorable level of the first half of 2005, while Oceania and China also improved. On the other hand, both Europe and Micronesia retreated by ten or more points, and the US and Canada also declined. Compared to the same period in 2004 (October to December), the US and Canada rose more than10 points, but China fell 43 points, Asia and Micronesia fell 21 points, and Europe dropped 10 points.
  • With the exception of Oceania, declines are expected across the board over the next three months.
2004
2005
2006
Oct.-Dec.
Jan.-Mar
Apr.-June
July-Sept.
Oct.-Dec.
Jan.-Mar

Hawaii

-10
-3
-11
-8
-5
-10

USA (other)/ Canada

-32
-36
-15
-10
-18
-26

Europe

-11
-16
6
-7
-21
-22

Oceania

-26
-21
-32
-33
-25
-21

Micronesia

-5
-6
-15
-12
-26
-28

China

22
22
-41
-28
-21
-27

Asia (other)

12
-8
-7
-09
-9
-18


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 535 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, November 7 to Monday, November 21, 2005
Registered companies: 535
Responding companies: 249
Response rate: 46.5%
* 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 28
Overseas travel wholesaler A dedicated overseas travel wholesaler 26
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 15
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 23
Second-tier retail agency Other than the above, a travel agency with a business volume of less than 3 billion yen 108
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 41

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