Japan Outbound Travel

Japan Outbound Travel 2007Increasing Outbound to 20 million by 2010

Masato Takamatsu

Director and Vice President, Marketing (JTM)JATA World Tourism Congress

Tokyo, September 13th , 2007

1. Current Outbound Travel Market

2. Travel Style

3. Key Market Segments

4. Recent Topics in Japan

5. Approach To Japanese Travel Companies

Content


2. Travel Style




Content


11,791 11,934

13,579

15,29815,806

16,358

17,819

16,216 16,523

10,634

13,296

16,83116,80316,695

10,997

17,404 17,535

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Thousand persons

Japanese International Departure

Gulf WarOpening

of Kansai

Airport

Highest Yen

appreciation

in history

Asian Financial

Crisis and

implementation

of 5% service

tax

9.11

Terrorist

Attack

SARS

Source: Ministry of Justice, arranged by JTM


4.3 4.1 4.9 5.26.0

6.8 7.6 7.7 7.3 7.7 8.37.3 7.4

5.77.3 7.7 7.6

6.7 6.5

8.4

9.1 9.18.5

8.7

9.5

8.9 9.1

7.6

9.59.7 9.9

6.86.9

7.5

0

2

4

6

8

10

12

14

16

18

20

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Million

Male

Female

Source：Ministry of Justice

Overseas Departures by Gender (1990-2006)

Slow Recovery of Women vs. Growth of Male Market


2.84.1

10.4

26.5

3.4

22.0

15.3

18.920.9

5.0

8.59.0

15.0

2.7

5.4

13.1

0

5

10

15

20

25

30

0～9 10～19 20～29 30～39 40～49 50～59 60～69 70～

Male Female

Source: Ministry of Justice

in hundred thousand

Departures by Gender and Age-Group (2000)


4.85.9

15.7

5.2

24.3

22.0

14.7

27.9

23.1

5.0

11.312.1

17.3

2.9

7.7

12.7

0

5

10

15

20

25

30

0～9 10～19 20～29 30～39 40～49 50～59 60～69 70～

Male Female


in hundred thousand

Departures by Gender and Age-Group (2006)


Percentage Change from 2000 to 2006

Age groups Male Female

0~9 2.9% 2.6%

10~19 -8.7% -13.8%

20~29 -24.8% -31.0%

30~39 5.8% 8.3%

40~49 16.7% 4.9%

50~59 7.2% -5.8%

60~69 14.2% 8.2%

70+ 17.5% 23.3%

Source: Ministry of Justice “Statistics on Immigration Control”


Departure Ratio by Gender and Age-Group (2006)

4.85.9

14.715.7

5.25

24.3 23.1

27.9

22

11.3

7.7

17.3

12.1 12.7

2.9

0

5

10

15

20

25

30

0～9 10～19 20～29 30～39 40～49 50～59 60～69 70～

Male Female



Departures by Age and Gender from 1990 to 2006


6.6

7.1

7.8

8.6

9.7

10.4

10.7

11.7

12.1

12.6

12.9

12.3

11.7

11.6

11.5

11.8

12.6

12.5

12.2

10.6

11.1

12.8

13.3

14.5

16.3

12.0

11.8

11.7

10.3

9.5

9.8

9.8

9.9

9.1

8.7

8.6

7.7

7.1

6.8

6.6

6.4

10.4

11.3

12.7

14.9

16.5

17.4

17.5

16.7

15.8

9.3

9.3

8.9

8.4

7.9

6.7

5.9

5.4

5.4

5.1

4.9

5.2

5.8

5.6

5.5

5.2

7.0

6.8

7.3

7.3

6.7

6.1

5.9

5.4

4.8

7.1

6.7

6.7

6.3

5.5

5.1

4.7

4.2

3.814.0

11.0

11.0

6.0

7.0

5.0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2006

2004

2002

2000

1998

1996

1994

1992

1990

Male 0～9 10～19 20～29 30～39 40～49 50～59 60～Female 0～9 10～19 20～29 30～39 40～49 50～59 60～



0

500

1,000

1,500

2,000

2,500

2000 2001 2002 2003 2004 2005 2006

20 to 29 30 to 39 40 to 49 50 to 59 60 +

Thousand persons

Male Age Groups Departure (2006)


0

500

1,000

1,500

2,000

2,500

3,000

2000 2001 2002 2003 2004 2005 2006

20 to 29 30 to 39 40 to 49 50 to 59 60 +

Thousand persons

Female Age Groups Departure (2006)



Share of Airline Seat Supply by Airports (2006)

50.4

54.7

58.5

56.2

54.9

25.4

21.9

22.3

22.2

10.2

9.6

9.1

9.6

10.7

5.1

5.1

4.4

4.6

8.9

7.5

6.1

7.3

7.655.0

22.0

23.2

11.0

4.5

4.0 8.0

0% 20% 40% 60% 80% 100%

2001

2002

2003

2004

2005

2006

Narita Kansai Nagoya Fukuoka Other



Airport / Port No. of

Persons

Growth

Narita 9,636,548 0.6%

Kansai 3,861,045 0%

Nagoya 1,925,881 3.6%

Fukuoka 702,339 -9.6%

Haneda 422,829 17.6%

Hakata Port 136,833 -15.4%

Hiroshima 135,551 15.3%

New Chitose 110,389 -2.9%

Sendai 102,270 3.0%

Niigata 72,366 3.0%

Okayama 86,662 8.0%

Share for Airports / Port (2006)

New Chitose

Niigata

Okayama

Hiroshima

Fukuoka

Kansai

Chubu

Haneda

Narita

Sendai



(1) Tokyo – 25.35%

(2) Kanagawa – 21.5%

(3) Chiba – 18.1%

(8) Saitama – 15.19%(5) Aichi -16.11%

(4) Nara – 16.35%

(6) Osaka – 15.6%

(7) Hyogo – 15.4%

(9) Kyoto – 15.07%

(10) Fukuoka – 11.04%

Top 10 Departure Ratio by Prefecture



Top 20 Destinations (1)

Ranking (2006) Country Arrivals (Thousand)

1 China 3,746

2 Korea 2,339

3 Hawaii 1,374

4 U.S Mainland 1,345

5 Hong Kong 1,311

6 Thailand 1,294

7 Taiwan 1,164

8 Guam 953

9 Australia 653

10 France 647

Source: National (Regional) tourist offices


Ranking (2006) Country Arrival (Thousand)

11 Switzerland 596

12 Singapore 594

13 The Philippines 422

14 Canada 386

15 Vietnam 384

16 Malaysia 354

17 U.K 323

18 Saipan 270

19 Austria 268

20 Spain 261


Top 20 Destinations (2)


Japanese Arrival by Destination (1)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

U.S Mainland China Korea Hawaii Hong Kong

2000 2001 2002 2003 2004 2005 2006

Thousand persons



Japanese Arrival by Destination (2)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Taiwan Singapore Thailand Guam Australia

2000 2001 2002 2003 2004 2005 2006

Thousand persons



Growth Rates of Japanese Visitor Arrival (1)

Asia 2005/2004 2006/2005

Korea -0.1 -4.1

China 1.7 10.5

Hong Kong 7.5 8.3

Macau 38.4 30.2

Taiwan 26.6 3.3

Singapore -1.7 1.0

Malaysia 12.8 4.2

Thailand -0.5 8.9

Vietnam 20.0 19.7

The Philippines 8.7 1.5

Americas 2005/2004 2006/2005

Canada 2.2 -8.7

U.S.A 3.6 -5.4

Hawaii 2.4 -9.4

Guam 5.4 -0.3



Europe 2005/2004 2006/2005

Austria 8.6 -3.9

France 3.9 -3.0

Germany 2.1 5.3

Italy -3.4 -

Spain 15.1 44.2

Switzerland - 1.8

U.K -4.4 -2.7

Pacific 2005/2004 2006/2005

Saipan -7.8 -23.3

Australia -3.5 -5.0

New Zealand -6.1 -12.0

Growth Rates of Japanese Visitor Arrival (2)



2. Travel Style




Content

2. Travel Style

Holidays & Seasonality for Outbound Travel

0

200

400

600

800

1000

1200

1400

1600

1800

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Spring

Break

Mar20 -

Aprl5

Golden

Week

Apr29 -

May 5

End of year

New Year

Dec29 -

Jan 3

Summer

VacationJul20 - Aug31

O-Bon

Aug10 to Aug15

End of year

New Year

Dec29 -

Jan 3

in thousands


2. Travel Style

Survey Outline

1.Factual Survey of the Overseas Travel Situation

1.1 Respondents

Individual men and women who traveled overseas in 2006, live in

Tokyo, Osaka, Aichi and are of at least 15 years old.

1.2 Methodology

Respondents with experienced overseas travel in 2006 selected

by Internet survey. (Telephone survey until 2005) Questionnaires

were mailed by post to the respondents and returned upon

completion.

1.3 Period

April 2007

1.4 Valid Sample Size

2,719 respondents (person)

4,179 respondents (trip)

2. Travel Style

Purpose of Travel Overseas (1997-2006)

77.9

74.2

72.9

71.9

74.4

72.2

74.6

72.4

77.7

12.9

17.6

16.8

14.6

15.3

18.5

17.9

16.6

6.4

7.3

7.7

8.4

8.5

7.9

7.3

6.5

5.7

75.0

18.0

17.0

5.0

0% 20% 40% 60% 80% 100%

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Leisure Travel Business Travel Other

Source: Japan Tourism Marketing Co. “Factual Survey of Overseas Travel Situation”, JTB Report 2007

2. Travel Style

Purpose of Travel by Destination (2006)

77.7

78.9

53.5

74.2

59.8

89.5

90.3

82.4

80.7

79.1

74.3

88.5

16.6

41.2

16.9

32.2

5.3

2.2

1.2

2.9

6.3

13.6

11.4

90.0

8.0

15.0

0% 20% 40% 60% 80% 100%

Overall

East Asia

China

South-East Asia

U.S Mainland

Canada

Hawaii

Guam, Saipan

South Pacific Islands

Oceania

Europe, Russia

South America

Middle East, Africa and others

Leisure Travel Business Travel Other


2. Travel Style

Travel Duration (2000-2006)

22.3

30.1

35.9

38.6

33.6

26.2

6.5

4.5

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2000

2006

1-4 days 5-7 days 8-14 days 15 days and over


2. Travel Style

Travel Duration by Destination (2006)


78.7

59.7

43.9

19.0

5.9

5.5

4.6

38.9

18.2

36.8

37.1

57.2

71.4

55.9

56.4

48.6

27.0

44.7

18.2

14.2

26.3

3.5

15.7

19.0

20.8

32.4

32.7

35.6

62.9

51.3

66.7

76.1

4.5

4.8

11.2

8.6

3.9

15.2

8.8

30.3

0% 20% 40% 60% 80% 100%

Overall

East Asia

Guam, Saipan

China

South-East Asia

Haw aii

South Pacif ic Islands

Oceania

U.S. mainland

Europe, Russia

Canada

South America


1-4 days 5-7 days 8-14 days 15 days and above

2. Travel Style

Travel Companions (2006)


2. Travel Style

Travel Companions by Destination


22.7

19.1

20.3

21.1

28.1

14.3

44.1

30.9

30.7

31.4

38.1

22.9

20.2

10.2

16.9

31.6

42.8

50.4

17.6

30.9

19.6

17.7

4.1

2.5

2.9

2.9

7.9

3.6

2.3

3.1

7.4

2.9

3.5

21.1

27.6

19.7

24.5

14.1

18.4

18.1

21.7

23.5

12.1

19.1

5.7

16.8

10.6

12.5

21.3

9.5

3.9

4.2

8.1

4.9

6.4

2.9

6.2

17.4

16.4

24.1

23.9

22.4

2.9

20.6

28.6

16.8

17.8

15.0

20.0

19.0

4.0

19.0

13.0

23.0

0% 20% 40% 60% 80% 100%

Overall

East Asia

China

South-East Asia

U.S. mainland

Canada

Hawaii

Guam, Saipan


Oceania

Europe, Russia

South America


Husband or wife Family/relatives Mother and daughter

Friends/acquaintances Fellow employees Alone

2. Travel Style

50.7

67.3

90.6

10.3

3.5

4.3

14.8

4.4

35.0

4.3

44.4

38.2

26.8

5.2

78.3

78.3

27.8

6.7

2.9

6.9

17.0

26.0

13.0

13.0

5.0 34.0

82.8

0% 20% 40% 60% 80% 100%

Overall

Holiday

Honeymoon

Visiting family and friends

Business trips

Research and field trips

Conferences and meetings

Exchange trips

Package tours Group travel Individually arranged travel Others

Travel Arrangement by Purpose (2006)


2. Travel Style

56.6

56.9

43.9

12.9

7.6

8.9

16.5

20.1

28.3

46.2

11.5

5.3

6.3

4.2

7.5

67.0

59.0

4.9 34.1

0% 20% 40% 60% 80% 100%

Once

2～3 times

4～5 times

6～9 times

10 times and above

Package tours Group travel Individually arranged travel Others

Travel Arrangement by Travel Experience (2006)


2. Travel Style

Travel Arrangement by Destination (2006)

50.7

52.8

38.2

45.2

22.7

55.3

66.9

72.5

70.6

59.2

51.1

48.6

69.9

4.4

5.2

6.5

4.0

6.6

8.8

7.2

2.6

38.2

36.2

44.0

45.3

64.4

38.2

24.4

15.1

20.6

27.4

40.0

40.0

23.0

6.7

5.7

11.4

6.1

8.9

5.2

4.7

5.9

6.2

6.3

11.4

6.2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Overall

East Asia

China

South-East Asia

U.S. mainland

Canada

Hawaii

Guam, Saipan


Oceania

Europe, Russia

South America

Middle east, Africa and Others

Package Tours Group TravelIndividually Arranged Travel Others


2. Travel Style

Travel Reservation Method (2006)

％

Internet

38.0%

Travel agent

30.5%

Mail order,

telephone

17.1%

Airlines

4.8%

Other

4.8%


2. Travel Style

Travel Reservation Method (2001-2006)

0

5

10

15

20

25

30

35

40

45

50

2001 2002 2003 2004 2005 2006

Travel firms Internet Mail order/telephone Airlines Others

％


2. Travel Style

Travel Reservation Method

by Overseas Travel Experience (2006)

0

5

10

15

20

25

30

35

40

45

50

1 time 2-3 times 4-5 times 6-9 times 10+ times

Travel firms Internet Mail order, telephone Airlines Others


％

2. Travel Style

Travel Reservation Method by Market Segment (2006)


29.6

47.6

37.2

39.3

33.1

30.5

38.9

51.4

40.8

31.8

39.4

27.3

33.3

25.3

32.9

29.4

27.1

29.1

39.7

22.6

33.6

43.0

29.4

26.9

14.1

10.0

13.0

18.0

27.1

8.5

11.1

15.2

16.6

18.4

18.4

25.5

7.0

3.0

6.5

5.5

3.8

7.8

4.2

4.0

4.4

3.8

0% 20% 40% 60% 80% 100%

Male students

Single men

Married men

Middle-aged men

Elderly men

Female students

Single women (15-29)

Single women (30-44)

Married women-employed

Married women-housewives

Middle-aged women

Elderly women

Internet Travel firm Mail order, telephone Airlines


2. Travel Style




Content


3.1 Baby Boomers

3.1 Baby Boomers


3.1 Baby Boomers

Japanese Population 2006

0～ 4

5～ 9

10～14

15～19

20～24

25～29

30～34

35～39

40～44

45～49

50～54

55～59

60～64

65～69

70～74

75～79

80+

6,000 5,000 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000 5,000 6,000

MaleFemale

Baby boomers


Baby Boomers

Born between (1946-1951) / Current market share of 8.5%


3.1 Baby Boomers

0 20000 40000 60000 80000 100000 120000 140000 160000 180000

Tokyo

Kanagawa

Osaka

Aichi

Chiba

Saitama

Hyogo

Fukuoka

Shizuoka

Kyoto

Ibaraki

Hokkaido

Hiroshima

Gifu

Nara

Male

Female

Top 15 Prefectures of Departure for Baby Boomers

Source: Japan bluebook 2006/2007

Persons


3.1 Baby Boomers

Financial Background of Baby BoomerYearly Disposable Income

Source: Statistical data book on the Life Consciousness of Mature people 2006

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

under 5M 5-10M 10-15M 15+M

Million yen


3.1 Baby Boomers

Current employment situation

55-59 age group


46.3

34.2

7.2

4.95.2 2.3

Company employed

Casual employed

Self-employed

Other

Don't know

Don't understand

%


3.1 Baby Boomers


Reasons for Desires to Continue Employment

0 10 20 30 40 50 60

Don't understand

Other reasons

Don't want to stay at home

Work is one's life

To be active and healthy

Use one's experience and skills

Contribute to the society

Play a role in the society

Necessity to live

％


3.1 Baby Boomers

Characteristics of Baby Boomer

1. Concerns for the health and the environment Purchasing organic foods, vitamins and supplements. Volunteering in NPO

environmental activities.

2. Desire to feel young Their heart is still young and they want to look young.

3. Importance of safety and independence High concerns in regards to security and do not want to become a burden on

their children.

4. Enjoy living Strong feelings of doing what they like.

5. Intellectual curiosity Desire to study intellectual materials i.e. arts, classical concerts.

6. Contributing to the society Even after retiring they still desire to contribute to the society i.e. through NPO

activities.

7. Distinct preferences

Desire to have their own individual preferences met.


3.1 Baby Boomers

Preferences when Traveling

Source: 2006 Leisure White Book – Baby boomers, 2007 issues and future trend in holidays

％0 10 20 30 40 50 60 70 80 90 100

I want to see nature

I want to visit traditional rather than modern places

I want to go to a place I haven't been to

I want to go with campanions

I want to stay 2 nights or more

I want to study about the destination before I go

I want to explore places in depth

I prefer quality rather than price

I want to arrange the trip myself

I want a trip filled with experiences rather than justobservation

Male

Female


3.1 Baby Boomers

Baby Boomer Style of Travel

In all surveys conducted in the past, results reveal that to ‘travel’ is the most preferred

activity after retirement.

Travel companions will depend on the activities at the destination.

Famous and historical places for sightseeing, resorts and spas

⇒couples

Climbing mountains, golf, diving, sports and hobby related travels

⇒ individual or with friends

Spring and Autumn are the popular seasons after the busy seasons.

For 60+ years over 50% stay over 7 days in their trips, 50+ years 5-7 days is most

popular with around 30% preferring over 7 days.

Prefer a trip that can provide relaxation, i.e. hot springs, natural scenery, famous and

historical places.

Motivation for trips: making past dreams become reality, continuing dreams and taking

trips that reminds the „Good Old Days‟

Traveling with the family


3.1 Baby Boomers

55

46

49

32

17

18

57

52

41

33

34

39

29

16

12

24

30

39

21

48

Nature scenery

Staying in hot spring

Enjoying the traditional foods

Visiting famous and historical places

Driving

Visiting the traditional streets of the destination

Visiting world heritage sites

Going sight-seeing at a well-known place

Staying at a resort

Outdoor activities

Male

Female

Baby Boomer

- Activities Desired on Trips in the Next 10 Years

Source: 2006 Leisure White Book – Baby boomers, 2007 issues and future trend in holidays


3.2 Female Travelers




0.0

0.5

1.0

1.5

2.0

2.5

3.0

1975 1980 1985 1990 1995 2000 2005

Million

Fall in Female Travelers 20s Age Group




The Departure Ratio of Women in their 20s and 30s

0

5

10

15

20

25

30

35

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

20-29 30-39

Source: Ministry of Justice, arranged by JTM



Reasons for Changes

① Continuous decline in this population

② Unstable employment and lower income

③ The extra costs of living compared with

previous generations, i.e. mobile phone



Previous travel experience

(Avg. No.)

No. of overseas trips in the

previous year (Avg. No.)

Single women

(30-44)13.0 1.6

Married women

(employed)11.9 1.4

Married women

(housewives)11.3 1.2


30s Female Today

Background for their frequent overseas travel.

Increased share of singles.

Presently 30+% of women between ages 30-34 and 20%+ of women between 35-39

are not married.

Fewer children to look after.

Less than 30% of women aged 30-34 have children, and 50% of married women

between 35-39 have children.

Rich travel experience during 1990s when they were in their 20s



Destinations for the Single Females

25.5

17.3

8.2

4.5

4.1

3.3

2.9

2.9

0.4

0.4

25.1

5.3

0 5 10 15 20 25 30

Europe/Russia

East Asia

Southeast Asia

Hawaii

U.S Mainland

Canada

China

Oceania

Guam/Saipan

Middle East/Africa, etc


Central and South America




Activities Undertaken at Destination

30

69.0

58

55

55

28

28

15

9

7

8

0 10 20 30 40 50 60 70 80

Shopping

Natural and scenic attractions

Gourmet sampling

Historic and cultural attractions

Rest and relaxation

Art galleries and museums

Beauty treatments/Massage

Theatre performances

Visiting family/friends

Theme parks

Night tours


％



Travel Reservation Method

51.4

22.6

15.2

7.8

1.6

12.3

0 10 20 30 40 50 60

Internet

Travel firms

Mail order/telephone

Don't know

Airlines

Others

％




Travel Arrangements



2. Travel Style




Content


Asia Gateway

International Airfare Deregulation in Japan

22nd June 2007: Japanese Government announced its

consideration of international airfare deregulation

Purposes

1. Strengthening Asia as a whole, deregulating, increasing trade knowledge

and networking

2. Further communication Japan to Asia-products, people and places.

3. Increasing Japan‟s cooperation with major researches and projects to do

with international issues.

Current Actions

Revision of existing price restriction and approval of airfare pricing

Foreign LCCs may enter the market

spur competition

increasing consumer convenience


Deregulation in IT Charter Flight SystemDeregulation of ITC (Inclusive Tour Charter)

⇒ Announced 2007 May 31st , by the Ministry of Land, Infrastructure and Transport.

Northern lights, Swiss hiking, the red maple leaves in Canada and China are current destinations tour operators are focusing on.

Old Regulation New Regulation Opportunities

One is required to stay at the

carrier‟s country of location

No stay requirement The use of foreign carriers in

tour packages

All accommodation is required

to be pre-arranged

Only 50% of accommodation

needs to be pre-arranged

Some free nights can be

included into tour packages

Carriers are only permitted from

country of departure or arrival

Third country airline is permitted Wider selection of choice and

supply

Operation frequency is

restricted

Where there is no schedule on

the route, no restrictions for

same day operations

Pave the way for future

scheduled services


Low Cost CarriersAll Nippon Airlines

Announced to launch up a LCC, targeting the

Japanese-Asian market

Korean Airlines

Plans to launch LCC within the next 3 years

Jetstar (Australia)

Already operating:

Brisbane ↔ Osaka

Sydney ↔ Osaka

Economy airfares:

USD$240 – USD$300 (excluding tax)

Cairns ↔ Nagoya

Economy fares:

USD$240 (excluding tax)

Starting from Oct, 8th 2007:

Cairns ↔ Osaka


Obstacles and the Usage of Regional Airports

Lack of slots at main airports

usage of regional airports

Restriction of slots

(mainly Narita and Haneda)

High cost of main airport use

(landing / hard standing fees)

Narita

Haneda

Kansai

Hiroshima

Sendai

Niigata

Okayama

New Chitose

Chubu

Fukuoka


Purpose of survey:

consider the viewpoints of senders and receivers and seek the issues

that are Japan is facing in the overseas travel market

Questionnaire for JATA World Tourism Congress 2007


Strengths Weaknesses

Japanese good manners Depreciation of the Yen

High credibility in payment Low profitability

High contribution to the visitor arrival Decrease in personal income

Stagnant economic growth

Japan’s business standards compared with global standards

⇒ Japanese business practices are considered to be different

Overall 90% Suppliers 50% Travel Agencies 30%

⇒ Deposits and bloc allotments to most differ, at 60% and 46% respectively

⇒ However, Japanese business practices will not be an obstacle to expand

its outbound market

Suppliers 50% Travel Agencies 70%

Revitalizing Japan’s outbound market


Supplier travel agencies or tour wholesalers that

loaded the inventory, it has contracted

into own database

Supplier several, different supplier inventory

management systems

Vendor/Provider only travel agents and wholesalers

Vendor/Provider any company having a system to

directly access multiple inventory management

systems from suppliers

Pricing/Change of Rates depends on travel agent‟s or

wholesaler‟s sales volume

(inclusive tour fares)

Pricingbased on most updated availability by suppliers

(i.e. hotels, airlines)

(individually published fares)

Changes of Rates according to supplier‟s revenue

management policies

Customer combines travel available components

from preferred travel agency or

wholesaler

Customer builds own tour package by choosing

best product and price from several,

different suppliers

D

y

n

a

m

i

c

P

a

c

k

a

g

i

n

g


Supplier travel agencies or tour wholesalers that

loaded the inventory it has contracted

into own database

Supplier several, different supplier inventory

management systems

Vendor/Provider only travel agents and wholesalers

Vendor/Provider Any company having a system to

directly access multiple inventory management

systems from suppliers

Pricing/Change of Rates Depends on travel agent‟s or

wholesaler‟s sales volume

(inclusive tour fares)

Pricingbased on most updated availability by suppliers

(i.e. hotels, airlines)

(individually published fares)

Changes of Rates according to supplier‟s revenue

management policies

Customer combines travel available components

from preferred travel agency or

wholesaler

Customer Builds own tour package by choosing

best product and price from several,

different suppliers

Differences:

distribution systems

international airfare

range of products offered to customer


Dynamic Packaging in JapanDynamic Packaging in JapanAwareness and opinions of consumers.

Awareness,

January 2007

Information source

Reasons for use

Don't know

72.7%

Know but

don't use

23.8%

Know and use

3.5%

Source: Travel Journal, Jan. 1.8, 2007


Dynamic Packaging in JapanDynamic Packaging in Japan

1.5

1.6

12.2

14.8

0% 2% 4% 6% 8% 10% 12% 14% 16%

Internet-search

Pop-ups

Newspaper

articles

Word-of-mouth


Awareness and opinions of consumers.

Awareness,

January 2007

Information source

Reasons for use


Dynamic Packaging in JapanDynamic Packaging in Japan

18.1

8.8

25.8

35.7

54.9

69.1

0% 20% 40% 60% 80%

Price

Loyalty to company

Detailed information

Online booking and payment

Selection of sights

Other than sight-seeing


Awareness and opinions of consumers.

Awareness,

January 2007

Information source

Reasons for use


2. Travel Style




Content

5. Approach to Japanese Travel Companies

Type

General Travel Company

Retail Company

In-house Agency

Wholesaler

Direct Marketing Company

(Media Sales)

Online Travel Agent

Business Travel Management

Company

Leis

ure

FIT

(Air / H

ote

l)

Pa

cka

ge

Wh

ole

sale

Pa

cka

ge

Re

tail

Dire

ct P

KG

Sale

s

Bu

sin

ess

Tra

ve

l

Gro

up/

Ince

ntive

Business Domain Business fields handled by some companies of the type

Travel Companies in Japan


Types of Travel Agencies by Registration

and Designated Services

Classifications

of Reservation

To organize

(produce)

Wholesale

Package Tour

To retail Package

Tour

To make Travel

Arrangements for

the client as an

agent

To handle

Overseas

Visitors

Inter-

nationalDomestic

Inter-

nationalDomestic

Inter-

nationalDomestic

1st category

2nd category×

3rd category×

Sub-Agents for

Travel Agencies× × ×

www.jata-net.or.jp/english/membership/index-m.htm


Number of Registered Japanese Travel Agencies

Year

Travel Agencies CategoryTravel-

Sub agenciesTotal

1st 2nd 3rd

2000 874 2,747 6,090 1,358 11,069

2001 868 2,762 6,188 1,308 11,126

2002 855 2,780 6,312 1,201 11,148

2003 841 2,782 6,314 1,129 11,066

2004 784 2,765 6,259 1,061 10,869

2005 781 2,727 6,179 1,015 10,702

2006 817 2,757 6,088 959 10,621


Package Tour Distribution Channel in Japan

Airlines

Hotels

Other Suppliers

Bus/Rail

Restaurants

Tour Guides

Attractions

Duty free & Shopping

ConsumersLand

operator

s

WholesalersJTB World Vacations

Kinki Nippon Tourist

NTA

JALPAK,

ANA Sales

Nippon Express

RetailJTB Group

KNT

NTA

H.I.S.

PTS

Call Center

Web Site

Online AgentDirect Marketing

CompanyClub Tourism

Nikko Travel

World Air & Sea Service

Hankyu Trapics

JTB Tabi-monogatari

Airline seat

distributors

International

Offices of

Major Travel

Companies

Thank you for your kind

attention!

Masato Takamatsu

Director and Vice President, Marketing (JTM)JATA World Tourism Congress

Tokyo, September 13th , 2007

Japan Outbound Travel

Documents