TokyoTomo Travel Guide

JTB World Vacations, Inc. (JTBWV) is going to broadly revamp the product lineup of LOOK JTB in the fiscal year 2010 for the first time in 16 years in a bid to offer enhanced quality of overseas package tours. Fumiyuki Kitajima, CEO of JTBWV, made a remark at the product presentation on January 13 as follows: “We are hard put in business now as our performance for the fiscal 2009 is about to see a negative growth for three years running for the first time since the liberalization of overseas travel in 1964. However, we know an opportunity often presents itself after a pinch, so this should be a good chance to overhaul our product lineup.” He then unveiled the company policy that JTBWV should break away from the “negative spiral” pertaining to overseas travel business, such as price war, tarnished product quality, irrational demand on suppliers, and excessive strain on tour escorts and guides.

In pursuit of the new product lines, the company makes it a point to serve to the consumers’ interest, setting the motto “Travel to be endorsed with satisfaction” as its tag line. It set criteria for product standardization, and those products that meet them were included in LOOK JTB and those that do not were classified as off-brand products. The off-brand products are to be marketed as strategic, pinpointed, and price-conscious tours for the purpose of stimulating demand for off-peak periods or for late-coming bookings, exploring specific markets, and meeting suppliers’ promotional needs. The merchandizing staff had studied 180,000 responses from the customers, 8,000 reports from the tour escorts, and 1,500 comments from the retailers to find out what improvements should be made in an effort to “remove every single piece of complaints of customers to fulfill their requirements.”

The points to have been improved include: (1) to confirm at the time of booking the carrier’s name and flight numbers for departure from and arrival at Japan, allowing no tours to be released without specifying airlines, (2) to seat every accompanying traveler next to each other with no extra charge on departing and returning flights, (3) to use only A and B grade hotels in the JTBWV’s rating, and assign rooms with bathtub in principle, (4) to eliminate shopping stopovers, unless reasonably necessary from the viewpoint of participants, except those combined with a restroom break during the course of sightseeing or long-distance transfer. Moreover, the agency redressed arrival transfer from the airport that makes too many stops at guests’ hotels on the way, and poor quality of meals.

All these improvements will not be in place on some tours by the end of the fiscal year 2010, but Kitajima assured that they will be dealt with and be complete in 2011.

As a way of verifying JTBWV’s commitment to abide by the tour conditions expressed in the itinerary, it has raised compensation money to be paid in the event of any discrepancies in the travel arrangements. In case there occurs an alteration in the means of transportation or its operators after departure from Japan, for instance, the company now reimburses 10 percent of the tour price instead of 2 percent as it used to. Kitajima comments on this, “Such payment costs us a lot, but we decided to take a risk for fulfilling our engagement.”

It was back in May 2008 that JTBWV set out to review the tour contents for all-out reform, and its task force had thorough discussion for 20 months ever since while working laboriously with suppliers and tour operators. Take a single instance of guaranteeing to put peer passengers abreast in the cabin, for example. JTBWV had reportedly to talk to and get assurance from individual airlines serving Japan on relevant routes incorporated into the itineraries.

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.

Hiromi Tagawa, president and CEO of JTB, and Akira Hirabayashi, president of H.I.S., had an open dialogue on January 7 at Travel Trade Forum (Travel Konwakai) to discuss such topics as store management, online sales, pricing, and travel value. Both of them articulated the need to reinvent business models and unveiled their strategies explaining some specific cases.

Tagawa described the current position of JTB Group as follows: “After we split our company in 2006, we made a good start, but are now gong through a difficult phase. The old business schemes are found to be doing no good any more. We are in need of making a reform, but our task is to restructure our organization and to pursue growth scenario at the same time. Those two objectives are normally conflicting and do not go hand in hand with each other, but we cannot keep pace with the changes of the times if we tackle one first and then the other.” The area of JTB’s challenges, so far as the structural reform is concerned, is in “realignment of store network,” he said, and growth scenario is in “online business, global operation, and community exchange” as well as development of human resources. By keeping up this line of strategy, he proclaims, JTB Group aspires to become “a human and cultural exchange industry,” but its ultimate goal is to become “a lifestyle industry” closely associated with the entire course of people’s life.

Hirabayashi said in the meantime, “I have undergone innumerable major changes in a short time of less than a couple of years since I assumed presidency, such as the economic crisis, oil surcharge hike, curtailment of agency commission, epidemic of the new type of flu, and the appreciated yen. Under the circumstances, H.I.S. makes it a point to deal with the changes vigorously. We must change ourselves prior to external changes in order to deal with them. That is what we are trying day to day.” While making preparation for business opportunities that would arise after capacity increase at the Tokyo metropolitan airports, he is supposed to put his energy into overseas deployment for a year or two to come. The number of business locations abroad numbered 100 last year, and they are expected to be not only the receptive outposts for Japanese travelers but to be the points where outbound travel to Japan is generated locally.

When it comes to the store realignment and online sales, while the store operation costs will become a burden to agency management, online sales are likely to grow further. Hirabayashi pointed out, “Web business will grow so much over a few years that it is likely to comprise more than a half of the total sales industry-wide.” He did not forget to mention that real store function is indispensable when they set to stimulate the travel demand in the market or to increase new passport holders. This is a kind of dilemma that the travel industry faces today.

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Total travel revenue of 14 companies① of JTB Group in November 2009 fell 18.5 percent from the previous year to 91.9 billion yen, of which overseas travel was 27 billion yen, down 25.1 percent. Overseas group travel plummeted 39.8 percent with ordinary groups and educational groups having gone down 39 percent and 37.4 percent respectively in contrast with a 32 percent surge of religious groups. Package tour sales sank 14.9 percent with LOOK tumbling 20.3 percent despite a 5.5 percent gain of media-supported retailing. However, the number of customers handled on LOOK increased 7 percent with a notable growth of 35.9 percent of those bound for Korea, 25.8 percent for Europe, 25.4 percent for the United States, and 15.6 percent for Hawaii. FIT sales dropped 20.3 percent. Total number of outbound customers declined 2.5 percent year on year and, as the result, JTB’s share of Japanese overseas travelers for the month became 22.3 percent, down 0.7 percentage point.

Domestic travel revenue fell 15.3 percent to 62.6 billion yen. Group travel lost 13.8 percent year on year and so did package tour by 18.5 percent with Ace having gone down 22.6 percent in revenue and down 20.6 percent in customer number. Inbound travel sales declined 19.7 percent to 2.2 billion yen.

Aggregate revenue of 25 companies② of JTB Group declined 18.6 percent to 115.5 billion yen, of which overseas travel was 35.6 billion yen, down 24.1 percent, domestic travel was 77.3 billion yen, down 15.8 percent, and inbound travel was 2.6 billion yen, down 17.2 percent.

①
Fourteen companies of the Group are: JTB Hokkaido, JTB TOHOKU, JTB KANTO, JTB Tokyo Metropolitan, JTB Business World Tokyo, JTB Central Japan, JTB TOKAI, JTB Western Japan, JTB OSAKA, JTB Chugoku Shikoku, JTB KYUSHU, iJTB, JTB Global Marketing & Travel, and JTB Corp.

②
Twenty-five companies of the Group are: in addition to the above 13 companies other than JTB Corp., JTB TRAVELAND, JTB Business Travel Solutions, JTB TRAVEL KYUSHU, JTB OKINAWA, JTB Asia Tourist, PTS, JTB GLOBAL CLUB, JTB Grand Tours & Services, JTB ISETAN TRAVEL SERVICE, JAPANiCAN, JTB Media Retailing, and ASAHI SUN TOURS

Source: Travel Vision

Travel Vision Inc. provides information on the travel industry in Japan via "Daily Travel Vision", a Japanese-language e-mail newsletter, and the "Travel Vision" website. There are nearly 110,000 people working in the Japanese travel industry, and Travel Vision is proud to be bringing travel news to more than 30,000 people through Daily Travel Vision.