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JATA Independent Surveys

(26 September 2007)

JATA Survey on Travel Market Trends
(September 2007)


The overseas travel sector performed poorly as fuel surcharges, the weak yen and other factors diminished the sense that overseas travel was affordable, causing the DI to hover in negative territory, while the domestic DI made a turnaround and entered into positive figures.
Over the next three months, the demand for overseas travel is expected to remain steady, while domestic travel is likely to grow.


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 from late July to mid-August 2007, summer vacation travel demand shifted from overseas to domestic travel. As a result, the domestic travel market made strong gains, while the overseas market fell far short of predictions made in the previous outlook.
Over the next three months, the overseas travel DI is expected to remain stable, while the domestic DI is tipped to perform strongly.


Business activity for the overseas travel market as a whole

Fuel surcharges and the weak yen encouraged a shift from international to domestic travel with all overseas travel DI figures falling significantly short of predictions made in the previous outlook to bottom out in negative figures.
The next three months reveal little cause for optimism with business activity expected to hover at similar levels.

Current Situation: Soaring fuel prices, the weak yen and other negative influences encouraged a shift toward domestic travel, causing the overseas travel DI to hover in negative territory.




"The weak yen and high fuel prices have made overseas travel seem less affordable and therefore, demand is shifting in favor of domestic travel." (Second-tier retailer)
" Although there are no signs of recovery in the demand for travel to the U.S. and Oceania, travel to China, other Asian destinations and Europe remains very strong." (First-tier retailer)
Contrary to expectations, overseas travel DI improved only slightly with figures remaining in minus territory.

 

Outlook for the next three months (October-December): Although business travel to China is booming, the impact of media reports about Chinese products is cause for concern.



"The Chinese business travel segment is continuing to grow as usual." (Second-tier retailer)

" We are receiving a lot of queries from customers who are concerned about the safety and security of travel in China, and we are finding it difficult to respond." (Full service travel agency)

Over the next three months (October-December), figures are expected to remain unchanged in negative territory.


Summary 

 

Although strong activity in the overseas travel market was anticipated for the summer vacation period, higher fuel prices and a sharp decline in the value of the yen precipitated a sense that overseas travel was less affordable, and this stimulated a shift toward domestic travel, resulting in only a small improvement that fell far short of previous forecasts.
While the sharp fall of the yen remained in check, protracted high fuel prices were an inevitable deterrent to travel. Although business travel to China performed strongly, leisure travel as a whole provided little hope for optimism as a large number of people expressed concerns about the impact of media reports on the safety of Chinese food and other products. Consequently, the overseas travel market is expected to remain stable over the next three months.

(Units: DI)

 

2005
(
Jul-Sep)

2005
(
Oct-Dec)

2006
(Jan-Mar)

2006
(Apr-Jun

2006
(Jul-Sep)

2006
(Oct-Dec)

2007
(
Jan-Mar)

2007
(Apr-Jun)

2007
(May-Jul)

All Overseas Travel

- 12

- 18

0

9

- 6

- 2

- 10

- 7

- 8

*3





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

*Indicates forecast figures from the June, 2007 Survey

 

2006
(
Jan-Mar)

2006
(Apr-
Jun

2006
(Jul-Sep)

2006
(Oct-Dec)

2007
(Jan-Mar)

2007
(
Apr-Jun)

2007
(Jul-
Sep)

2007
(Oct-Dec)

Full service travel agency

- 33

4

14

- 12

0

- 14

- 12

3

Overseas travel wholesaler

- 40

- 12

12

- 22

- 11

- 28

- 20

- 31

Overseas travel specialist agency

- 10

- 33

- 11

9

- 40

9

9

- 9

First-tier retailer

- 14

0

7

- 4

18

- 10

- 24

0

Second-tier retailer

- 15

- 8

- 5

- 11

- 10

- 19

- 6

- 9

In-house travel agency

- 2

30

47

20

10

21

11

0

 

Trends in overseas travel demand (by customer segment)

Although the family travel segment grew strongly, all other segments performed poorly.
In the next three months, the senior, middle-aged, and business/technical visit segments are expected to remain steady, while the incentive and honeymoon segments are tipped to increase.

Looking at current DI by customer segment, demand for family travel was robust with a 22 point increase in comparison to the previous three-month period. (April-June). Looking at the other segments, business/technical visit travel remained stable in positive figures as did senior travel. Middle-aged travel showed a slight increase, but did not quite make it into positive figures. Travel in the incentive and honeymoon segments fell, and although travel in the female office worker segment increased, DI values for these customer segments remained low.
In comparison with the same period (July-September) the previous year, travel in the business/technical visit segment showed an improvement on last year s figures, while the other segments either stayed the same or declined.

Over the next three months (October-December), the end of the summer holidays will cause the family travel segment to fall off significantly, and the female office worker travel category will also decline. On the other hand, while no major movement is expected in the senior or business/technical visit segments, they will likely remain positive, and the incentive and honeymoon segments are also expected to grow.

    (Units: DI)

 

 

2006
(Jul-
Sep)

2006
(Oct-Dec)

2007
(Jan-
Mar)

2007
(Apr-
Jun)

2007
(Jul-
Sep)

2007
(Oct-
Dec)

Honeymoon

- 33

- 38

- 42

- 36

- 39

- 28

Family

- 2

- 33

- 27

- 28

- 6

- 28

Female Office Worker

- 17

- 35

- 32

- 35

- 26

- 35

Middle-aged (See Note 1)

- 1

- 10

0

- 3

0

- 1

Senior (See Note 2)

1

- 1

2

6

2

5

Incentive

- 31

- 25

- 24

- 29

- 32

- 20

Business/technical visit

- 4

2

4

1

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 overseas travel demand (by destination segment)

Although travel to China fell slightly, DI figures remained high for this segment, while the demand for travel to other Asian destinations and Europe increased significantly.
Hawaii and Micronesia, which had experienced continued fall in demand, made a positive turnaround posting double-digit growth. Demand for travel to Oceania, the U.S. mainland and Canada remained stagnant.
The demand for travel to China and other Asian countries is expected to remain strong in the next three months. Travel demand is forecast to improve for Oceania, but it is predicted to worsen for other regions.

Looking at current DI by destination segment, the China travel DI declined slightly, but still remained high. The Asia travel DI rose 9 points to enter the positive range and Europe also rallied slightly and broke free from negative territory to move into positive figures. All other regions exhibited a positive upswing with Hawaii and Micronesia achieving double-digit growth. The U.S. mainland, Canada and Oceania showed little growth and remained at low levels.
In comparison with the same period (July-September) last year, China showed an improvement of 11 points, while Hawaii, the U.S. mainland and Canada fell short of last year s figures by approximately 10 points. The other destinations either remained stable at similar levels or saw a fall off.

Over the next three months (October-December), the China travel DI is expected to remain high and Asian destination DI values are also expected to hover in positive figures. On the other hand, apart from Oceania, where the DI has remained low but is tipped to grow, DI values for all destinations are expected to worsen.

 

 

(Units: DI)

 

 

2006
(Jul-Sep)

2006
(Oct-Dec)

2007
(Jan-Mar)

2007
(
Apr-Jun)

2007
(Jul-Sep)

2007
(Oct-Dec)

Hawaii

- 12

- 16

- 29

- 35

- 21

- 24

US/Canada

- 25

- 40

- 35

- 41

- 36

- 37

Europe

3

- 7

- 7

- 1

0

- 5

Oceania

- 36

- 33

- 36

- 47

- 41

- 25

Micronesia

- 24

- 26

- 29

- 41

- 22

- 32

China

11

17

20

27

22

22

Asia

9

1

9

- 3

6

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 569 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, Jul 30, 2007 to Monday, Aug 13
Registered companies: 569
Responding companies: 220
Response rate: 38.7%

*Note: Due to the Chuetsu Offshore Earthquake that occurred in 2007, travel companies based in Niigata and Nagano prefectures were excluded from the 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

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

11

Domestic travel wholesaler

A dedicated domestic travel wholesaler

9

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

81

In-house travel agency

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

35

 


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