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JATA Independent Surveys

(17 December 2008)

Survey of Travel Market Trends (Dec 2008)

The widening effects of the current financial crisis and high fuel surcharges caused the Overseas Travel DI to fall to even lower levels. The Domestic Travel DI also followed suit in the wake of a decline in business confidence. Both the Overseas and Domestic Travel DI are expected to continue on their downward trend over the following three months.


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.
(An overview of the survey results is provided below)
According to the "JATA Survey on Travel Market Trends" conducted from late October to mid-November 2008, the overseas travel market continued to perform poorly as a result of the impact of high fuel surcharges combined with the increasing wave of financial insecurity. The domestic travel market also fell below forecasted levels unable to escape the impact of the slowing economy. Harsh conditions are expected to continue in the following three months with further falls in both the overseas and domestic markets forecasted.


Business Activity for the Overseas Travel Market Overall

The effects of the current financial crisis combined with high fuel surcharges caused a fall in the Overseas Travel DI.

Although the strong yen and falling oil prices provide some cause for optimism, the prevailing atmosphere of gloom in the current business climate is expected to result in further declines over the next three months.

Current Situation: The effects of the current financial crisis combined with high fuel surcharges have hobbled any prospect of positive growth, driving down Overseas Travel DI.

 

          "Falls in oil prices have not been reciprocated in fuel surcharges making overseas travel appear costly. This, combined with a slowing economy, has prevented any positive growth." (Full-service travel agency)

          "Falling share prices and the economic downturn are starting to have an impact on demand for business travel." (Overseas travel wholesaler)

          The DI for overseas travel in general plummeted further with figures falling in excess of 50 points compared with the same period last year.

 

Outlook for the Next Three Months (January to March): Although the strong yen and fall in oil prices do provide some cause for optimism, the Overseas Travel DI is expected to continue on its downward spiral as a result of the slowing economy.

 

          "We are hoping that the strong yen and fall in oil prices will help to spur demand for travel, however everything will hang on the condition of the economy." (Overseas travel specialist agency)

          "There has been no increase in demand for travel to date as the fall in oil prices has not been immediately reciprocated in (lower) fuel surcharges. Global financial instability is expected to lead to a further drop before we see any positive growth." (In-house travel agency)

          The economic outlook over the next three months (January to March) remains grim and the Overseas Travel DI is expected to fall to record lows.

Summary

 

With the market economy in general in recoil due to global financial instability and prevailing high fuel surcharges, the overseas travel market continued to spiral further into negative territory. Demand for overseas business travel is also revealing a downward trend with organizations feeling the bite of the financial crisis.

(単位:DI(Units: DI)

 

2 years ago (Oct to Dec)

1.5 years ago (Apr to Jun)

15 months ago (Jul to Sep)

1 year ago (Oct to Dec)

9 months ago (Jan to Mar)

6 months ago (Apr to Jun)

3 months ago (Jul to Sep)

Current
(
Oct to Dec)

Next 3 months (Jan to Mar)

All foreign travel

- 6

- 10

- 7

- 11

- 33

- 53

- 62

- 64

- 69

*- 66





* Prospective figures for Sep 2008 survey

 

1.5 years ago (Apr to Jun)

15 months ago (Jul to Sep)

1 year ago (Oct to Dec)

9months a go (Jan to Mar)

6 months ago (Apr to Jun)

3 months ago (Jul to Sep)

Current
(
Oct to Dec)

Next 3 months (Jan to Mar)

Full- service travel agency

- 14

- 12

- 16

- 47

- 67

- 81

- 81

- 69

Overseas travel wholesaler

- 28

- 20

- 27

- 42

- 73

- 82

- 87

- 83

Overseas travel specialist agency

9

9

0

- 63

- 28

- 64

- 64

- 55

First-tier retail agency

- 10

- 24

- 22

- 40

- 71

- 73

- 80

- 76

Second-tier retail agency

- 19

- 6

- 3

- 27

- 48

- 60

- 53

- 68

In-house travel agency

21

11

- 6

- 13

- 39

- 36

- 54

- 64

Trends in Overseas Travel Demand (by customer segment)

Business and technical visits plummeted 23 points. The honeymoon segment was the only segment that showed any positive growth. Apart from the upcoming student holiday season, there is no cause for optimism over the following three months.

         In comparison with the three months from July to September, the customer segment DI, in particular the business/technical visit segment saw a significant fall of 23 points, with the incentive, senior and family segments also dropping more than 10 points. On the other hand, the honeymoon segment rose seven points with several of the survey participants noting that this segment was performing strongly. All customer segments have fallen well below those of the same period last year, with the senior and business/technical visit segments dropping more than 50 points.

          Apart from the upcoming student holiday season, there is no cause for optimism over the following three months (January to March) and all other customer segment DIs are expected to fall.

(Units: DI)位:DI

 

 

1 year ago (Oct to Dec)

9months a go (Jan to Mar)

6 months ago (Apr to Jun)

3 months ago (Jul to Sep)

Current
(
Oct to Dec)

Next 3 months (Jan to Mar)

Honeymoon

- 35

- 49

- 53

- 63

- 56

- 62

Family

- 36

- 41

- 57

- 67

- 78

- 80

Female office worker

- 44

- 50

- 61

- 73

- 72

- 73

Students(See Note 1)

-

- 29

- 75

- 74

- 82

- 68

Senior (See Note 2)

1

- 13

- 30

- 38

- 51

- 53

Incentive

- 38

- 43

- 54

- 58

- 72

- 77

Business /technical visit

0

- 18

- 21

- 28

- 51

- 57

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)

Falls in previously strongly performing destinations such as Europe, Asia and Micronesia have brought DI figures down across the board and this downward trend is expected to continue for all destinations over the following three months.

 

          Destinations that performed comparatively stronger than others over the previous three months (July to September), such as Europe, Asia and Micronesia, dropped more than five points to close the gap with other destinations. The DI for all destinations have dropped significantly in comparison to those of the same period last year with Micronesia, the strongest performing destination, falling 27 points .

          Figures for all destinations are expected to fall over the next three months (January to March) with USA/Canada predicted to drop 10 points.

 

(Units: DI)(単位:DI

 

 

 

1 year ago (Oct to Dec)

9 months ago (Jan to Mar)

6 months ago (Apr to Jun)

3 months ago (Jul to Sep)

Current
(
Oct to Dec)

Next 3 months (Jan to Mar)

Hawaii

- 34

- 31

- 42

- 67

- 67

- 71

USA / Canada

- 34

- 47

- 52

- 68

- 65

- 75

Europe

- 14

- 28

- 35

- 49

- 57

- 63

Oceania

- 44

- 41

- 60

- 80

- 73

- 77

Micronesia

- 35

- 25

- 39

- 57

- 62

- 62

China

2

- 29

- 60

- 70

- 71

- 71

Asia

3

- 1

- 24

- 41

- 48

- 50

 

 

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 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, Oct 27, 2008 to Monday, Nov 10,2008
Registered companies: 593
Responding companies: 233
Response rate: 39.3%

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

31

Overseas travel wholesaler

A dedicated overseas travel wholesaler

23

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

27

Second-tier retail agency

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

89

In-house travel agency

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

43

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