Source market Japan

Major Market Segments In The Japanese Outbound Travel Market: Seniors

This is the first article of a series which will discuss the two major demographic groups (aka market segments) in the Japanese travel market: seniors and millennials.

As the demographics of the world’s third largest economy change and there is no increase of the population in view for the foreseeable future, there have been a lot of questions about what market segments should overseas destinations target in Japan.

Again, let us say that the population is aging and soon over 30% of the Japanese will constitute the senior demographic group. With so many seniors, it is only natural to

First, think how to entice them to travel overseas and

Next, convince them to choose your destination.


But before we go into details about the seniors as a travel market segment, let us say that the millennials are also a large prospective demographic that many destinations have been working to entice. We will devote a separate article to them, too.

Research by one of the major travel agencies shows that 34% of Japanese seniors have no experience of overseas travel. Of that 34%, 40% have simply no interest in visiting overseas destinations. 30% do not travel due to logistic or economic reasons and 30% are indeed interested but feel uncertain and indecisive for no specific reasons.

Of the 66% who have traveled overseas at least once, 57% have not traveled during the past 3 years.

Among these 57%, 34% feel indecisive for no specific reasons although they are indeed interested in traveling abroad. 55% do not travel due to logistic and economic reasons and 11% are not interested at all.

One conclusion we can draw from the above figures is that 23% of the whole senior market do have interest in going overseas but are indecisive and therefore do not take the step from “I want” to “I am going.”

Another conclusion is that against the general perception, Japanese seniors are not rich in the conventional sense of the word. They, however, can afford traveling overseas on a regular basis and those who do travel, make the best of their time abroad.

 

How can we tap into that potential?

Japanese travel agencies have been working on this for the past several years and they have come up with some helpful conclusions.

Analyzing the market trends in general and after incidents in foreign destinations (terrorist attacks, natural disasters, political and social unrest, etc.), has shown the following.

  1. Special interest tours have shown 150% growth over the past 5 years.
  2. Business trips and theme tours remain almost unaffected by safety concerns.
  3. In 2015, 53.6% of the senior overseas travelers had traveled abroad more than 10 times and 30%. The share of heavy repeaters with more than 20 overseas trips was 30% of the senior market segment.
  4. The general perception of the Japanese overseas traveler is that agency-organized tours are safer than independent travel.
  5. Last but not least, it is important to say that only 10% of the Japanese seniors (60 – 69 and over 70) travel overseas while in the Old Continent and North America that percentage fluctuates between 20 and 30%. Though many destinations nowadays view the aging population of Japan as a shrinking market, the latter figures offer an insight which can help you make up your mind: leave Japan out of your business portfolio or turn it into a gold mine.

Offering motivation to travel and creating an environment which facilitates senior travel are the keys to turning this segment into a treasure trove waiting for you.

 

Strategies of Japanese travel agencies targeting the senior market

Travel agencies design tours which make seniors feel confident and at ease. Such tours may include any of the following or combination of some of them: cycling, hiking, art performances, running, water sports, culinary experiences, etc.

In a little more detail agencies

  1. Design SIT tours for senior customers;
  2. Offer theme-based tours for customers over 70 years of age;
  3. Create enhanced content tours (e.g. include only visits to little known destinations which are not easy to access for individual travelers);
  4. Give opportunities for first-hand experience/personal performance at world-renowned stages (e.g. singing and listening to Mozart in the Salzburg Cathedral; singing on stage in the Opera House of Wien, etc.)
  5. Offer diversificed themes and tours to ensure that the customers will come back for more exciting and/or pleasant experiences with people of their own age.

Data source: JTB Report 2016; KNT Data

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