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    Mizuho 1038 travel_tourism Mizuho 1038 travel_tourism Document Transcript

    • Japan Industry Outlook / 38 2012 No.1 Table of Contents1, Comprehensive Industry - Japan 15, Broadcasting (Japanese only)2, Iron and Steel - Japan 16, Marine Shipping (Japanese only)3, Non-ferrous Metals - Japan 17, Logistics - Japan4, Paper and Pulp (Japanese only) 18, Electric Power - Japan5, Cement - Japan 19, City Gas (Japanese only)6, Chemicals - Japan 20, Retail - Japan7, Pharmaceuticals - Japan 21, Food and Beverage - Japan8, Petroleum - Japan 22, Food Service Industry - Japan9, Automobiles - Japan 23, Construction (Japanese only)10, Shipbuilding (Japanese only) 24, Real Estate and Housing - Japan11, General Machinery (Japanese only) 25, Travel and Tourism - Japan12, Electronics - Japan 26, Nonbank (Credit Cards & Credit) (Japanese13, IT Services - Japan only)14, Telecommunications - Japan 27, HR Service Industry (Japanese only) Contact: Industry Research Division Mizuho Corporate Bank, Ltd. mizuho.ird@mizuho-cb.co.jp
    • FY2012 Japan Industry Outlook (Travel and Tourism) Travel and Tourism Summary ■ The number of outbound domestic travelers is forecast to bounce back to over 17 million in 2012, thanks to the mitigated impact of voluntary restraint on leisure consumption that followed the Great East Japan Earthquake, along with the strong yen and the increase in the number of flights to neighboring countries. Meanwhile, regarding international visitors to Japan, although business demand has already shown a sign of recovery, it is likely that the full recovery of tourism demand will take more time. ■ The recovery of the hotel occupancy rate is likely to be limited in 2012 with new hotel rooms constantly supplied mainly in urban areas while accommodation demand increases thanks to the recovery of travel demand. Gross travel sales is forecast to increase only slightly in 2012, as the downward pressure from weak domestic travel consumption outweighs the positive factor of the recovery of overseas travel demand domestically. ■ With regard to corporate earnings for FY2012, hotel companies are forecast to post increased profits on increased sales thanks to the mitigated impact of the earthquake. However, since it is likely that the recovery of room rates will take time and that the harsh environment for banquet demand will continue, the extent of earnings recovery should be limited. While travel agencies are also expected to record increased profits on increased sales thanks to the recovery of leisure demand, they are forecast to suffer from a harsh earnings environment.I. INDUSTRY TRENDS1. Travel demands from both outbound domestic travelers and international visitorscontinue to recover from a sharp drop right after the earthquake. The number of The number of outbound domestic travelers increased to 16.99 million in 2011, outbound up 2.1% year-on-year. In the first half of the year, year-on-year negative growth Japanese continued from March to June partly because of a mood of voluntary restraint on travelers increased for the leisure consumption caused by the Great East Japan Earthquake, but the market second saw the recovery of demand in July, and then the number of outbound domestic consecutive year travelers jumped by 8.8% year-on-year in August partly because of prolonged in 2011. summer vacation resulting from the power shortage issue. In the second half of 2011, strong yen contributed to the recovery of overseas travel demand and outbound domestic travelers continued to grow year-on-year from September. As a result, the number of outbound domestic travelers increased in 2011 for the second consecutive year, but did not reach the pre-recession level of 17 million 1 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism) (see Figure 25-1 and Figure 25-2). The number of outbound domestic travelers is forecast to increase to 17.46In 2012, the million in 2012, up 2.8% year-on-year. Although fuel surcharges, staying at anumber of high level, reduce overseas travel demand, a recovery in the number of outboundoutbound travelers is expected thanks to the mitigated mood of voluntary restraint onJapanesetravelers will leisure consumption seen in the first half of 2011. Additionally, the continuingrecover and trend of the strong yen and the increasing flights of low-cost carriers (LCCs) toreach 17 million neighboring countries are expected to drive travel demand. Given that, thefor the first time number of outbound domestic travelers is forecast to exceed 17 million in 2012in 5 years. for the first time in five years since 2007. Figure 25-1: Change in the numbers of outbound Japanese travelers and international visitors to Japan (Million persons) (%)3,000 30 Source: Figure 25-1 to Figure 25-3 Great East Japan2,500 Global recession 20 were compiled by MHCB Industry Terrorist attacks Earthquake SARS Research Division based on Japan National Tourism Organization’s2,000 10 (JNTO) “Visitor Arrivals and Japanese Oversea Travelers.”1,500 0 Note: In Figure 25-1, the figures given for 2012 are based on MHCB1,000 -10 Industry Research Division forecasts. 500 -20 0 -30 00 01 02 03 04 05 06 07 08 09 10 11 12(E) (CY) No. of outbound Japanese travelers No. of international visitors to Japan YoY YoY Figure 25-2: Trends in the number of outbound Figure 25-3: Trends in the number of Japanese travelers international visitors to Japan (T housand (T housand persons) persons)1,900 9001,800 8001,700 7001,6001,500 6001,400 5001,300 2008 20081,200 400 2009 2009 20101,100 2010 2011 300 20111,000 900 200 Jan. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism) The number of The number of international visitors to Japan fell significantly to 6.22 million international (down 27.8% year-on-year) in 2011 affected by the Great East Japan Earthquake visitors to Japan and the Fukushima Nuclear Power Plant accident (see Figure 25-1 and Figure fell significantly in 2011 due to 25-3). The year-on-year decrease rate was larger than the 18.7% recorded in the earthquake 2009, when the global recession and the new influenza virus among other factors among other caused a sharp drop, highlighting the huge impact a sudden event can have on factors but is travel demand. However, the number of international visitors to Japan is currently on a recovery path. gradually recovering on a monthly basis after recording a sharp year-on-year 62.5% drop in April 2011. The year-on-year decrease rate fell to around 10%—11.7% as of December 2011. By demand category, while demand for business travel from not only Asian countries such as Taiwan and China but also Europe and the U.S. shows a sign of recovery, tourism demand largely lags behind business demand in recovery (see Figure 25-4). Regarding the demand trends by region, demand for visiting Japan from China and Hong Kong turned positive in October 2011 on a year-on-year basis, raising the prospect of the full recovery of demand for visiting Japan from other regions going forward. The number of With regard to 2012, both business and tourism demands for visiting Japan are international expected to stay on a recovery path. However, business demand from Europe visitors to Japan and the U.S., where uncertainty about the economic prospect remains, is forecast seems to be staying on a to lag behind business demand from Asian countries. Meanwhile, regarding recovery path to demand for visiting Japan from Asian countries, the recovery of demand from over 7 million in China and other countries is already showing a sign of recovery, and the 2012. situation is also expected for South Korea and other areas. The number of international visitors to Japan is forecast to increase to 7.43 million in 2012, up 19.5% year-on-year, thanks to the recovery of demand, even though it will not reach the pre-earthquake level of 8 million. Figure 25-4: Trends in the number of international visitors to Japan by region Business demand Tourism demand 40% 40% 20% 20% 0% 0%-20% -20%-40%-60% -40%-80% -60%-100% -80% 11/1 11/2 11/3 11/4 11/5 11/6 11/7 11/8 11/9 11/10 11/1 11/2 11/3 11/4 11/5 11/6 11/7 11/8 11/9 11/10 South Korea Taiwan China HongKong South Korea Taiwan China HongKong Thailand UK US Australia Thailand UK US Australia Source: Compiled by MHCB Industry Research Division based on Japan National Tourism Organization’s (JNTO) “Visitor Arrivals and Japanese Oversea Travelers.” 3 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism)2. The hotel occupancy rate recovered in the second half of 2011 from a sharp drop rightafter the earthquake. The national The hotel occupancy rate (national average) was 69.6% in 2011 (down 3.5% points hotel occupancy year-on-year), falling below the 2009 level of 69.9%, when the Lehman Shock had rate is expected a significant impact on the figure (see Figure 25-5 and Figure 25-6). The hotel to be below 70% occupancy rate fell to as low as 55.6% right after the Great East Japan Earthquake, in 2011. affected by the sharp drop in the number of international visitors to Japan and the domestic mood of voluntary restraint on leisure consumption. In the second half of 2011, however, domestic leisure demand expanded thanks to a prolonged summer vacation resulting from the power shortage issue and as demand—especially business demand—for visiting Japan from abroad recovered. In addition to this, room rates have been lowered at some hotels, and now the hotel occupancy rate has recovered to the level of a year earlier. In terms of the hotel occupancy rate by region, the East Japan region among others saw a large drop in accommodation demand right after the Great East Japan Earthquake. However, currently, accommodation demand in the Sendai area remains at an over the 80% level thanks to demand accompanied by restoration and reconstruction efforts. The Tokyo area also sees recovery to the level of a year earlier. Note that, after many operators have lowered room rates for the purpose of stimulating demand, it is likely that the recovery of room rates will take some time. Accommodation With regard to 2012, some expect leisure consumption will expand thanks to the demand will mitigated impact from reduced demand right after the earthquake in the first half recover in 2012, of 2011 and the retirement of baby boomers. However, it is thought unlikely that but the extent of sluggish corporate demand (as a result of ongoing corporate cost-saving efforts) occupancy rate recovery will be and individual restraints on consumption will significantly improve. Additionally, limited. while the recovery of demand for visiting Japan from abroad will contribute to a rise in the hotel occupancy rate, the competition environment is expected to get harsher, especially in urban areas with new accommodation-oriented hotel rooms and others constantly supplied. Therefore, the hotel occupancy rate (national average) is forecast to remain in the low 70s percentage-wise in 2012, with the extent of recovery limited. Figure 25-5: Trends in the hotel occupancy rate nationwide and in three major cities (Tokyo, Nagoya, and Osaka) (annually) 90 (%) 85 Source: Compiled by MHCB Industry 80 Research Division based on “Weekly 75 Hotel Restaurant” published by Ohta Publications 70 Nationwide Tokyo 65 Nagoya Osaka 60 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12(E) (cy) 4 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism) Figure 25-6: Trends in the hotel occupancy rate nationwide and in major cities (monthly) % Nationwide (Nationwide) (東京) Tokyo 100 % Osaka (大阪) 100 % 90 100 90 90 80 80 80 70 70 2008 70 2009 60 60 2010 60 50 2011 50 50 40 40 40 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 month 1 2 3 4 5 6 7 8 9 10 11 12 Month 月 Month 月 Month Nagoya Sapporo (名古屋) % (札幌) (仙台) Sendai % 100 %100 100 90 90 90 80 80 80 70 70 70 60 60 60 50 40 50 50 30 40 40 20 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 月 月 Month 月 Month Month Urayasu Yokohama % (浦安) (横浜) Kyoto (京都) % %100 100 100 90 80 90 90 70 80 80 60 50 70 70 40 30 60 60 20 50 50 10 0 40 40 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 月 月 月 Month Month Month Kobe Fukuoka (福岡) Okinawa % (神戸) % % (沖縄)100 100 110 90 90 100 80 80 90 70 70 80 60 60 70 60 50 50 50 40 40 40 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 月 1 2 3 4 5 6 7 8 9 10 11 12 Month 月 Month 月 Month Source: Compiled by MHCB Industry Research Division based on “Weekly Hotel Restaurant” published by Ohta Publications 5 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism)3. The current gross travel sales show a sign of recovery in overseas travel. Gross travel Looking at the current trend in FY2011 gross travel sales, the 12-month rolling sales were average of the growth rate of gross overseas travel sales is expected to turn affected by the negative, affected by the sharp drop in overseas travel demand seen right after reduced demand in FY2011 but the Great East Japan Earthquake. However, the year-on-year monthly growth rate currently show a is currently staying positive thanks to the strong yen and recovery of demand. sign of recovery Domestic travel is also currently on a recovery path from a sharp drop in demand of overseas right after the earthquake. However, with the trend of “last-minute bookings” travel partly because of the facilitated by the expanded use of Internet booking putting downward pressure strong yen. on the travel unit price, the growth rate of gross domestic travel sales remains negative. Regarding gross package travel sales, the monthly growth rate of overseas travel sales remains positive thanks to: a recovery of demand; a steady growth of travel to not only Asian countries (such as Taiwan and South Korea), but also to Europe helped by strong yen; the increasing travel unit price; and the reduced decline of the number of travelers. Meanwhile, the monthly growth rate of domestic package travel sales remains negative due to the slightly declining travel unit price and the falling number of travelers (see Figure 25-7 and Figure 25-8). Gross travel With regard to FY2012, travel sales are expected to continue recovering, with sales are demand for traveling to neighboring countries increasing thanks to a persistently expected to strong yen and improved convenience through the increase in the number of increase thanks to a recovery of flights to Asia. For domestic travel, the mitigated impact of the earthquake and demand. the launches of services by domestic low-cost carriers (LCCs) are expected to cause increased demand. However, since it is unlikely that corporate cost-saving efforts and individual restraints on consumption will significantly improve, the extent of the recovery of gross domestic travel sales should be limited. Figure 25-7: Trends in gross travel sales (year-on-year change of the 12-month rolling average) (JPY billions) 400 20% 350 15% 300 10% 5% 250 0% 200 -5% 150 -10% 100 -15% 50 -20% 0 -25% 07/8 08/1 08/6 08/11 09/4 09/9 10/2 10/7 10/12 11/5 11/10 Overseas (sales) Japan (sales) Overseas (growth) Japan (growth) 6 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism) Figure 25-8: Trends in gross package travel sales (year-on-year change of the 12-month rolling average) (Overseas) (Domestic)18% 10% No. of persons Sales13% Unit price No. of persons Sales Unit price 5% 8% 3% 0%-2%-7% -5%-12% -10%-17%-22% -15% 07/8 08/1 08/6 08/11 09/4 09/9 10/2 10/7 10/12 11/5 11/10 07/8 08/1 08/6 08/11 09/4 09/9 10/2 10/7 10/12 11/5 Source: Figure 25-7 and Figure 25- 8 were compiled by MHCB Industry Research Division based on Japan Tourism Agency’s “State of Travel Sales by Major Travel Agencies. 主要旅行業者の旅行取扱状況” II. CORPORATE EARNINGS 1. Corporate Earnings of Hotel Companies Reduced profits Regarding the corporate earnings for FY2011 of four listed hotel companies, on reduced sales sales are expected to decline by 3.8% year-on-year due to reduced are expected for accommodation demand for both domestic and overseas travels and due to FY2011. sluggish corporate banquet demand caused by the Great East Japan Earthquake in the first half. Operating profits are expected to fall sharply by 57.6% year-on-year partly because the room rates were lowered to stimulate accommodation demand and because banquet units (with a higher fixed cost ratio than accommodation units) suffer more heavily from reduced sales. Both sales and Sales and profits are forecast to increase in FY2012 thanks to a recovery of profits will both business and tourism demand, with the impact of the earthquake mitigated. increase in However, since the competition environment is getting harsher with new FY2012 but will accommodation-oriented hotels constantly supplied especially in urban areas, it not reach the pre-earthquake is forecast that the rise in room rates will be put under pressure. Additionally, level. the recovery of the banquet unit is likely to be limited due to sluggish demand from companies resulting from their ongoing cost-saving efforts. Given that, sales and profits are forecast to increase in FY2012, but are not likely to reach the 2010 level (see Figure 25-9). 7 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism) Figure 25-9: Earnings forecast for four listed hotel companies Actual FY10 FY11 FY12 (Unit) (Actual) (Estimate) (Forecast) Four listed Sales companies (JPY billions) 173.6 167.1 169.6 Four listed Operating profits companies (JPY billions) 5.01 2.12 3.45 Rate of Increase and Decrease FY10 FY11 FY12 (Unit) (Actual) (Estimate) (Forecast) Sales (%) 2.1% -3.8% 1.5% Operating profits (%) 51.7% -57.6% 62.4% Source: Compiled by MHCB Industry Research Division based on corporate financial statements. Note 1: In Figure 25-8, the four listed companies are Imperial Hotel (fiscal year ending in March), Royal Hotel (fiscal year ending in March), Fujita Kanko (fiscal year ending in December), and Kyoto Hotel (fiscal year ending in December). Note 2: The figures given for FY2011 and FY2012 are based on MHCB Industry Research Division forecasts.2. Corporate Earnings of Travel Agencies FY2011 saw sales With regard to the corporate earnings for FY2011 of four major travel agencies, increasing and demand fell sharply right after the Great East Japan Earthquake. Meanwhile, the operating profits earnings environment surrounding the travel industry is becoming harsher due to going into the black thanks to intensified competition with the emergence of online travel agencies and the the recovery of downward trend of the domestic travel unit price. Inbound demand (demand for travel demand. visiting Japan from abroad), on which travel agencies have put focus on in recent years, also fell significantly. Although both domestic and overseas travel currently shows a sign of the recovery of demand, it cannot offset the larger impact of reduced demand in the first half of FY2011. As a result, sales and profits of travel agencies are expected to fall by 6.2% and 40.5%, respectively, year-on-year. Both sales and In FY2012, both business and tourism demands are expected to recover thanks to profits are the mitigated impact of the Great East Japan Earthquake. Persistently strong yen forecast to can also be an increase factor for overseas travel demand. However, the travel increase in FY2012 thanks unit price is likely to keep falling going forward, due to the expansion of online to recovery of travel agency market shares in the travel industry and the “last-minute booking” demand. trend in travel booking. A harsh environment is expected for brick-and-mortal travel agencies, but major companies are taking measures to: expand online travel businesses, meet inbound demand or demand for visiting Japan from abroad for MICE (meetings, incentives, conferences, and exhibitions), etc., and to satisfy demand from Japanese companies. Regarding the financial results for FY2012, both sales and profits are forecast to increase to the FY2010 level 8 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism) thanks to the expected recovery of demand (see Figure 25-10). Figure 25-10: Earnings forecast for four major travel agencies Actual FY10 FY11 FY12 (Unit) (Actual) (Estimate) (Forecast) Four listed Sales companies (JPY billions) 430.6 403.8 432.0 Four listed Operating companies profits (JPY billions) 16.7 9.9 15.1 Rate of Increase and Decrease FY10 FY11 FY12 (Unit) (Actual) (Estimate) (Forecast) Sales (%) 3.7% -6.2% 7.0% Operating (%) - 40.5% 51.4% profits Source: Compiled by MHCB Industry Research Division based on corporate financial statements. Note 1: The four major companies are JTB, Nippon Travel Agency, Kinki Nippon Tourist, and H.I.S. The former two companies are not listed but publish news releases on financial results. Since the four companies use different methods for calculating sales, the sales figures are based on our estimates. Note 2: The figures given for FY2011 and FY2012 are based on MHCB Industry Research Division forecasts.III. TOPICS: Consideration of business areas that seem promising in the medium-termperspective – the hotel/travel industry The expansion of Japan’s tourism policy so far has put focus on the expansion of inbound demand, inbound demand as the “Visit Japan” campaign (which started in 2003) and the issuance of tourist will continue to visas for individual Chinese tourists (which started in 2009) show. Partly be an important theme in the because of the effects of these efforts, the number of international visitors to hotel/travel Japan had been steadily increasing. The Japanese government has set the target industry. for the number of inbound tourists to 30 million per annum. However, tourism demand in its very nature tends to be significantly affected by external environmental factors such as business fluctuations, the international situation, and natural disasters; and, in 2011, the number of international visitors to Japan fell sharply affected by the Great East Japan Earthquake and the Fukushima Nuclear Power Plant accident. Currently, the number of international visitors to Japan has yet to clear the first step of the policy target of welcoming 30 million inbound tourists, which is to reach 10 million. However, as domestic travel demand is expected to peak out in the future due to the dwindling population, the importance of the expansion of inbound demand will be intact. 9 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism)Further While meeting inbound demand is also an important theme for individualstrengthen the tourism-related operators, the efforts made so far include the utilization ofsystem to meet inbound demand by the hotel industry to improve the occupancy rate during theMICE demandand plan to off-season. However, the volatility of tourism demand from individuals becomesexpand inbound high when a sudden event such as a natural disaster occurs, and responding to ademand. sharp fall of demand is difficult. Therefore, going forward, measures to meet corporate demand with lower volatility than individual demand should be strengthened. Especially, the number of MICE held in Japan, which includes international conferences, incentive travels, and exhibitions, is on the rise. Going forward, complex-type product creation and marketing combining tourism resources and MICE are expected to be effective regarding the expansion of inbound demand and the stabilization of total demand.One of the In the efforts of hotel operators to strengthen the system for meeting inboundchallenges for demand, the enhancement of branding as a hotel chain is thought to be ahotel companies challenge. Without a rating system in the Japanese hotel industry, it is said that,is to enhancebranding as a for Japanese hotel operators, branding other than pricing appeal for internationalchain. visitors to Japan is difficult. Additionally, a typical Japanese hotel has an even earnings structure among the accommodation, banquet, and food, and drink units, and the banquet unit, which was supported by domestic demand, currently has excessive banquet facilities due to sluggish banquet demand from companies, resulting in a situation where the banquet unit puts pressure on the hotel’s earnings. These hotels need to leverage the banquet unit, and thus some operators are trying to meet MICE demand utilizing existing banquet facilities. Regarding inbound demand for hotels, needs are expected to become diverse among visitors to Japan from Asian or other emerging countries (as well as from Europe and the U.S.), as their travel behavior becomes matured. To respond to a variety of needs, ranging from area and price brackets to utilization form, hotel companies will be required to establish and enhance competitiveness not as a single hotel but as an entire hotel chain. To realize this, a chain platform for, among other things, operation and marketing needs to be established. In the continuously harsh environment surrounding the hotel industry, owner changes through hotel revitalization or hotel asset trading can be deemed as a chance to reinforce hotel chains through the acceptance of operations. It is hoped the hotel industry will see this change of demand structure as a chance and make efforts to promote the establishment and reinforcement of a chain platform.A reconstruction In the travel industry, the environment competing for domestic travel demandof business seems to get harsher as the emergence of online travel agencies and the resultingmodels is “last-minute booking” trend become more evident. In this situation, furthernecessary fortravel agencies. promotion to enhance the system for meeting inbound demand should contribute to the improvement of profitability. To take a bigger share in inbound demand, travel agencies need to utilize external resources in addition to their know-how for planning the travel products that they have cultivated for a long duration, in order to create products to meet the increasingly diverse inbound demand. To 10 Mizuho Corporate Bank, Industry Research Division
    • FY2012 Japan Industry Outlook (Travel and Tourism)flexibly respond to diversifying inbound needs in corporate demand includingMICE and individual tourism demand, strengthening access to travel materialsseems to be effective. More active measures, for example, reinforcingcooperation with overseas LCCs capable of bringing tourists to Japan andmaking efforts to create products based on the pricing system that suit the LCCcustomers and their travel behavior, should be taken. Kazuya.Hamada kazuya.hamada@mizuho-cb.co.jp Land, Infrastructure & Transport Team Industry Research Division Mizuho Corporate Bank, Ltd. 11 Mizuho Corporate Bank, Industry Research Division