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3 Sep, 2001

JTB Forecasts 20 Million Japanese Outbound by 2005

A major travel forceast report by the giant Japanese tour operator Japan Travel Bureau (JTB) predicts that the country could generate 20 million overseas travellers by 2005 but major shifts taking place in the market demographics need to be closely monitored.

“As long as the economy, exchange rate, and international situation do not change drastically, we expect around 20 million overseas travelers by 2005, and 22 million by 2010 seems attainable,” said the JTB Report 2001, distributed globally last month.

Data for January to May 2001 indicates an growth of 4.6% over 2000, and if this continues, the number of Japanese traveling overseas in 2001 is expected to reach an all-time high around 18.4 million, about 3.3% over 2000.

However, it referred to the following major shifts taking place in the market structure.

From the 1980s to the mid-1990s, the number of Japanese overseas travelers increased sharply. During that period, though the percentage of women travellers rose, the market composition percentages by age group for each gender remained basically unchanged.

Thus far, the entire Japanese market has maintained the same composition percentages while it cycled through increases and decreases. With the strong desire for participation in overseas travel, the market has been undergoing a natural expansion brought about by the increasing supply and decreasing prices.

“However, in the late 1990s, some radical shifts took place,” says the report. These were: 1) A sudden increase in middle-aged and elderly travellers over 50; 2) An increase in women in their 30s; and 3) A slump in the number of travellers in their 20s, particularly among women.

JTB analysis finds the greatest factor bringing about this structural change in the market place lies in “stock consumption.” The report explained as follows:

In contrast with “flow consumption” where consumption takes place as time and money became available, a sharp increase is taking place in the percentage of “stock consumption,” where people who already have adequate economic resources and time consume because of some other motivation.

“Flow consumption” is greatly affected by economic trends, whereas “stock consumption” is characterised by being comparatively impervious to the effects of economic ups and downs.

Says the report, “The groups capable of ‘stock consumption’ had previously been limited, but as this group has expanded over the last few years, it has begun to affect overseas travel in various ways. This is also the factor that causes the number of overseas travellers to be a leading indicator of economic trends.

“And the group supporting this stock consumption is indeed those aged 50 and over, the middle-aged and elderly, who have continued to rapidly increase their travel in recent years. The share of financial assets owned by this group is said to exceed 70% of the assets of all age groups put together. This age group is beginning to move away from child-rearing and careers, and has plenty of disposable income, in addition to the obvious abundance of time.

“Also, women in their 30s, who show a similarly large growth trend, are actually in many ways reaping the benefits of their parents’ generation, who are 50 and older.

“For example, the percentage of working single women who live with their parents is 64% in Tokyo, and 50% in Osaka, enabling them to lead a consumer lifestyle beyond their income level. Married women also often live near their parents, and reap many benefits from their parents, from food to children’s clothing, which also allows many of them to lead a consumer lifestyle beyond their income level.

“The benefits of such stock consumption even reach to the grandchildren’s generation. The travel styles drawing attention in recent years, such as mother-daughter travel and three-generation travel, have become more prominent due to increased ‘stock consumption’, “ the report said.

It noted that women in their 20s, the largest market for international travel, are continuing to do poorly.

These women, who grew up in a generation when overseas travel is no longer anything out of the ordinary, have at the foundation of their lifestyle the attitude of “wanting to enjoy life without stress.” They often are completely disinterested in anything outside their immediate concerns.

“In overseas travel, this means a decrease in the group that would go on a trip because it is trendy, or whose travel would be affected by the mood of those around them. This resulted in a three-point drop in only three years (between 1996 and 1999) of departure ratios of Japanese women in their 20s.

“Though there was a slight increase in 2000, another major characteristic is the rapid polarisation over this short time span into a group that travels overseas, and a group that does not.”

The report says these structural shifts are expected to persist for some time.

“The market share of women in their 20s in 2000 was 14.9%, and is still the largest single market segment for overseas travel, but the lead is decreasing year by year. By 2005, the market share for women over 50 will exceed 15%, overtaking women in their 20s to become the largest single market, and women in their 30s will also hold a larger share of the market.

It says that a time is coming when the travel purposes of the middle-aged and elderly age groups will dominate the Japanese overseas travel market. Until now, travel products have centered on catering to young female traveller age group but in future, this will have to change.

The middle-aged to elderly age group supports ‘stock consumption’, and their travel is characterised by a much stronger desire for educational activities than the younger age groups. Activities undertaken by middle-aged and elderly women at their destinations show a much higher percentage of “sightseeing to see natural beauty,” “historical and cultural tourism,” and “visiting art and other museums” than seen among single women.

“Travel destination goals such as rest and relaxation, sampling gourmet meals, and shopping decrease as the age of the traveler increases. Older women are increasingly going on international trips with a clear purpose, such as delving deeper into their hobbies or interests, or seeking to make discoveries,” the report says.

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