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JATA Independent Surveys

(27 June 2007)

JATA Survey on Travel Market Trends
(June 2007)


Golden Week demand floundered and the overseas travel DI slid backwards, while the domestic DI remained steady.
The overseas and domestic travel sectors are both expected to turn positive in the next three months with hopes pinned on summer travel demand.


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," which was conducted during the period from mid-to-late May 2007, Golden Week demand floundered causing the overseas travel market to slide backwards while the domestic market remained steady. The overseas and domestic travel DI hovered in negative territory.
Summer travel demand is expected to increase over the next three months, and both the overseas and domestic DI are expected to move into positive territory.



Business activity for the overseas travel market as a whole

Disparities between regions were marked, with some segments booming while others slumped. The weak value of the yen and other negative influences put a damper on Golden Week demand, causing DI figures for the overseas travel market as a whole to fall, contrary to expectations.
Over the next three months, the family travel segment should experience major growth due to the summer holiday period with a positive upswing anticipated.

Current Situation: with the exception of China and Europe, all regions suffered a decline in business activity, while the overseas DI slipped backwards.

"Golden Week consumer demand growth fell short of expectations." (Full-service travel agency)

"Fuel surcharges and the weak yen dampened people's desire to travel." (Full-service travel agency)  (Full service travel company)

"Although travel to Europe made comparatively strong gains, the U.S. mainland, Hawaii and Oceania destination segments performed poorly." (Full-service travel agency)(Full service travel company)

Despite more optimistic predictions, the overseas travel DI slid backwards overall, with figures continuing to hover in the minus range.

 

Over the next three months (July-September), the family travel segment should experience major growth due to the summer vacation period helping bring about a positive turnaround in the overseas DI.

"During the summer vacation period, we anticipate that family demand for overseas travel will outstrip typical yearly levels." (Second-tier retailer)

"Demand for travel to Europe and China will continue to be robust." (Full-service travel agency)

Over the next three months (July-September), family travel demand is expected to expand, and the overseas travel DI is tipped to turn positive on the whole.

 

Summary:

 

Although Europe and short-haul destinations such as China exhibited strong growth, all other regions performed poorly, and the gaps between strongly and weakly performing regions widened. Overall, Golden Week demand growth fell short of expectations. The overseas travel DI slid backwards, due partly to nationwide municipal elections. Several companies reported that travel demand for resort destinations such as Hawaii was particularly poor and attributed this to factors such as the weak value of the yen and fuel surcharges.
Over the next three months, including the summer vacation period, strong demand growth is anticipated in the area of family travel, while the overseas travel DI is expected to make a turnaround and head into positive territory.

(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

-8

-15

-18

0

9

-6

-2

-10

3

*4





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

*Indicates forecast figures from the March, 2007 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

-35

-33

4

14

-12

0

-14

7

Overseas travel wholesaler

-31

-40

-12

12

-22

-11

-28

0

Overseas travel specialist agency

7

-10

-33

-11

9

-40

9

-18

First-tier retailer

-28

-14

0

7

-4

18

-10

7

Second-tier retailer

-11

-15

-8

-5

-11

-10

-19

-2

In-house travel agency

-3

-2

30

47

20

10

21

19

 

Trends in overseas travel demand (by customer segment)

Although the senior and business/technical visit segments exhibited continuous positive growth, demand for overseas travel was low overall.
In the next three months, it is anticipated that family segment demand will grow substantially and the female office worker and middle-aged segments are also tipped to increase.

In comparison with three months ago (January-March), DI for all customer segments except for the honeymoon and senior categories fell, albeit slightly. Although the honeymoon segment gained 6 points, the DI remained low.
Furthermore, while the senior and business/technical visit segments surpassed levels for the same period (April-June) in the previous year, all other sectors fell short of last year's DI figures.

Furthermore, while the senior and business/technical visit segments surpassed levels for the same period (April-June) in the previous year, all other sectors fell short of last year's DI figures.

Over the next three months (July-September), the forecast is for strong summer travel demand with the family segment expected to experience high growth and the female office worker and senior segments also tipped to increase. None of the other segments are expected to exhibit noticeable variations.

 

(Units: DI)

 

2006
(Apr-Jun)

2006<
(Jul-Sep)

2006
(Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

2007
(July-Sep)

Honeymoon

-30

-33

-38

-42

-36

-36

Family

-20

-2

-33

-27

-28

-4

Female Office Worker

-28

-17

-35

-32

-35

-23

Middle-aged (See Note1)

-1

-1

-10

0

-3

1

Senior (See Note 2)

4

1

-1

2

6

7

Incentive

-22

-31

-25

-24

-29

-30

Business/technical visit

-2

-4

2

4

1

-2

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 overseast ravel demand (by destination segment)

Although the China travel segment DI remained high and European travel boomed, Oceania, the U.S. mainland, Canada and other long-haul destination segments performed poorly, which resulted in notable disparities between strong and weak performing segments.
Over the next three months, it is anticipated that demand for overseas travel will increase across the board, leading to expectations that travel to Asia and Europe will improve and figures move into positive territory.

In terms of current DI by destination segment, compared to three months ago (January-March), demand for travel to China was particularly high with this destination segment gaining a further 7 points to finish at 27 points. On the other hand, the situation for travel to Oceania, the U.S. mainland, Canada, Micronesia and Hawaii tended to worsen causing the gulfs between destination segments to widen.
In comparison with the same period (April-June) last year, China far surpassed its previous result at 30 points, while demand for European travel remained stable and Micronesia, Hawaii, the U.S. mainland and Canada all posted figures 20 or more points lower than last year's.

Over the next three months (July-September), the China travel DI will remain high, while Asia and Europe are expected to make a positive turnaround. DI figures for Hawaii and Micronesia, which were in a downward spiral, are expected to rise by approximately 20 points, supporting the outlook for a positive upswing for all destination segments.

 

 

(Units: DI)

 

 

2006
(Apr-Jun)

2006
(Jul-Sep)

2006
(Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

2007
(Jul-Sep)

Hawaii

-13

-12

-16

-29

-35

-15

US/Canada

-20

-25

-40

-35

-41

-29

Europe

-2

3

-7

-7

-1

6

Oceania

-36

-36

-33

-36

-47

-38

Micronesia

-18

-24

-26

-29

-41

-22

China

-3

11

17

20

27

28

Asia

0

9

1

9

-3

10

 

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 589 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, May 14, 2007 to Monday, May 28
Registered companies: 589
Responding companies: 254
Response rate: 43.1%

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

29

Overseas travel wholesaler

A dedicated overseas travel wholesaler

25

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

12

First-tier retail agency

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

32

Second-tier retail agency

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

106

In-house travel agency

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

39

 


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