The projection of the latest report from JTB, Japan’s largest travel company, on the current summer travel season (July 15-Aug. 31) estimates that it will send 222,000 Japanese travelers to visit Mainland North America (USA)—an increase of a mere half-percent increase over 2014. Even so, this looks good compared to the most recent forecast of the U.S. National Travel and Tourism Office (NTTO), which has predicted a 3 percent decline in Japanese visitors to the USA in 2015 vs. 2014. The same NTTO forecast calls for a zero percent change in arrivals in 2016.

The half percent increase looks even better when one threads through the JTB report and sees estimates of large drop-offs in outbound travel to most global regions. The modest increase in traffic to North America is due to a weaker Yen vs. the U.S. dollar, additional lift capacity to North America and some holiday combinations that create “silver weeks” later this year. Some other projections:

Major Japanese Operators

Package Sales Targets for North America

First Half of 2016 (10/1/15 to 3/31/16)

& Estimated Results for 2nd Half of 2015 (4/1/15 to 9/30/15)

Source: JTB 

A May Snapshot: Overall, total sales volume for overseas travel purchased in May 2015 at 49 major travel companies was $1.293 billion; this was down 9.2 percent over the previous year, according to the Japan Tourism Agency, which indicated that the declining value of the Japanese Yen vs. the U.S. dollar and other currencies, along with the impact of the MERS epidemic in Korea were major causes. Other notes for May 2015

• The total amount of package sales was $409.53 million dollars (-9.3 percent vs. 2014)
• The total number of customers was 225,871 persons (down 9.6 percent vs. 2014)
• Share of JTB World Vacations, JTB Business Solutions, Travel Plaza Int’l, PTS was 36.83 percent
• Share of JTB customers in total overseas departures was in May 2015was 19.4 percent (down 0.6 percent vs. 2014)
• Share of the top ten companies (listed below) of the top 49 for May 2015 was 82.4 percent.

May 2015 Total Sales

Top 20 Travel Companies in Japan

Source: Japan Tourism Agency

Summary provided courtesy of Ko Ueno, Chairman of the Japan Tour Operators Association

For a moment, nothing happened. Then…nothing continued to happen,” wrote the late British author Douglas Adams, in an appraisal that seems so sum up the outbound travel market for Japan in the second quarter of 2015, although some retail travel agents believe, that for July through September, the outlook for the U.S. is up a tick.

The latest quarterly travel trade survey conducted by the Japan Association of Travel Agents (JATA) indicates that, overall, demand for outbound travel will increase (see table below) by nine points on JATA’s diffusion index scale as customers are gradually returning to Europe, France and Britain, but still lagging behind. Asian beaches remain, according to some travel agents.

Meanwhile, family travel to Hawaii and other resort destinations is expected to grow. Travel to the USA., described by the report as “a relatively safe destination in terms of terrorism threats,”  will grow, according to some travel trade respondents to the survey that serves as the basis for the quarterly report, which shows that, overall, the current market condition is still less healthy than it was two years ago.

Overall Outbound Overseas Travel Trend for Past Two Years,

Using the JATA Diffusion Index†

† See explanation at end of article

SOURCE: Japan Association of Travel Agents

Outbound Overseas Travel Trend by Destination

Using the JATA Diffusion Index†

† See explanation at end of article

SOURCE: Japan Association of Travel Agents

Encouraging is the news, based on the JATA report, that, during Q3, demand for overseas travel will increase in all major market segment: family (+12); working women (+9); students (+8); seniors (+7); incentive (+6); business/technical visits (+5); and honeymooners (+3).

Outbound Overseas Travel Trend by Market Segment

Using the JATA Diffusion Index†

† See explanation at end of article

* Senior: Customers aged 60 or older.

** Incentive: Travel offered as an incentive to business and organization employees

SOURCE: Japan Association of Travel Agents

†A Note on the Methodology and the DI (Diffusion Index): The JATA Survey of Travel Market Trends is designed to grasp trends in the travel market based on responses to questions on current conditions 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.” For items outside their business scope, respondents select “do not handle.” 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” (including “no reply”) responses. Finally, each share is processed into the Diffusion Index (DI) by subtracting the percentage of “poor” from the percentage of “good.” The highest possible index figure is +100, and the lowest is -100. Survey period—May 19-June 3, 2015; Registered companies—611; Responding companies—351; Response rate—57.4%.

The latest quarterly report and forecast by the Japan Association of Travel Agents (JATA) for outbound overseas travel for the first quarter and second quarters of 2015 is dismal overall. From the last quarter of 2014 to the first quarter of this year, the JATA Survey of Travel Market Trends, which conducts online interviews with travel agents and operators shows that, overall, the confident factor based on bookings and prospective bookings fell by more than 40 percent (although it actually improved for the USA and Canada).

 The report said that the depreciation of the yen, fear of terrorism, and other concerns have acted as negative factors influencing customers’ willingness to travel. However, it added, the decreased fuel surcharges resulting from the lower crude oil prices have left the travel companies hopeful about an increase in demand in the future. Still, even with the surcharge news, the overall outlook is about the same for the second quarter.

Outbound Overseas Travel Trend for Past Two Years,

Using the JATA Diffusion Index†

† See explanation at end of article

Q2 Should See Minimal, if any, Increase for North America: Compared to the previous three months (October – December), Europe and Hawaii dropped by 9 and 2 points respectively for a second consecutive term. With the exception of Micronesia which dropped by 4 points, Oceania grew by 6 points, America and Canada by 3 points, China by 2 points and South Korea by 1 point, all four destinations showing a gradual recovery. Demand for Asia remained unchanged. During the next three months (April – June), demand for Europe and Oceania will not change, and the market in general is not expected to show much activity. South Korea, however is expected to stand out by improving by 9 points. China will grow by 2 points, America and Canada by 1 point, Micronesia by 1 point as all four destinations will improve. Demand for Hawaii and Asia though growing by 1 point each will decrease

Trends in Overseas Travel Demand

(by destination segment)

SOURCE: Japan Association of Travel Agents

Senior Market Outlook down Six Consecutive Quarters: Echoing reports that have come from other quarters, the JATA survey indicates that agents and operators have become increasingly pessimistic about the performance of the senior market, whose numbers have declined steadily since the last quarter of 2013.

Trends in Overseas Travel Demand

(by Market Segment)

* Senior: Customers aged 60 or older

** Incentive: Travel offered as an incentive to business and organization employees

SOURCE: Japan Association of Travel Agents

†A Note on the Methodology and the DI (Diffusion Index): TThe JATA Survey of Travel Market Trends is designed to grasp trends in the travel market based on responses to questions on current conditions 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.”  For items outside their business scope, respondents select “do not handle.” 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” (including “no reply”) responses. Finally, each share is processed into the Diffusion Index (DI) by subtracting the percentage of “poor” from the percentage of “good.” The highest possible index figure is +100, and the lowest is -100. Survey period—Feb. 9-25, 2015; Registered companies—595; Responding companies—325; Response rate—54.6%.