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JATA Independent Surveys

(2 April 2008)

JATA Survey on Travel Market Trends
(April 2008)

Travel to China fell further, while the overseas travel DI tumbled further than expected. The domestic DI hovered at the same level, albeit in negative territory. In the next three months, a slump is forecast for the overseas travel market, while domestic travel is expected to make a positive turnaround.

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 mid February and early March, the overseas travel market deteriorated significantly more than was forecast, while the domestic travel market remained stable (albeit in negative territory) as was predicted.

In the next three months, the overseas travel DI is expected to slump, while domestic DI is tipped to make a positive turnaround.

Business activity for the overseas travel market as a whole

On the whole, the overseas travel DI fell 20 points further than was predicted, and both the domestic and overseas markets deteriorated. Protracted high fuel prices were compounded by the slump in travel to China, which had previously been the engine driving the overseas travel market. In the next three months, the current bleak state of affairs is expected to continue due to the inconvenient spacing of national holidays during this year’s Golden Week (which will make the period less conducive to taking long trips) and other problems combined with existing adverse factors.

Current Situation: The worsening business climate, a slump in travel to China and protracted high fuel prices have caused travelers to shun trips abroad and as a result the overseas travel DI is suffering.





 

"Overseas travel is in a slump due to weak consumer spending, fuel surcharges and other adverse factors."(Full-service travel agency)
"With the advent of the Beijing Olympics, we had anticipated a boom in China travel. However, food safety issues and other concerns have attributed to a reluctance to travel to China."(Overseas travel specialist agency)
Although the overseas travel market was expected to fall slightly, the DI plunged 20 points more than was predicted in the previous outlook.

 

Outlook for the next three months (April to June):
Compounding the abovementioned adverse influences is the inconvenient spacing of holidays over Golden Week this year making it unsuitable for long trips. These factors are expected to insure on-going poor performance in the overseas travel market.






"The series of successive fuel surcharge hikes will continue on past April, and we see no factors on the horizon that might trigger a positive upswing." (Overseas travel wholesaler)
" Due to the days when Golden Week holidays fall this year, travel is expected to be low over the vacation period." (In-house travel agency)
In the next three months (April-June), we anticipate that the plummeting overseas travel market will show some signs of improvement, however the slump is expected to continue.

Summary

 

During the current period, the overseas travel market deteriorated even more than was predicted due to a number of factors that included the protracted high price of fuel. Adding to these unfavorable influences was the deterioration of the domestic and overseas business climate and a significant drop in travel to here-to-for market driver China due to uncertainty over food safety issues.
As things stand at the present time, there is no evident solution to the current climate. Added to this gloomy situation is the fact that the series of days when Golden Week holidays fall this year will make the period unsuitable for taking long trips. There are likely still difficult times ahead for the Japanese overseas travel market.

(Units: DI)

 

2006(Jan-Mar)

2006
(Jul-Sep)

2006
(Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

2007
(Jul-Sep)

2007
(Oct-Dec)

2008
(Jan-Mar)

2008
(Apr-Jun)

All Foreign

Travel

- 18

9

-6

-2

- 10

- 7

- 11

- 33

- 28

*- 13




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

*Indicates forecast figures from the March, 2008 Survey

 

2006
(Jul-Sep)

2006

(Oct-Dec)

2007
(Jan-Mar)

2007
(Apr-Jun)

2007
(Jul-Sep)

2007
(Oct-Dec)

2008
(Jan-Mar)

2008
(Apr-Jun)

Full service travel agency

14

- 12

0

- 14

- 12

- 16

- 47

- 35

Overseas travel wholesaler

12

- 22

- 11

- 28

- 20

- 27

- 42

- 58

Overseas travel specialist agency

- 11

9

- 40

9

9

0

- 63

- 38

First-tier retailer

7

- 4

18

- 10

- 24

- 22

- 40

- 35

Second-tier retailer

- 5

- 11

- 10

- 19

- 6

- 3

- 27

- 22

In-house travel agency

47

20

10

21

11

- 6

- 13

- 10

 

Trends in overseas travel demand (by customer segment)

Senior and business/technical visit travel DI, which had been performing comparatively strongly, fell back and joined the other segments in negative figures.

Although the honeymoon and incentive segments are forecast to make slight gains in the next three months, the overall slump is expected to be ongoing.





 

 

In terms of DI by customer segment, in comparison with three months ago (October-December), the business/technical visit, senior and honeymoon segments declined across the board, falling by more than 10 points each. As a result, all segments are now in negative territory.
No segment performed better in comparison with the same period last year and the business/technical visit, incentive and female office worker categories all fell nearly 20 points.
Although the honeymoon and incentive segments are expected to show some growth over the next three months (April-June), the end of the graduation trip period will see a significant fall in the student segment DI. This drop combined with other factors is expected to ensure continued poor performance in the overseas travel market.

(Units: DI)

 

 

2007
(Jan-Mar)

2007
(Apr-Jun)

2007
(Jul-Sep)

2007
(Oct-Dec)

2008
(Jan-Mar)

2008
(Apr-Jun)

Honeymoon

- 42

- 36

- 39

- 35

- 49

- 41

Family

- 27

- 28

- 6

- 36

- 41

- 41

Female Office Worker

- 32

- 35

- 26

- 44

- 50

- 50

Middle-aged (45-59)

-

-

-

-

- 29

- 62

Senior (See note 2)

2

6

2

1

- 13

- 10

Incentive

- 24

- 29

- 32

- 38

- 43

- 36

Business/technical visit

4

1

1

0

- 18

- 15

Note 1: Students were added from March, 2008.
Note 2: Seniors (Previously OAPs) are customers aged 60 or over.

 

 

Trends in Overseas Travel Demand (by destination segment)

The DI for travel to China plunged while the Asia travel DI also took a beating, leaving no segment showing positive DI figures. Micronesia, Hawaii and Oceania, all segments which showed some growth this period, are expected to fall again over the next three months. Poor performance in the market in general is expected to continue.







In DI by destination segment, the tumble in the China travel DI continued, with this segment worsening by a further 31 points in comparison with three months ago (October-December). Furthermore, DI for the long-haul destinations - Europe and the U.S./Canada - burdened with high fuel surcharges also fell by more than 10 points. With the decline in DI for travel to China and Asia, there were no segments posting positive figures during the period.
Looking at DI in comparison with the same period last year, China was approximately 50 points down, Europe was off 20 points, and the U.S./Canada and Asia all 10 points down from last year.

An overall slump is forecast for the next three months (April-June). Although the DI for Europe and China is expected to rebound, DI for the Micronesia, Hawaii and Oceania segments are expected to decline, likely cancelling any gains made during this period.

(Units: DI)

 

 

2007
(Jan-Mar)

2007
(Apr-Jun)

2007
(Jul-Sep)

2007
(Oct-Dec)

2008
(Jan-Mar)

2008
(Apr-Jun)

Hawaii

- 29

- 35

- 21

- 34

- 31

- 35

US/Canada

- 35

- 41

- 36

- 34

- 47

- 46

Europe

- 7

- 1

0

- 14

- 28

- 22

Oceania

- 36

- 47

- 41

- 44

- 41

- 45

Micronesia

- 29

- 41

- 22

- 35

- 25

- 35

China

20

27

22

2

- 29

- 24

Asia

9

- 3

6

3

- 1

- 3

About the Survey on Travel Market Trends

In January 2008, JATA (Japan Association of Travel Agents) asked all member companies to register as survey monitors and 618 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 18, 2008 to Monday, Mar 3
Registered companies: 618
Responding companies: 275
Response rate: 44.5%

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

37

Overseas travel wholesaler

A dedicated overseas travel wholesaler

24

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

26

Second-tier retail agency

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

118

In-house travel agency

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

44


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