Japan Travel Bureau Foundation (JTBF) has held the “18th Japanese Overseas Travel Trends Symposium” recently. At the symposium, Hiroshi Kurosu, Principal Researcher reviewed on overseas travel market which drastically slowed down in the latter half of 2012 and presented future prospects. The presentation highlighted uncertain outlook for this year’s overseas travel market.
Overseas travel market from Japan to China and Korea dropped sharply since September 2012 and its effect still continues, contrary to the JTBF’s prediction for sooner recovery made at the end of last year. Also at the end of last year, JTBF had predicted that the number of Japanese outbound travelers in 2013 to be 19 million with 2.7% increase compared with the previous year, however revised figure or a new prediction was not presented at this symposium.
【Looking Back at 2012】▼”Growing Motivation for Traveling” Pushes the Number of the Outbound Travelers to the Record High
Mr. Kurosu compiled the following factors contributed for the record high 18.46million outbound travelers in 2012.
・Growing motivation for traveling after the Great East Japan Earthquake
・Growing frequency for traveling in recent years especially among those who travel every year
・Continuing effect of internationalization of the Haneda Airport and increasing flights
・Flight seats were available for the outbound travelers because the inbound demand was weak
Among these factors, Mr. Kurosu indicated that the strongest factor for the record high outbound travelers was the “growing motivation for traveling.” He analyzed it was result of the long-term tendency of defensive living reaching the turning point in 2010, encouraged by the change in the public mind after the Earthquake. As a basis for this analysis, points such as a proportion of those spending more leisure expenditure is increasing (Leisure White Paper), leisure, housing and food are the 3 items growing for 2 consecutive years in “points to be emphasized in future living” (public opinion research by the Cabinet Office) were mentioned.
In addition, following trends appeared in association with the growing motivation.
・Travelers from lower income class, who had been restricting leisure expenditure, increased
・With the increase of online reservation, the last minute reservations grew at web sites such as airline companies
・Travelers to China and Korea decreased sharply since September 2012, but on the contrary travelers to other areas increased.
These multiple factors are said to have lead to the record high Japanese outbound travelers in 2012.
【Present Situation in 2013】▼ Stagnation in the Travelers to China and Korea- Growth Slow Down in Other Areas as Well in 2013
Since September 2012, overseas travel market from Japan to China and Korea keeps decreasing and it has not shown sign of recovery even now. Looking at the destinations of Japanese travelers, China and Korea account for about 40% of the entire share, thus effect of the delayed recovery is serious.
In 2012, decrease in the number of travelers to China and Korea was compensated by the increase of travelers to other areas, yielding to the record high outbound travelers, however the increase became small after January 2013. The number of travelers to areas other than China and Korea was no longer able to make up for the decrease for China and Korea, therefore the outbound market as a whole is stagnant.
▼Decline in the Percentage of Outbound in All Generations, Especially a Sharp Decline in Seniors- Effected by a Low Exchange Rate of Yen?
Outbound travel viewed by gender and generation, an interesting trend can be observed when comparing the period of September to December 2012 and the period of January to April 2013. It is characteristic that the outbound travel in all generation is declining, especially the figures for seniors drop sharply. Mr. Kurosu analyzes “this phenomenon is similar to what happens when a crisis occur.”
Furthermore, Mr. Kurosu gave attention to currency exchange in order to detect the cause for declining percentage of outbound. As yen become lower in Yen/Dollar and Yen/Won exchange rates, Japanese outbound travelers (or Japanese travelers visiting Korea) decrease in a same manner. He showed a view that “long-term decline in the number of outbound travelers due to low exchange rate of yen, which never occurred in the past, may be taking place at the present.”
▼Recovery of Outbound Travelers in Result of Flight Seats Increase?- No Prospect for an Increase
According to the OAG data presented by Mr. Kurosu, flights provided from January to June 2013 are prospected to increase by 1.7% compared with the previous year. Supply and demand of the fight seats are balanced stably, the seats supplied are unlikely to increase in the latter half of 2013. More seats were demanded on outbound flights from late 2011 to early 2012 subsequent to the Great Earthquake, but the needs for the seats on inbound flights inverted in 2013 due to the increased visitors from overseas.
Expansion of the Haneda Airport showed a positive effect on increasing demand for flights, however an increase of Japanese outbound travelers in result from flight seats increase cannot be expected during 2013.
▼Trends among Different Regions- Regional Airport Market is Shrinking
When Narita International Airport, Haneda Airport, Kansai International Airport and Chubu Centrair International Airport are positioned as 4 major airports in Japan and all others positioned as regional airports, a large change is occurring in the latter. According to the Statistical Survey on Legal Migrants by Ministry of Justice, outbound travelers departing from regional airports (other than 4 major airports) are showing a sharp decline. Based on information gathered from concerned parties, Mr. Kurosu analyzed that “the decline is not because of flight seats available at regional airport are declining.”
Also, the number of outbound travelers viewed by regions, a steep fall among those living outside of the 3 major metropolitan areas- Tokyo, Kansai and Nagoya, is observed. This negative growth is common among all generations, and the decline is especially drastic among females of all generations. In March and April 2013’s statistics for female travelers looked at by age groups, all age groups over 30’s mark more than 15% decrease, with notable over 20% decrease for over 50’s. Female travelers from the 3 major metropolitan areas also mark negative growth with about 10% decrease for 30’s and 10~15% decrease for over 50’s. Trends in the 3 major metropolitan areas and other areas are quite different.
【Future Prospect】▼Whole Travel Market Holds Steady, Outbound Market Slows Down
Based on a review of 2012 and the present condition of 2013, Mr. Kurosu concluded the future prospect as “ the travel market will basically keep its steady condition.” Some of the reasons he provide were, business confident improving and motivation for domestic travel growing (from JATA research)
On the other hand, slow down and decline of the overseas travel market is a temporary trend caused by external factors, and he foresees recovery stating that “the present condition differs from ‘the lost 10 years.’” He concluded that “a rebound from last year’s decline will push the market upward after September, but the growth will slow down because the highly experienced group will become the main constituent of the market.” It should also be noted that specific point of recovery or forecast on the number of outbound travelers, which was indicated in this symposium every year, was not presented this year, revealing the difficulty for making analysis.
Finally, Mr. Kurosu pointed out that obtaining flight seats will become difficult when the market recovers. This is because the number of the fights to and from Japan is not expected to increase this year. According to the data by OAG, Hawaii bound flights are one of the few flights expected to largely expand its capacity this year.
