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JATA Independent Surveys

(1 April 2009)
Overseas and Domestic DI continued on downward spiral as a result of the current global economic crisis. Although the overseas travel market is expected to pick up in the wake of further decreases in fuel surcharges, the domestic market is expected to remain flat.
Headline


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 mid-February to early March 2009, the overseas and domestic travel markets continued to flag in the wake of the severe deterioration of the global economy with domestic DI was hit particularly hard falling lower than forecasted figures. The forecast for the next three months hold,some hope for a turnaround in the overseas travel market as a result of falling fuel surcharges, however, the domestic market has little to look forward to and is expected to remain flat.


Business Activity for the Overseas Travel Market Overall

The Overseas DI fell to a new low due to a slump in consumer spending and corporate belt-tightening in the face of the current global economic downturn. One exception was Korea which emerged as a popular destination due to the weak won. Demand is expected to pick up for long-haul destinations on the back of falling fuel surcharges which should provide the overseas DI with a needed boost..


Current Situation:The overseas travel market continues to falter in the midst of the current economic downturn, but Korea is performing strongly.
"The current situation could not get any worse. Consumer spending is down and business trips are a non-reality as a result of the current economic climate." (In-house travel agency)
"While the downturn in the economy continues to make headlines, Korea is attracting large numbers of visitors due to the weak won." (Second-tier retail agency)
Overall, the overseas DI fell another 8 points, and at -72, is approximately 40 points below where it was during the same period last year.

Outlook for the next three wonths (April to June): The overseas travel market is expected to pick up with increased demand resulting from reduction in fuel surcharges.
"Significant decneeses in the price of fuel surcharges are predicted to increase demand for long-haul destinations. Korea is also expected to continue to perform strongly." (Full-service travel agency)
"We expect to see a slight improvement from April onwards on the back of reduced fuel surcharges." (Overseas travel wholesaler)
The downward spiral is predicted to come to an end over the next three months (April to June) with points expected to increase by 15 points.

Summary
The situation surrounding the overseas travel market has stepped up in severity with consumer spending down and companies clamping down on business trips as one way of reducing costs and mitigating financial insecurity in the current economic downturn. While destinations in Asia, such as Korea, have performed strongly due to the weak won, demand for long-haul destinations such as Europe is also expected to increase on the back of falling fuel surcharges.


(Units: DI)

 

2 years ago (Jan to Mar) 1.5 years ago (Jul to Sep) 15 months ago (Oct to Dec) 1 year ago (Jan to Mar) 9months ago (Apr to Jun) 6months ago (Jul to Sep) 3 months ago (Oct to Dec Current (Jan to Mar) Next 3 months (Apr to Jun)
All foreign travel -2 -7 -11 -33 -53 -62 -64 -72 -57
*-69





* Prospective figures for Dec 2008 survey

 

1.5 years ago (Jul to Sep) 15 months ago (Oct to Dec) 1 year ago (Jan to Mar) 9 months ago (Apr to Jun) 6 months ago (Jul to Sep) 3 months ago (Oct to Dec) Current
(Jan to Mar)
Next 3 months (Apr to Jun)
Full- service travel agency -12 -16 -47 -67 -81 -81 -66 -41
Overseas travel wholesaler -20 -27 -42 -73 -82 -87 -85 -63
Overseas travel specialist agency 9 0 -63 -28 -64 -64 -82 -73
First-tier retail agency -24 -22 -40 -71 -73 -80 -81 -55
Second-tier retail agency -6 -3 -27 -48 -60 -53 -62 -48
In-house travel agency

11 -6 -13 -39 -36 -54 -84 -86

Trends in Overseas Travel Demand (by customer segment)

Business/technical visits and the incentive segments all continued to fall, bit the student segment saw a significant increase with the arrival of the student holiday season. Other customer segments also showed a slight improvement. Further increases are predicted over the next three months in all segments, with the exception of the student segment..

In comparison with the three months from October to December, customer segment DI for the business, technical visit segment, saw a significant fall of 22 points, and the incentive segment also dropped by seven points. On the other hand, the student segment jumped 19 points during the school holiday season and all other segments showed a slight improvement. Compared to the same time last year, the business/technical visit segment was down 55 points while the incentive, student, family and senior segments also fell by more than 30 points. The honeymoon segment is sitting in approximately the same position as last year.
Although the student segment is predicted to drop back again over the next three months (April to June), the senior and family segments are expected to increase by approximately 10 points. All other segments are forecast to gain in the region of five points.



  1 year ago (Jan to Mar) 9 months a go (Apr to Jun) 6 months ago (Jul to Sep) 3 months ago (Oct to Dec) Current (Jan to Mar) Next 3 months (Apr to Jun)
Honeymoon -49 -53 -63 -56 -52 -45
Family -41 -57 -67 -78 -74 -65
Female office worker -50 -61 -73 -72 -69 -65
Students -29 -75 -74 -82 -63 -70
Senior* -13 -30 -38 -51 -46 -32
Incentive -43 -54 -58 -72 -79 -76
Business /technical visit -18 -21 -28 -51 -73 -70
*Senior (previously Silvers) are customers aged 60 or over

Trends in Overseas Travel Demand (by destination segment)

The DI for Asian destinations increased and is posticated reasonably well compared to other destinations.
On the other hand, the DI for America/Canada, Europe and China all fell sharply.
The DI for Europe is predicted to show some turn around in the next three months.

In comparison with the three months from October to December 2008, the DI for Asia, including the currently popular Korea, increased by nine points and Hawaii gained four points. On the other hand, America/Canada, Europe and China all fell by more than 10 points. Compared to the same period last year, all destinations dropped sharply with China falling 53 points and all other destinations falling in the region of 30-40 points.
Although the student segment is predicted to drop back again over the next three months (April to June), the senior and family segments are expected to increase by approximately 10 points. All other segments are forecast to gain in the region of five points.



  1 year ago (Jan to Mar) 9 months a go (Apr to Jun) 6 months ago (Jul to Sep) 3 months ago (Oct to Dec) Current (Jan to Mar) Next 3 months (Apr to Jun)
Hawaii -31 -42 -67 -67 -63 -59
USA / Canada -47 -52 -68 -65 -79 -75
Europe -28 -35 -49 -57 -70 -59
Oceania -41 -60 -80 -73 -76 -79
Micronesia -25 -39 -57 -42 -61 -46
China -29 -60 -70 -71 -62 -74
Asia -1 -24 -41 -48 -39 -33
*Senior (previously Silvers) are customers aged 60 or over

About the Survey on Travel Market Trends

In January 2009, JATA (Japan Association of Travel Agents) asked all member companies to register as survey monitors and 638 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 16, 2009 to Monday, Mar 2,2009
Registered companies: 638
Responding companies: 269
Response rate: 42.2%


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 35
Overseas travel wholesaler A dedicated overseas travel wholesaler 27
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 33
Second-tier retail agency

Other than the above, a travel agency with a business volume of less than 3 billion yen 110
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 46

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