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JATA Independent Surveys


(28 March 2007)

JATA Survey on Travel Market Trends
(March 2007)


China and other Asian destinations continued to perform strongly with a slight improvement in the overseas travel DI, while the domestic DI dropped significantly due to the warm winter. Growth in both the domestic and overseas travel DI is forecast for the next three months."

    In order to assess prevailing business conditions, JATA (the Japan Association of Travel Agents) keeps abreast of changes in the travel market by carrying out a quarterly survey on the market trends among member companies, indexed by type of travel, destination and customer segment. (A summary of the survey appears below.)

According to the "Survey on Travel Market Trends," conducted during the period between late February and early March, the overseas travel market experienced a slight upturn and defying more pessimistic expectations, while the domestic travel market went into minus figures as expected.
Over the next three months, both the overseas and domestic DI are expected to grow and move back into positive territory.

 

Business activity for the overseas travel market as a whole

Despite the negative effects of fuel surcharges and the weak yen, the overseas travel DI defied more pessimistic predictions and improved slightly helped by a shift towards travel to China and other short-haul Asian destinations. This growth trend is expected to continue in the next three months..


Current Situation: The overseas travel DI improved marginally as fuel surcharges, the weak yen and other negative factors encouraged a shift towards travel to China and other short-haul Asian destinations.

"High-demand tourist destinations such as Hawaii, the U.S. (mainland) and Oceania are fighting a losing battle."
"Ongoing high fuel surcharges and the declining value of the yen are affecting travel." (full service travel agency)

"Relatively speaking, China and other short-haul destinations in the Asian region are performing strongly." (Second-tier retailer)

While the overseas travel DI remained in minus territory overall, it defied predictions of a further decline and instead showed a slight improvement.

 

Outlook for the next three months (April-June):
High hopes are pinned on the baby boomers as the impetus for ongoing DI growth.

"We anticipate that overseas travel will increase overall as a large number of baby boomers reach retirement." (Second-tier retailer)

"With fewer reports of terrorist incidents abroad and the onset of the holiday season, I think that Golden Week will produce a rush of Japanese travelers heading overseas." (First-tier retailer)

The DI growth trend is expected to continue in the next three-month-period (April-June), which includes Golden Week.


Summary

Although fuel surcharges and the weak value of the yen did have an impact, business was brisk for travel to China and other short-haul Asian destinations and the overseas travel DI rallied slightly against predictions that it would slump further. Immediate causes for concern include the imposition of fuel surcharges by the airlines and protracted weakness in the yen. Hopes pinned on the baby boomers are one of the factors behind predictions that the overseas travel DI will continue its upward trend.

 

(Units: DI)

 

2005
(
Jan-Mar)

2005
(
Jul-Sep)

2005
(Oct-Dec)

2006
(Jan-Mar)

2006
(Apr-Jun)

2006
(Jul-Sep)

2006
(
Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

All Overseas Travel

-2

-12

-15

-18

0

9

-6

-2

4

*-11





http://www.jata-net.or.jp/tokei/shijo/070328/images/00.gif

*Indicates forecast figures from the December, 2006 Survey

 

2005
(
Jul-Sep)

2005
(Oct-Dec)

2006
(Jan-Mar)

2006
(Apr-Jun)

2006
(Jul-Sep)

2006
(
Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

Full service travel agency

-33

-35

-33

4

14

-12

0

3

Overseas travel wholesaler

-33

-31

-40

-12

12

-22

-11

-20

Overseas travel specialist agency

-20

7

-10

-33

-11

9

-40

40

First-tier retailer

-19

-28

-14

0

7

-4

18

6

Second-tier retailer

-8

-11

-15

-8

-5

-11

-10

0

In-house travel agency

21

-3

-2

30

47

20

10

22

 

 

 

Trends in overseas travel demand (by customer segment)

Business and technical visit travel remained positive, while the middle-aged and senior travel segments broke free from the minus column and moved into positive figures.
Over the next three months, the honeymoon segment is expected to improve by 12 points, while growth is forecast for all customer segments.


In comparison with three months ago (October-December), DI expanded or remained steady for all customer categories with the exception of the honeymoon segment. The business/ technical visit segment stayed in positive territory, while the middle-aged and senior travel segments broke free from the minus column and moved into positive figures.
Compared to the same period (January-March) the previous year, all segments showed improvements with the middle-aged, senior, incentive, and business/technical visit segments surpassing last year s DI figures by 10 points or more.

Over the next three months, the honeymoon, family and female office worker segments are expected to grow by approximately 10 points, and the forecast calls for across-the-board

 

 

 

 

(Units: DI)

 

 

2006
(Jan-Mar)

2006
(Apr-Jun)

2006
(Jul-Sep)

2006
(
Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

Honeymoon

-42

-30

-33

-38

-42

-30

Family

-31

-20

-2

-33

-27

-19

Female Office Worker

-38

-28

-17

-35

-32

-23

Middle-aged (See Note 1)

-14

-1

-1

-10

0

2

Senior (See Note 2)

-10

4

1

-1

2

8

Incentive

-34

-22

-31

-25

-24

-18

Business/technical visit

-10

-2

-4

2

4

8

Note 1: Middle-aged customers are customers aged between 45 and 59
Note 2: Seniors (Previously OAPs) are customers aged 60 or over.

Trends in overseas travel demand (by destination segment)

Travel to China continued to make strong gains, while other Asian travel destinations also experienced an upswing.
Over the next three months, it is anticipated that all destination segments will either expand or remain steady, with European travel forecast to turn around and venture upward into positive territory.

 

In terms of current DI by destination segment, compared to three months ago (October-December), China and Asia have grown and remained in positive territory, while Hawaii has dropped 13 points. Oceania and Micronesia are down three points each, with DI values for both regions bottoming out at around -30. Despite the upswing in the U.S. and Canada destination segment, the DI for this category remains at -35, showing that this segment, like its Oceania counterpart, is still performing at sub-par levels.
In comparison with the same period last year (January-March), China DI was up 52 points, far exceeding its level of the previous year, while Asia and Europe also surpassed last year s figures for the same period by 20 and 14 points, respectively.

The forecast for the next three months (April-June) is for expansion or stable figures, with Europe also expected to venture into positive growth territory.

 

(Units: DI)

 

2006
(Jan-Mar)

2006
(Apr-Jun)

2006
(Jul-Sep)

2006
(
Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

Hawaii

-17

-13

-12

-16

-29

-22

US/Canada

-29

-20

-25

-40

-35

-24

Europe

-21

-2

3

-7

-7

2

Oceania

-29

-36

-36

-33

-36

-38

Micronesia

-20

-18

-24

-26

-29

-23

China

-32

-3

11

17

20

24

Asia

-11

0

9

1

9

8

 

About the Survey on Travel Market Trends

In January 2007, JATA (Japan Association of Travel Agents) asked all member companies to register as survey monitors and 593 companies did so.
The quarterly Survey on Travel Market Trends seeks to grasp trends in the 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, Feb 19, 2007 to Monday, Mar 5
Registered companies: 593
Responding companies: 283
Response rate: 47.7%

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

28

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

10

Domestic travel wholesaler

A dedicated domestic travel wholesaler

11

First-tier retail agency

Other than the above, a travel agency with a business volume of 3 billion yen or higher

35

Second-tier retail agency

Other than the above, a travel agency with a business volume of less than 3 billion yen

119

In-house travel agency

A travel agency which mainly handles travel arrangements for its parent company

50

 


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