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JATA Independent Surveys

(24 September 2008)

Survey of Travel Market Trends (Sep 2008)


High fuel surcharges and lack of confidence in the global economy saw the Overseas Travel DI plummet. On the other hand, the domestic travel market profited from the downturn in overseas travel. The Overseas Travel DI is expected to continue on its downward spiral in the following three months, with the Domestic DI also expected to follow suit.

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 travel type, destination and customer segment.

Conclusion Summary

According to the "JATA Survey on Travel Market Trends" conducted from late July to mid August 2008, the overseas travel market worsened further on soaring fuel surcharges, however the shift to domestic travel provided a favorable turn in that market. The overseas travel market is expected to continue on its downward spiral over the next three months, and forecasts suggest the domestic market will follow suit.


Business Activity for the Overseas Travel Market Overall

The Overseas Travel DI fell another nine points as a result of falling demand for overseas travel during the summer vacation season among families who shied away from long-haul destinations due to high fuel surcharges. The following three months provide little hope for optimism.

Current Situation: Demand fell short of expectations over the summer vacation season and The Overseas Travel DI continued to fall.






 

"Family package tour bookings are down despite expectations for the summer vacation season. Fuel surcharges are having a significant impact on demand."
(Overseas travel specialist agency)
" The impact of fuel surcharges has caused a shift from overseas travel to domestic travel."
(Overseas travel wholesaler)
The overseas travel market continues to perform badly with the DI falling another nine points, in contradiction to previous forecasts.

Outlook for the Next Three Months (October to December):
The family and business travel segments are expected to continue on their current downward trend with no indication of improvement over the following three months.






High airfares and fuel surcharges are beginning to have an impact on business travel, resulting in a spate of class downgrades and fewer bookings.
(Second-tier retailer)
We have little hope for advance bookings from the family segment from autumn on. (Second-tier retailer)
No relief from the high fuel surcharges is expected over the following three months (Oct.-Dec.) and the outlook for the overseas travel market remains grim.

Summary

 

Demand from the family segment over the summer vacation season fell well short of the previous year, and the overseas travel market continued on its downward spiral. High fuel surcharges have lead to an increasing shift towards domestic travel. The business travel segment is also cutting back, with conditions unlikely to improve in the near future.

(Units: DI)

 

2 years Ago (Jul to Sep)

1.5 years ago (Jan to Mar)

15 months ago (Apr to Jun)

1 year ago (Jul to Sep)

9months ago (Oct to Dec)

6 months ago (Jan to Mar)

3 months ago (Apr to Jun)

Current
(Jul to Sep)

Next 3 months (Oct to Dec)

All foreign travel

0

- 2

- 10

- 7

- 11

- 33

- 53

- 62

- 66

*- 47







* Prospective figures for Jul 2008 survey

 

1.5 years ago  (Jan to Mar)

15 months ago (Apr to Jun)

1 year ago  (Jul to Sep)

9 months ago (Sep to Dec)

6 months ago (Jan to Mar)

3 months ago  (Apr to Jun)

Current (Jul to Sep)

Next 3 months (Oct to Dec)

Full service travel agency

0

- 14

- 12

- 16

- 47

- 67

- 81

- 74

Overseas travel wholesaler

- 11

- 28

- 20

- 27

- 42

- 73

- 82

- 57

Overseas travel specialist agency

- 40

9

9

0

- 63

- 28

- 64

-73

First-tier retail agency

18

- 10

- 24

- 22

- 40

- 71

- 73

- 81

Second-tier retail agency

- 10

- 19

- 6

- 3

- 27

- 48

- 60

- 67

In-house travel agency

10

21

11

- 6

- 13

- 39

- 36

- 58

Trends in Overseas Travel Demand (by customer segment)

The family and female office worker segments continue to slide despite the peak summer vacation period.
The downturn in the family segment is expected to continue over the next three months, with a similar trend in the overseas travel market overall.




In terms of the DIs by customer segment, the student segment remained steady, but all other customer segments experienced trended downward, with the female office worker, honeymoon and family segments falling 10 points or more.
In comparison with the same period last year, the family segment suffered a substantial drop of 61 points. The female office worker and senior segments both dropped over 40 points and the business/technical visit, incentive and honeymoon segments all fell over 20 points.
The family, student and business/technical segments are expected to continue falling over the next three months (Oct.-Dec.) sustaining a drop of approximately five points. Other customer segments should remain steady; however none are expected to show substantial growth.

(Units:DI)

 

1 year ago
(Jul to Sep)

9 months ago
(Oct to Dec)

6 months ago
(Jan to Mar)

3 months ago
(Apr to Jun)

Current
(Jul to Sep)

Next 3 months
(Oct to Dec)

Honeymoon

-39

-35

- 49

- 53

- 63

- 61

Family

-6

- 36

- 41

- 57

- 67

- 72

Female office worker

-26

- 44

- 50

- 61

-73

-74

Students(See Note 1)

-

-

- 29

- 75

- 74

- 79

Senior (See Note 2)

2

1

- 13

- 30

- 38

- 37

Incentive

- 32

- 38

- 43

- 54

- 58

-55

Business /technical visit

1

0

-18

- 21

- 28

-32

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

Trends in Overseas Travel Demand (by destination segment)

All overseas destinations saw double-digit declines, including China, which played host to the Olympics.
This trend is likely to continue, with Europe expected to drop another nine points over the next three months..






Looking at DI by destination, all destinations fell by double digits in comparison to the three-month period from April to June. Hawaii and Oceania both fell by more than 20 points, and China, despite hosting the Olympic games, also dropped by more than 10 points. In comparison with the same period last year, China suffered a substantial drop of 92 points. Europe, Asia and Hawaii all fell more than 40 points while Oceania, Micronesia and US mainland/Canada dropped by more than 30 points.
Europe is expected to see a further decline of nine points over the next three months (Oct.-Dec.). No major movement downward is expected for other destinations, but unfavorable conditions are likely to continue.

(Units: DI)

 

1 year ago
(Jul to Sep)

9 months ago
(Oct to Dec)

6 months ago
(Jan to Mar)

3 months ago
(Apr to Jun)

Current
(Jul to Sep)

Next 3 months
(Oct to Dec)

Hawaii

- 21

- 34

- 31

- 42

-67

-64

USA / Canada

- 36

- 34

- 47

- 52

- 68

- 69

Europe

0

- 14

- 28

- 35

- 49

-58

Oceania

- 41

- 44

- 41

- 60

- 80

- 77

Micronesia

- 22

- 35

- 25

- 39

- 57

- 57

China

22

2

- 29

- 60

-70

- 68

Asia

6

3

- 1

- 24

- 41

- 41

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 598 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 Friday, July 25, 2008 to Tuesday, August 26
Registered companies: 598
Responding companies: 249
Response rate: 41.6%

 

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

33

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

11

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

29

Second-tier retail agency

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

97

In-house travel agency

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

41

 

 

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