TokyoTomo Travel Guide

JTB Corp. has taken a step toward realignment of its retail stores across the nation. Its public relation office denied the number to scrap is as many as 200 as was reported by some newspaper, criticizing that it was a mere guess. However, it admitted that scrutiny is going on to reassess store function and network more broadly than usual. It remains to be seen how many stores are going to be closed, when the store network restructuring is completed, or whether the jobs are cut, but the spokesman suggested that the revamp could take place on a large scale. Incidentally, the number of existing stores, including registered offices for corporate sales and merchandizing operation, totals 940.

Store realignment is an agenda taken up in the medium-term business plan having started from fiscal 2009 in a bid to save operating costs. The aggravate revenue of 14 companies in JTB Group for the first half of this fiscal year plunged 17.7 percent to 557 billion yen under the influence of the new influenza. With profit margins ever dwindling, JTB seeks to improve profitability by cutting costs through store realignment and focusing more on online business.

Online sales are estimated to comprise 7 percent of total sales in this fiscal year and are expected to grow to 12 percent in FY2011, and the kinds of travel products salable online are to be increased to 300,000, twice the current number. Hiromi Tagawa, president and CEO, told a Travel Vision reporter last year that the information technology investment should go to contents rather than to equipments and facilities. So far as his policy remains unchanged ever since, he should have it in mind that the company develops merchandise that is unique to JTB like the ones associated with tourism-oriented community exchange. It also expects to have bookings through the third party’s website as well as bookings from its own website and Tornos site started last January.

As far as other major travel agencies are concerned, Kinki Nippon Tourist has closed 27 stores since January 2008 when it established KNT Tourist but opened in the meantime 23 new stores. Nippon Travel Agency has not undergone a major restructuring either but continues to scrap and build stores as usual depending on their performance. These two agencies are equally positive in boosting online sales but appear to have not set out yet to reorganize their store network.

Source: Travel Vision

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