Corporate Communication Division, JTB Corp. April 10, 2018 Travel Trends for Golden Weekk Holiday Period 2018 (April 255 - May 5) No. of domestic travelers and total no. of travelers expected to reach all-time highs due to favorable holidayy dates this year Total expenditure alsoo set to exceed 1,000 billion yen Domestic travel: Increase in people using ryokan accommodation Overseass travel: Continued recoveryy for European travel; Asia a remains popular (Survey period) April May 21 22 23 24 25 26 27 28 29 30 1 2 3 4 5 6 (S) (S) (M) (T) (W) (T)( (F) (S) (NH) (NH) (T) (W) (NH) (NH) (NH) (S) JTB Corp. has published the results of a survey of forecast travel trends nvolving at least one overnight stay for the 11 days of the 2018 Golden Week (GW) holiday period (the period from April 25 to May 5) on a departure basis. The survey was based on a questionnaire completed by 1,2000 respondents, as well as bookings with JTB Group companies, airline reservations and industry trends. The results of this, the 50th such survey since the first in 1969, are as follows. Table 1: Estimates for Number of Travelers, Average and Total Expenditure in GW 2018 Total no. of travelers Domestic Overseas Average travel Average travel Total expenditure Domestic Overseas Notes on the table: 1. Numbers of travelers are cumulative totals; average expenditures are per person. 2. Domestic travel average expenditures comprise all costs incurred during travel, including transport, accommodation, meals and souvenirs. expenditure on domestic expenditure on overseas Estimatee GW 2018 24.433 million 23.844 million 0.5855 million 36,200 JPY 264,000 JPY 1,017.4 billion JPY 863.0 billion JPY 154.4 billion JPY 3. Overseas travel average expenditures include fuel surcharges, accommodation, transport and meals at the destination.. 4. Year-on-year r changes are rounded to the nearest first decimal point. Change y-o-y +1.0% +1.0% +0.7% +1.7% +2.7% +2.8% +2.7% +3.4% Actual results GW 2017 24,188 million 23.600 million 0.5811 million 35,,600 JPY 257,,000 JPY 989.5 billion JPY 840.2 billion JPY 149.3 billion JPY Change y-o-y +0.8% +0.8% 1.2% +1.1% 0.8% +1.4% +2.0% 2.0% -1-
Socioeconomic Environment and Consumer Trends 1. Socioeconomic environment surroundins ng travel and leisure consumption The recovery in the world economy and overall increase in global demand has resulted in strong export performance and listed Japanese companies are expected to announce new record highs for net income in the year ended March 31, 2018. Reflecting this robust business performance, in the spring 20188 labor-management wage negotiations many of the major companies announced increases in base wages that exceeded the previous year s increase. Given last year s increased bonuses coupled with the favorable employment e environment, it could be said that current conditions are relatively good for the working population. In the Economy Watchers Survey (*1) issued byy the Cabinet Office in February 20188 the diffusion index (DI) went down for the third consecutive month. Thee reasons attributed to this drop weree price increases in daily necessities such as gasoline, fuel and food products, coupled with elevated prices forr fresh vegetables due to inclement weather during the winter, which put pressuree on household budgets. From April various lifestyle-related products are set to see price increases, including bottled beer and certain tobacco products, and although there are underlying concerns about the impact these will have on consumer spending, they are unlikely to have an effect on the Golden Week holiday period, as many people will have made bookings for peak season travel before the price increases were introduced. i It is anticipated that people who bought household electric items betweenn 2009 and 2011 using thee Eco Point system will now be looking to replacee these items, and there is a possibilityy that demand for electrical household goods may prove to be a rival for expenditure on travel. In the questionnaire on travel trends implemented on this occasion, in response to the question concerning c motivation to spend on travel, although there was an a increase in the number of respondents indicating that they would like to spend more (15.4%, upp 0.6 points) ), there was a similar increase in respondents indicating that they would like to spend less (27.3%, upp 0.8 points). While peoplee in the working generationn are currently experiencing favorable conditions, those in the senior generation are facing concerns about life after retirement, leading to inter-generational differencess in thinking about annuall expenditure, depending on people s lifestyle circumstances (Table 2). (*1) A diffusion index (DI) that expresses the results of a survey of people who are particularly sensitive to changes in i the economy, including taxi drivers and owners of retail outlets. Figure 1: Trends in Economy Watchers Survey Index Figure 5: Trends inn Gasoline Prices -2-
Table 2: Changes in Motivation to Spend on Travel in the Next Year (responses( based on survey month) (single responses) (figures in parentheses indicate y-o-yy change) Would like to spend more Would like to spend about the same More trips at lower unit cost Fewer trips at higher unit cost Same cost and frequency of trips Would like to spend less This Year (3/201 18) Last Year (3/2017) 15.4 (+0.6) 14.8 ( 0.2) 54.8 ( 0.8) 55.6 ( 0.2) 9.1 (+0.9) 8.2 ( 1.6) 5.8 (+0.7) 5.1 ( 2.0) 39.9 ( 2.4) 42.3 (+3.4) 27.3 (+0.8) 26.5 ( 0.6) Two Years Ago (3/2016) 15.0 ( 1.7) 55.8 (+1.6) 9.8 (+0.7) 7.1 ( 0.9) 38.9 (+1.8) 27.1 (+0.9) 2. Environment surrounding the GW holiday period and desiree for travel among consumers In terms of the way the dates for GW fall this years, there will be a three-day weekend from April 28 (Sat) to 30 (National Holiday), and a four-day weekend from m May 3 (National Holiday) to 6 (Sun). If people can c take paid leave on May 1 (Tue) and 2 (Wed), it will be possible to take nine days of continuous holiday. The results of this year s questionnaire indicate a slight year-on-year increase in the total number of peoplee travelling during GW this year. When people who are planning to travel in GW weree asked aboutt differences between GW last year and this year, in terms of income, more respondents indicated that income has increased since last year (16.5%) than those who indicated that income has decreased since last year (13.2%). With regard to the ability to take a holiday, more people responded that they would be more likely to be able to take a longer holiday (11. 1.0%) than those who indicated that they would be less likelyy to be able to take a holiday (7.7%), representing a year-on-year 0.1 point increase for those likely to be able too take a longer holiday and a 5.8 point decrease for those finding it less likely to be able to take a holiday. April 277 (Fri) will bee a Premiumm Friday, part of a government initiative to encourage people to o take time off work that was introduced in February 2017, and there was a 1.0-point increase year-on-year in the number of respondents indicating that they would use Premiumm Friday to have an extra day's holiday on April 27 (Table 3). In terms of destination, more respondents indicatedd that they would travel a shorter distance than lastt year (11.0%) than those who statedd that they would travel a longer distance than last year (8.8%), and with regard to holiday duration, the most popular response was will travel for the same duration as last year (14.3%). In addition, when asked about their current lifestyle and feelings/intentions, many people from those in their teens to their 40s responded that they would spend money on hobbies and travel that interest me, while more people in their 30s and 40s 4 indicatedd that ratherr than buying things, I want to spend money on experiences and creating memories. This would w suggest that many people have a larger income and are more likely to be able to take a holiday than last year and are therefore contemplating travel in 2018 (Figure 3). Table 3: Differences Between GW Last Year and This Year (multiple answers) -3-
Figure 3: Current Lifestyle and Feelings/Intentions (by age a group excerpt) Anticipated Trends in GW Travel 2018 1. Number of overseas travelers sett to increasee to 0.585 million (+0.7% y-o-y), with average expenditure e on overseass travel projected to be JPY257,0000 (+2.7% y-o-y). The peak date forr departure is expected to be May 3 (National Holiday), with many people also departing for long-haul destinations on April 28 (Sat) and 29 (National Holiday). In terms of the number of Japanese people departing on overseas travel in 2018, inn January a total of 1.42 million people departed (+9.9% y-o-y), and in February 1.39 million people departed (-6.9% y-o-y) ). The reason for the downturn in February is thought to be due to the Chinese New Year holiday period, which felll in February this year (last year it was in January),, resulting in large increases in inbound travelers too Japan from the Chinesee mainland and Hong Kong, which made it difficult for departing passengers to find seat availability. Until January the number of departing Japanese passengers had increased year-on-year for three consecutive months. Althoughh fuel surcharges are increasing due to higher crudee oil prices, on the currency markets the yen remains relatively strong against the U.S. dollar, whichh seems to be a reason why fuel surcharges are not adversely impacting motivation to travel (Table 4, Table 5).. As this year s GW holiday period iss split into a three-day and four-day weekend, w this makes it easy to travel to popular Asian destinations and it is forecast that more people will travel overseas than last year. Given the increasee in fuel surcharges since last year and the t fact that more people are likely to take two days paid leave and travel to long-haul destinations, it is anticipated that average per person expenditure on overseas travel will increase 2.7% year-on-year to JPY257,000. Table 4: Tokyo Foreign Exchange JPY Market/TTSS Rate, According to the Bank B of Tokyo-Mitsubishii UFJ (Unit: JPY) Base date Mar. 30, 2018 Mar. 31, 2017 Mar. 31, 2016 Mar. 30, 2015 Mar. 28, 2014 1 USD 107.24 113.19 113.68 120.26 103.06 1EUR 132.02 121.29 129.20 131.18 141.76 1 GBP 100 KRW 152.84 10.19 144.08 10.24 165.92 10.06 181.39 11.02 173.59 9.77 1 TWD 3.67 3.70 3.49 3.81 3.01-4-
Table 5: Fuel Surcharges (for JAL) One-way Flights, in JPY Apr-18 Difference from previous year (Reference) 2017 2016 2015 2014 April April April April Korea 500 + 200 300 0 500 2,500 China 2,500 + 1,000 1,500 0 2,500 7,000 Hong Kong / Taiwan 2,500 + 1,000 1,500 0 2,500 7,000 Guam, Philippines, Vietnam 3,000 + 1,000 2,000 0 3,000 7,000 Thailand, Malaysia, Singapore 4,500 + 1,500 3,000 0 4,500 13,000 Hawaii, Indonesia, India 6,000 + 2,000 4,000 0 6,000 16,000 Oceania, North America, Europe 10,500 + 3,500 7,000 0 10,500 25,000 *Tickets issued between Feb. 1 and May 31. Source: JAL press release. Looking at the booking status of JTB overseas package tours (LOOK JTB), the projected peak dates for departure are set to be May 3 (National Holiday) for short-haul Asian destinations, and April 28 (Sat) and 29 (National Holiday) for long-haul destinations like the U.S. mainland and Europe. Popular destinations include Hawaii as a family destination, short-to-medium-haul destinations such as Taiwan and Singapore in Asia, and long-haul destinations in Europe, such as Italy and France. On European routes the number of passengers carried has exceeded 2017 results so far this year, indicating the continuing recovery trend for travel to Europe. 2. Number of domestic travelers is set to increase to 23.84 million (+1.0% y-o-y). Average expenditure on domestic travel is projected to be JPY36,200 (+1.7% y-o-y), with peak departure dates of April 28 (Sat) and May 3 (National Holiday). According to questionnaire results concerning length of trip, there has been a 0.2-point year-on-year decrease in the number of respondents indicating travel of one night, two days (42.8%), and an 8.7-point increase on last year in those indicating that they will travel for two nights, three days (37.6%). There has been a 0.5-point increase in travel for three nights, four days (13.3%) and a 1.1-point decrease in travel for four nights, five days (4.6%). In the questionnaire results, almost half of all respondents (47.6%) indicated that they want to rest on the final day of the holiday period, which would suggest that for the four-day weekend at the end of the GW holiday period, many people will choose a two-night, three-day holiday pattern. In terms of purpose of travel, the most popular response was return home to spend time with family (25.3%), although this was 2.3 points down on the previous year. At the same time, people who indicated that they would like to enjoy hot springs (9.9%) and walk around the town and go shopping (2.2%), were up 0.8 points and 1.6 points, respectively. With regard to travel companions, there was a 1.0-point increase year-on-year in people indicating that they would travel with children (through junior high school (36.3%). In terms of means of transportation, there was a 1.8-point increase in respondents indicating that they would use a car (73.4%) and for the means of accommodation, there was a 5.8-point surge in people indicating that they would use a Japanese-style inn (ryokan) (30.1%). In terms of planned expenses (including overseas travel), the most popular response was up to JPY20,000 (24.7%), but there was a 3.1-point increase over the previous year for those indicating expenditure of up to JPY60,000 (8.2%). Although there can be a tendency to focus on the travel plans of the senior generation, for this year s GW holiday period it appears that more people in the younger generation, including those with small children, will be travelling, thanks to increased income and the favorable way in which the holiday dates fall (Tables 7-10, 12-13). Given the increase in number of people travelling and increased duration of -5-
travel, it is projected that average expenditure on domestic travel will increase 1.7% year-on-year to JPY36,200. Looking at the booking status of JTB domestic package tours (ACE JTB),, peak dates for departure are expected to be April 28 (Sat) and May 3 (National Holiday) ), with popular destinations including Tohoku, Kyushu, and the Chugoku-Shikoku regions. Bookings for plans that include stays in famouss Japanese ryokan are also performing better than 2017. Bookings for travell to Tokyo and the Kanto region are also a up, reflecting such attractions a as Tokyo Disney Resort, which celebrates its 35 th anniversary this year, as well w as new commercial facilities f like Tokyo Midtown Hibiya. In Nagoya, att LEGOLAND Japan, which openedd last year, thee new SEA LIFE Nagoyaa aquarium is due to open on April 15 and a the LEGOLAND Japan Official Hotel will open its doors on April 28. These new planned openings have boosted bookings for related products in the Tokai region. In an internet survey conducted by JTB Tourism Research & Consulting Co., when asked about Areas of Interest for Golden Week this Year, the most popular response was foodd festivals. Places that attract a young people and families are also popular, ncluding zoos, aquariums and theme parks. Reference: Internet Survey Areas of Interest for Golden Week This Year (Top 10) (multiple answers) Survey Methodology Survey period: Respondents: Sample size: Content: Method: Source: JTB Tourism Research & Consulting Co., Basicc Travel Survey March 2 to 14, 20188 Males and females between the ages of 15 and 79 1,200 individuals Travel plans involving at least one night away a from home departing between April 25 and May 5,, 2018. (Including overseas travel, but excluding trips for f commercial or work purposes) Individual surveys conducted at 200 locations nationwide by survey staff using a questionnaire form on personal visits. Contact for Press Inquiries: Corporate Communication Division, D JTBB Corp., Tel: 03-5796-5833-6-
Table 6: Estimates of Overseas Travelers During GW 2018 (April 25 through May 5, 2018) (Unit: thousand persons) 2018 Estimate % change 2017 actual figures % change Overall Total 585 + 0.7% 581 1.2% Asian Total 364 + 0.6% 362 2.7% Korea 88 4.3% 92 8.0% China 82 ±0.0% 82 5.7% Hong Kong 26 +4.0% 25 +4.2% Taiwan 52 +2.0% 51 +2.0% Thailand 41 +2.5% 40 +2.6% Singapore 16 +6.7% 15 6.3% Indonesia 15 ±0.0% 15 ±0.0% Malaysia 10 ±0.0% 10 9.1% Others 34 +6.3% 32 +6.7% North American Total 142 1.4% 144 +2.1% Hawaii 62 +1.6% 61 +3.4% Guam / Saipan 23 8.0% 25 3.8% Mainland USA 48 2.0% 49 +2.1% Canada 9 ±0.0% 9 +12.5% European Total 49 + 8.9% 45 ±0.0% Oceanian Total 19 ±0.0% 19 ±0.0% Australia 13 ±0.0% 13 ±0.0% New Zealand 4 ±0.0% 4 ±0.0% S. Pacific Islands 2 ±0.0% 2 ±0.0% Other (Africa, Middle East, Latin America, etc.) 11 ±0.0% 11 ±0.0% -7-
Table 7: Means of Accommodation (excl. overseas travel) Table 9: Planned Expenses for GW 2018 (per person) Table 8: Means of Transportation (multiple responses) % change % (multiple responses) change Japanese-style inn (Ryokan) 30.1 + 5.8 Car 73.4 + 1.8 Hotel 33.5 9.1 Train 19.1 3.2 Parents' home or friend's house 35.3 + 0.8 JR Shinkansen 13.9 1.0 Minshuku / pension 4.0 2.1 JR / private railway lines 9.8 3.7 Other 4.6 + 1.9 Long-distance bus 2.9 1.8 (single responses) % change Less than JPY10,000 15.9 + 0.5 Up to JPY20,000 24.7 0.3 Up to JPY30,000 17.6 1.0 Up to JPY40,000 8.8 + 0.5 Up to JPY50,000 9.3 0.3 Up to JPY60,000 8.2 + 3.1 Up to JPY100,000 8.8 1.5 Up to JPY150,000 3.8 + 0.6 Over JPY150,000 2.7 + 0.1 Airline 11.6 + 0.1 Standard airline 10.4 1.1 LCC 1.2 + 1.2 Ferry / ship 0.0 1.4 Table 10: Travel Companions (single responses) Table 11: Travel Destination (excl. overseas travel) change % (single responses) change % Family 68.7 2.5 Hokkaido 6.9 0.5 Children (through junior high school) 36.3 + 1.0 Tohoku 14.5 + 1.0 Married couple only 17.6 1.6 Kanto 22.0 + 4.4 Others (mother & daughter, three generations, etc.) 14.8 1.9 Koshinetsu 10.4 + 0.9 Friends and acquaintances 18.7 + 2.7 Tokai 6.9 5.3 With girl/boyfriend as a couple 5.5 + 1.0 Hokuriku 6.9 + 1.5 2-3 friends 13.2 + 1.7 Kinki 9.8 2.4 Group / organization 3.3 + 0.1 Chugoku/Shikoku 11.0 + 2.2 Alone 7.1 0.6 Kyushu 10.4 + 0.9 Okinawa 1.2 2.9-8-
Table 12: Purpose of Travel (Top 10) Table 14: Reasons for Not Traveling Table 13: Length of Trip (excl. overseas travel) (single responses) (single responses) % change % change 1 Return home to spend time with family 25.3 2.3 2 days 1 night 42.8 0.2 2 Relax and take it easy 12.6 + 0.5 3 days 2 nights 37.6 + 8.7 3 Enjoy nature and scenery 11.0 0.5 4 days 3 nights 13.3 + 0.5 4 Enjoy time with family 10.4 + 0.8 5 days 4 nights 4.6 1.1 5 Enjoy hot springs 9.9 + 0.9 6 days 5 nights 1.2 1.4 6 Enjoy good food and local specialty cuisine 7.1 1.8 7 days 6 nights 0.0 ± 0.0 7 Visit a theme park or a leisure facility 5.5 + 0.4 8 days 7 nights 0.6 0.1 8 Spend time with a loved one or friend 4.4 + 0.5 8 nights or more 0.0 3.8 9 Visit famous or historic landmarks 3.8 ± 0.0 10 Walk around the town and go shopping 2.2 + 1.6 (multiple responses) % change 1 Golden Week is too crowded 37.2 + 1.0 2 I want to relax at home 28.7 + 3.1 3 Travel costs are too high in Golden Week 22.7 + 4.2 4 Will go on holiday at another time 17.3 2.0 5 Can't take time off work, etc. 15.8 1.9 6 I don't feel like taking a trip 13.1 + 3.0 7 Days off don't match with other family members 12.3 + 0.6 8 I have to work on Sundays and holidays 11.4 1.8 9 There is something I would rather do than take a trip 10.1 + 1.3 10 Domestic situation prevents leaving home 9.6 + 1.1 11 Keeping expenditure down due to poor economy 8.5 0.3 12 There is no place I particularly want to travel to 8.3 + 1.2 13 Domestic tourist spots are crowded due to the increase in foreign tourists 2.6 + 0.8 14 Difficulty in reserving domestic accommodation due to increase in foreign tourists 2.1 + 0.2 Table 15: Changes in Motivation to Spend on Travel in the Next Year (responses based on survey month) (same as Table 2 above) (single responses) (figures in parentheses indicate y-o-y change) This Year (3/2018) Last Year (3/2017) Two Years Ago (3/2016) Would like to spend more 15.4 (+0.6) 14.8 ( 0.2) 15.0 ( 1.7) Would like to spend about the same 54.8 ( 0.8) 55.6 ( 0.2) 55.8 (+1.6) More trips at lower unit cost 9.1 (+0.9) 8.2 ( 1.6) 9.8 (+0.7) Fewer trips at higher unit cost 5.8 (+0.7) 5.1 ( 2.0) 7.1 ( 0.9) Same cost and frequency of trips 39.9 ( 2.4) 42.3 (+3.4) 38.9 (+1.8) Would like to spend less 27.3 (+0.8) 26.5 ( 0.6) 27.1 (+0.9) * As some respondents did not answer questions in Tables 9-13 and 15, responses do not total 100%. -9-
Table 16: Trends in Published Numbers for GW Travel from 2000 10