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The WIT (Web In Travel) Japan & North Asia conference, held over 29-30 June 2018, served to illustrate how travel has become one of the most rapidly-moving industries in Japan and the other countries, with the rise of online travel and developing technology.
Whilst the travel market in the Asia Pacific region is still largely offline, online travel is showing substantial growth. Booking accommodation, air and rail tickets via online channels is becoming increasingly popular and placing a reservation via mobile phone is now a common option. This trend can be expected to escalate further over the coming years, with OTA sales and direct online sales from the supplier burgeoning.
As online travel expands, to serve a better user experience is becoming more crucial, and the way data is collected and analysed is becoming increasingly important. In order to advance this, major players are investing in new technologies and devices such as AI, blockchain, smart speakers. These will allow the companies to improve their service (e.g. AI chat for FAQ’s), and deal with larger amount of data.
For Japan, the remarkable growth of inbound tourism has been one of the key growth factors in the travel industry. The number of inbound tourists and travel consumption by inbound tourists is larger than ever, with most tourists arriving from the APAC region. In their official Mid-Term Tourism Strategy, the Japan Tourism Agency has set a target to increase the number of inbound tourists to 40 million in 2020 and 60 million in 2030.
Compared with the growth of inbound tourism, outbound tourism in Japan is stagnating. In a survey by Travelport, only 29.4% of Japanese interviewees answered that they are planning to have a trip overseas in the next couple of months, contrary to domestic trips, where the figure was 73%. The survey pointed out that one key reason behind this is financial, where 68% of interviewees answered that price is a major consideration when it comes to travelling.
The rise of online travel is reshaping the competitive environment for Japanese travel agencies. Travelers can now choose how to book their trip from multiple options. Beyond speaking in person at the desk in a travel agency office, there is now easy access to global online travel providers, the websites of airlines and hotels, meta-search websites, and even search engines such as Google to prepare one’s trip.
Whilst Japan has a relatively low online penetration rate in the APAC region, it is becoming increasingly important for Japanese travel agencies to improve their online sales channel – this will become paramount if they are to successfully compete with the rapidly-growing array of online competitors, which are potentially more suited to a shifting competitive landscape.