Market Insights

Arrival numbers from Japan were up 11 per cent prior to the earthquake in Christchurch on 22 February 2011. However, this growth has since fallen in the 2011 year and arrival numbers are now down by 28.6 per cent in the year to February 2012. This is a result of slow demand particularly amongst the senior segment travellers following Japan's earthquake and the earthquake in Christchurch on 22 February.

Economy

Key Indicators

Sources:
OECD (GDP Growth)
yahoo.co.jp (Exchange rates)

Japan's economy has had a turbulent past few years. It was hit particularly hard by the global financial crisis in 2008 and 2009, but a strong rebound in 2010 saw GDP grow by 3.9 per cent, before that momentum was abruptly derailed last year by the Japanese tsunami, related nuclear energy crisis, and the Thailand floods, all of which saw the economy contract 0.9 per cent.

However the OECD and other leading institutions are forecasting Japan to enjoy a period of positive growth from this year through to 2016, and first-quarter figures for 2012 were stronger than anticipated, with GDP growing at an annualized four per cent.

For more detailed information on the Japanese economy, visit www.economist.com or read the economic analysis on New Zealand Trade and Enterprise's Japan country brief.

Outbound Travel

Japanese outbound travel began rebounding strongly in 2010 after four years of contraction. Last year almost 17 million Japanese travelled abroad - up 2.1 per cent on 2010 - despite estimates that outbound travel fell as much as 50 per cent in the months immediately following the earthquake and tsunami that struck Japan's east coast in March 2011.

Outbound figures from Japan for March 2012 show a 21.4 per cent increase on last year. Aided by the strong Japanese yen, growth in airline capacity, and some extremely competitive pricing, growth in outbound tourism continues to be driven by demand for short-haul destinations, especially in East Asia, although sales of long-haul destinations are also steadily improving.

For more information about travel style, and definitions for each group, visit the Tourism Strategy Group's website.

Tourism New Zealand's research shows our target market in Japan is looking for a holiday destination where they can have fun, feel happy, refreshed, relaxed, safe, and comfortable. Senior Japanese travelers are looking to be in harmony with nature, while younger travelers are seeking a sense of fun and adventure. Being active in the outdoors is a common interest across all age groups. Compared to visitors from other visitor markets, Japanese visitors place less importance on engaging in personal challenges or getting an adrenaline rush.

Airline Update

Air New Zealand largely maintained the frequency of its Tokyo and Osaka services over the 2011/12 summer, including a return of direct flights between Tokyo and Christchurch. Air New Zealand plans to operate a full schedule of direct services to Auckland and Christchurch over the coming high season.

Air New Zealand has reduced capacity in May and June 2012 due to slower demand over the low season, but between April and October this year it will still be operating at over 60 per cent greater capacity than last year, regaining much of the capacity reductions caused by the Christchurch earthquake and Japanese tsunami.

All Nippon Airways (ANA) and Air New Zealand opened code-share services between Japan and New Zealand in late March that will significantly improve access from across regional Japan to points across New Zealand.  As a result, ANA are increasing their promotions of New Zealand to their large customer and retail base.

Air New Zealand operated seven charter flights to New Zealand over the 2011/12 summer high season and is close to confirming an increased charter programme for 2012/13, including for the first time direct charter flights to the South Island.

Korean Airlines' traffic from Japan to New Zealand grew over the southern summer, reflecting its extensive connections from Japan (daily flights to New Zealand via Seoul from 16 cities across Japan), and its increased capacity from Korea to New Zealand.

A number of other airlines also provide one-stop connections from Japan to New Zealand including Jetstar, Singapore Airlines, China Southern, Cathay Pacific, and Qantas.

Australia has approved Jetstar's code share with Japan Airlines, with Jetstar Japan unveiling its domestic Japan fares, aimed at "revolutionising how millions of Japanese travel". The airline's first flight is scheduled for 3 July.

Competitor Activity

Japanese arrivals to Australia have started to grow - up two per cent in January and six per cent in February -- after 13 consecutive months of decline since December 2010, including a calendar year drop of 16.5 per cent for 2011. Canada, which also saw Japanese arrivals fall in 2011 - by 10.8 per cent -- maintained its recent upward trend by posting a third consecutive monthly gain of 16 per cent in January.