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JATA Independent Surveys

(25 June 2008)

Survey of Travel Market Trends (June 2008)


High fuel prices and the massive Sichuan earthquake contributed to further worsening of the Overseas Travel DI. The Domestic DI also experienced slow decline. Although both are expected to improve over the next three months, the Overseas Travel DI will likely remain low.


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 type of travel, destination and customer segment.

Describing Conclusions of the Survey Outline

According to the “19th JATA Survey on Travel Market Trends” conducted from mid-May 2008, the overseas travel market, which seemed to have bottomed out, confounded expectations by worsening even further. The domestic travel market also declined.

Even with the prospects for improvement in both overseas and domestic travel during the next three months, the Overseas Travel DI is expected to remain low.

Business Activity for the Overseas Travel Market Overall

China, which was already down due to problems over food safety, worsened further after the Sichuan earthquake.

Despite seeming to have hit bottom, the Overseas Travel DI fell a further 20 points on continued high fuel prices and other factors.

Prospects for the next three months, which correspond to the summer vacation season, call for only a slight upturn.

Current Situation: The combination of a major earthquake in China to which travel was already down, worsening economic conditions in Japan and high fuel prices continued to cause a decline in the Overseas Travel DI.

 

l          "China has been massively affected by the great Sichuan earthquake in addition to food and environmental problems, and cancellations have followed one after the other." (Second-tier retail agency)

l          "People shy away from travel because fuel surcharges and the domestic economy have pushed up prices." (First-tier retail agency)

l         “We are hearing from local suppliers that in general, Japanese group tours are no longer wanted. Even souvenir shops seem to be paying less attention to Japanese customers.

l         Although it appeared that the downturn in overseas travel had bottomed out, the Overseas Travel DI confounded expectations and fell a further 20 points.

 

Outlook for the Next Three Months (July to September)

Despite the arrival of the peak summer travel season, stagnant demand caused by the impact of fuel surcharges is inevitable.

 

l          "China has suffered its worst-ever year, despite this being the Olympics year." (Opinion of overseas travel wholesaler)

l          "The high fuel surcharge prices are likely to affect summer family vacations as well." (First-tier retail agency)

l          In the next three months (July to September), a slight increase will be evident, but the Overseas Travel DI looks set to continue at a low level..

Summary

 

The overseas travel market will face trouble both at home and overseas. Japanese will continue to move away from traveling abroad due to the worsening economic outlook and high fuel surcharges. Among overseas suppliers there will be an increase in incidents where Japanese group tour travelers are no longer given priority.

The underpinnings of the China market are lost since the country suffered an enormous earthquake disaster at a time when the market was already down. There are very few operators pinning their hopes on the upcoming Olympics and no real demand for summer travel there can be expected.

(Units: DI)

 

2 years Ago (Apr to Jun)

1.5 years ago (Oct to Dec)

15 months ago (Jan to Mar)

1 year ago (Apr to Jun)

9 months ago (Jul to Sep)

6 months ago (Oct to Dec)

3 months ago (Jan to Mar)

Current
(Apr to Jun)

Next 3 months (Jul to Sep)

All foreign travel

0

- 6

- 2

- 10

- 7

- 11

- 33

- 53

- 47

*- 28




* Prospective figures for Mar 2008 survey

 

1.5 years ago (Oct to Dec)

15 months ago (Jan to Mar)

1 year ago (Apr to Jun)

9 months ago (Jul to Sep)

6 months ago (Oct to Dec)

3 months ago (Jan to Mar)

Current (Apr to Jun)

Next 3 months (Jul to Sep)

Full service travel agency

- 12

0

- 14

- 12

- 16

- 47

- 67

- 42

Overseas travel wholesaler

- 22

- 11

- 28

- 20

- 27

- 42

- 73

- 67

Overseas travel specialist agency

9

- 40

9

9

0

- 63

- 28

- 36

First-tier retail agency

- 4

18

- 10

- 24

- 22

- 40

- 71

- 77

Second-tier retail agency

- 11

- 10

- 19

- 6

- 3

- 27

- 48

- 40

In-house travel agency

20

10

21

11

- 6

- 13

- 39

-35



Trends in Overseas Travel Demand (by customer segment)

DIs continued to fall for all customer segments, and the levels were down significantly from the same period last year.

Prospects for the next three months call for an overall increase, starting with the student segment, but stagnation will continue.

l       Compared with the DIs by customer segment three months ago (January to March), not only did the student segment fall by nearly 50 points, but the senior, families, single women and incentive tour segments all also fell more than 10 points and continue to worsen. All customer segments were down substantially compared to the same period last year, with the senior segment 36 points lower.

l        In the next three months (July to September), with the start of the peak summer vacation season, improvements are likely for all segments, with two-digit increases expected for the family and student segments. Nevertheless, the substantial gap with the DI levels for the same period the previous year will persist.

(Units: DI)

 

 

1 year ago
(Apr to Jun)

9 months ago
(Jul to Sep)

6 months ago
(Oct to Dec)

3 months ago
(Jan to Mar)

Current
(Apr to Jun)

Next 3 months
(Jul to Sep)

Honeymoon

- 36

- 39

- 35

- 49

- 53

- 51

Family

- 28

- 6

- 36

- 41

- 57

- 39

Female office worker

- 35

- 26

- 44

- 50

- 61

- 52

Students(See Note 1)

-

-

-

- 29

- 75

- 60

Senior (See Note 2)

6

2

1

- 13

- 30

- 27

Incentive

- 29

- 32

- 38

- 43

- 54

- 52

Business /technical visit

1

1

0

- 18

- 21

- 20

  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)

China worsened even further, and Asia, which has been relatively stable, suffered a decline. All destinations were worse than the previous three-month period.

Over the next three months, the generally low levels are expected to continue, despite the prospect of slight improvement for Hawaii, the Mainland USA and Canada.

l       Looking at DI by destination, China continues to fall, and is 31 points worse than three months ago (January to March). Other destinations such as Asia and Oceania have also fallen approximately 20 points, and Micronesia and Hawaii have fallen by 10 points or more. All destinations have worsened.

l       Compared to the same period last year, not only has China plamnated by approximately 90 points, but Europe is also down by 34 points and Asia by 21 points. Only Micronesia is holding to the same level.

l       In the next three months (July to September), despite the prospect of some improvement for Hawaii, the Mainland,USA, and Canada, China looks set to fall another 4 points and other destinations to remain flat. The market stagnation looks set to continue.

 

 

(Units: DI)

 

 

1 year ago
(Apr to Jun)

9 months ago
(Jul to Sep)

6 months ago
(Oct to Dec)

3 months ago
(Jan to Mar)

Current
(Apr to Jun)

Next 3 months(Jul to Sep)

Hawaii

- 35

- 21

- 34

- 31

- 42

- 34

USA / Canada

- 41

- 36

- 34

- 47

- 52

- 46

Europe

- 1

0

- 14

- 28

- 35

- 33

Oceania

- 47

- 41

- 44

- 41

- 60

- 58

Micronesia

- 41

- 22

- 35

- 25

- 39

- 38

China

27

22

2

- 29

- 60

- 64

Asia

- 3

6

3

- 1

- 24

- 23

 

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 607 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 12, 2008 to Monday, May 26
Registered companies: 607
Responding companies: 247
Response rate: 40.7%

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

30

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

7

First-tier retail agency

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

34

Second-tier retail agency

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

96

In-house travel agency

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

40


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