September 11, 2025

Japanese Travel Agencies Look Overseas as Domestic Demand Stalls

According to the United Nations World Tourism Organization (UNWTO), the number of international travelers worldwide is estimated to reach 1.4 billion in 2024, recovering to 99% of pre-COVID levels. Total export revenue from the global tourism industry, including passenger transport, is expected to hit a record $1.9 trillion (approximately 270 trillion yen).

Global Tourism Rebounds, but Japan Lags Behind

While global tourism demand has nearly recovered, Japan’s outbound travel remains stagnant. According to the Immigration Services Agency, the number of Japanese citizens traveling abroad in 2024 was 13 million, only 65% of pre-pandemic levels. The weak yen and persistent global inflation have discouraged many from traveling overseas.

This poses a challenge for Japanese travel agencies, which rely on Japanese customers for more than 90% of their transaction volume. Shifting toward inbound tourism and tapping global demand has become an urgent task.

Agencies Turn to Overseas Sales and Inbound Demand

Traditionally, agencies such as JTB and HIS operated overseas bases mainly to serve Japanese travelers, arranging hotels and optional tours at destinations. Now, strategies are shifting. HIS, for example, is centralizing global bookings through its hub in Manila, Philippines, to capture international demand directly.

Inbound travel to Japan is also experiencing a surge. According to the Japan National Tourism Organization (JNTO), over 10 million foreign visitors arrived between January and March 2025—marking the first time quarterly arrivals exceeded that number. However, most of this business is arranged through foreign agencies, which limits Japanese firms' ability to benefit from the growth.

Competition Shaped by Flexible Networks

The pandemic forced many major agencies to close or consolidate their overseas operations, leaving them with fewer resources and staff to rebuild. With domestic profitability still under pressure, flexibility in sales networks will likely determine competitiveness in the years ahead.

JTB, for instance, is expanding into the growing global MICE (Meetings, Incentives, Conventions, Exhibitions/Events) market as part of a broader strategy to diversify beyond Japanese outbound travel. Across the industry, companies are reassessing portfolios long dependent on domestic customers, recognizing that overseas markets may be the actual driver of post-pandemic growth.