Country Plans Japan;
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Japan Market Profile

Japan is one of California’s most mature markets. Led by active baby boomers and enthusiastic young women, Japanese are traveling overseas in record numbers and showing a resurgence in interest in California culture, cuisine and scenic beauty. Language and security concerns lead many travelers to choose package tours over independent travel, and California is well positioned as a primary destination by major Japanese tour operators. Data updated as of February 2020.


Market Profile

$1.369 Billion
Preliminary Visitor Spending, 2019
$1.493 Billion*
Forecasted Visitor Spending, 2023
*Reflects pre-coronavirus forecast.
13.1%
Market Share (U.S. Spend), 2018

Travel & Planning

Airlift (2019)

  • 118 weekly nonstop flights
  • 30,000 weekly nonstop seats
  • 4 entry points (Los Angeles, San Diego, San Francisco, San Jose)

Booking

  • Average planning timeframe: 3 to 4 months
  • Average booking timeframe: 2 to 3 months
  • Approximately 40% of Japanese visitors book packages or group tours
  • All of the largest 25 tour operators package California
  • Over 85% of leisure travelers use a travel agency when booking and planning
  • 41% of travelers to the United States cite a retail travel agency as their primary source, and 20% cite OTAs
  • Peak travel months: April, May, July, August, December

Visitor Characteristics

Sought-After Travel Experiences

  • Instagram-worthy experiences: Young women especially have a desire for picturesque scenic views and travel experiences.
  • Luxury: Once-in-a-lifetime trips and luxury travel experiences are becoming a niche segment among travelers over 50 and Japan’s small but growing high net worth population.
  • Outdoor: The desire to relive their youth is strong among men over 50, which includes taking part in outdoor activities such as surfing, biking, hiking and motorcycle riding.
  • Health and beauty: Women ages 20 to 50 are seeking girlfriend “city escapes” featuring culinary, shopping, health and beauty experiences.
  • Culinary experiences: All Japanese have a passion for varied and rich culinary experiences to “live like a local.”

How to reach Japanese Travelers

  • Traditional Media
  • Printed Guidebooks
  • Online Media
  • Digital Influencers

Market Conditions

Japan is the fourth largest economy in the world with 2018 GDP totaling $4.9 trillion. From 1981 to 2019, the average annual GDP growth was +1.97% and looking ahead, the economy is expected to grow +1% in 2020. In 2019, outbound travel continued to grow for the fourth straight year due to an improved economy, a proliferation of low-cost carriers serving nearby Asian destinations and the return of young travelers, especially women, to the market.


Competitive Landscape

Hawaii and Australia continue to be California’s main competitors. However, while Australia is up 10% in 2019, Hawaii is trending down for the year. Orlando competes for the family and young female segment, but new investments at California’s theme parks continue to boost the state’s competitiveness. Domestic Japanese destinations have also begun to compete with overseas destinations as improved tourism products and infrastructure in preparation for the Tokyo 2020 Olympics have inspired locals to rediscover their own country.

Opportunities
In March 2020, 24 new slots will open at Tokyo International Airport for U.S. and Japanese carriers. American Airlines and Japan Airlines will launch new flights to LAX and SFO with more announcements coming in 2020.

Challenges
Airfares to Europe have decreased over the past two years and security concerns have lessened, prompting tour operators to bring back group tours for seniors that had previously shifted to the U.S.


Sources

  • International Monetary Fund, Tradingeconomics.com, Cabinet Office, Japan, JTB Report on Overseas Travel 2019, Japan National Tourism Organization, U.S. Department of Commerce National Travel and Tourism Office
  • DIIO
  • Bureau of Economic Analysis, NTTO, Dean Runyan, Tourism Economics
  • U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research