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JATA Independent Surveys

(June 24, 2009)
Overseas and Domestic DI fell further on the back of the outbreak of the current H1N1 flu. However a recovery is expected once the current situation has been brought under control.
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 to late May 2009, overseas and domestic DI continued to fall in the wake of the outbreak of the new H1N1 flu. However figures are expected to recover in three months if the situation brought under control.


Business Activity for the Overseas Travel Market Overall

All of the positive momentum gained through the decrease in fuel surcharges and strong yen has been stalled as a result of the outbreak of the H1N1 flu.
There is however cause for hope for a recovery with expectations for the abolishment of fuel surcharges and increased calm over the current H1N1 flu outbreak.


Current Situation: The overseas travel market has been hit hard by the outbreak of the H1N1 flu.
"Tour bookings looked promising over April due to the effects of the strong yen and big falls in fuel surcharges, however, the recent outbreak of the H1N1 flu has resulted in a continued spate of cancellations for all destinations." (Full-service travel agency)
"Company business trips are on the decline due to the current global economic climate and this trend is expected to continue for some time into the future." (Second-tier retail agency)
Overseas Travel DI went against forecasts made three months ago and felt another 8 points to -80.

Outlook for the next three Months (July to September): There is hope for the abolishment of fuel surcharges and increased calm over the current H1N1 flu outbreak.
"An end to concern over the new H1N1 flu should see a recovery in travel demand. The strong yen and expectations over the abolishment of fuel surcharges are also providing a much needed boost for the overseas travel market." (Second-tier retail agency)
"Business travel is on the decline in the wake of the current global economic crisis, however, the summer leisure market is gaining momentum." (Second-tier retail agency)
The overseas travel market is expected to show some signs of recovery over the next three months (July to September) and is expected to improve by 8 points.

Summary
Although restrictions on company business trips remained tight, the overseas travel market was showing signs of recovery in the wake of falling fuel surcharges and a strong yen. This however has been countered by the outbreak of the new H1N1 flu.
With the scheduled abolishment of fuel surcharges in July, the current consensus is that the demand for travel will begin to pick up again in line with increased calm over the H1N1 flu.


(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 -10 -11 -33 -53 -62 -64 -72 -80 -72
*-57




* Prospective figures for Mar 2009 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 -16 -47 -67 -81 -81 -66 -76 -61
Overseas travel wholesaler -27 -42 -73 -82 -67 -85 -84 -60
Overseas travel specialist agency 0 -63 -28 -64 -64 -82 -100 -100
First-tier retail agency -22 -40 -71 -73 -80 -81 -77 -77
Second-tier retail agency -3 -27 -48 -60 -53 -62 -74 -70
In-house travel agency

-6 -13 -39 -36 -54 -84 -95 -86

Trends in Overseas Travel Demand (by customer segment)

All customer segments worsened over the three months under review. However, all segments including the student and family segments are expected to show some improvement over the next three months.

In comparison with the three months from January to March, customer segment DI, in particular the student, honeymoon, senior and business/technical visit segments fell by more than 10 points. Compared to the same time last year, the business/technical visit segment was down a massive 65 points while the incentive and senior segments also fell by more than 30 points.
With the approaching summer vacation period, the family segment is expected to increase 10 points with all other segments forecast to gain in the region of five points over the next three months (July to September).



  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 -53 -63 -56 -52 -68 -64
Family -57 -67 -78 -74 -77 -67
Female office worker -61 -73 -72 -69 -73 -66
Students -75 -74 -82 -63 -82 -74
Senior* -30 -38 -51 -46 -62 -61
Incentive -54 -58 -72 -79 -88 -85
Business /technical visit -21 -28 -51 -73 -86 -80
*Senior (previously Silvers) are customers aged 60 or over

Trends in Overseas Travel Demand (by destination segment)

The DI for China rose significantly followed, albeit by a lesser margin, by Europe.
Destinations including Europe, Hawaii, Oceania and Micronesia are all expected to show some improvement over the next three months.

In comparison with the three months from January to March, destination segment DI for the relatively strong performing Asia dropped 19 points with Hawaii, Micronesia and America/Canada also falling by more than five points. On the other hand, the DI for China and Europe increased by 14 points and three points respectively.
Compared to the same period last year, Asia, America/Canada, Europe, Hawaii and Micronesia all showed falls of around 30 points while Oceania and China fell by 19 points and eight points respectively.
Over the next three months (July to September), Europe and Hawaii are expected to increase by six points while all other destinations are expected to remain relatively stable.



  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 -42 -67 -67 -63 -71 -65
USA / Canada -52 -68 -65 -79 -84 -84
Europe -35 -49 -57 -70 -67 -60
Oceania -60 -80 -73 -76 -79 -75
Micronesia -39 -57 -62 -61 -68 -65
China -60 -70 -71 -82 -68 -66
Asia -24 -41 -48 -39 -58 -59

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 627 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 11, 2009 to Monday, May 25, 2009
Registered companies: 627
Responding companies: 246
Response rate: 42.1%


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 34
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 9
Domestic travel wholesaler A dedicated domestic travel wholesaler 6
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 112
In-house travel agency A travel agency which mainly handles travel arrangements for its parent company 46

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