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Japan Times
2 days ago
- Business
- Japan Times
U.S. trips to Japan surpass Paris for hot summer vacation destinations
Travel between the U.S. and Japan is emerging as a rare bright spot this summer for American carriers, easing the blow from a lingering drop in demand for domestic flights. More than 1.5 million seats are scheduled to fly from the U.S. to Japan during June, July and August — a 6.4% increase from a year ago, according to aviation data analytics firm OAG. Tokyo ranks second only to London and above Paris, which landed third on online travel booking site Kayak's list of most popular destinations this summer. "Trips to Japan are really in fashion right now,' United Chief Commercial Officer Andrew Nocella said in an interview with Bloomberg Television, calling it one of the airline's "hottest destinations' for the summer. "Everybody is trying to take the family to Japan. I'm not sure we'll have enough seats, to be frank.' United is one of the biggest beneficiaries as it flies more flights — and passengers — to Japan than any other U.S. carrier. But American Airlines Group and Delta Air Lines have increased the number of seats they're flying to Tokyo this summer to keep up with demand. Those Pacific routes and other international service have bolstered revenue at the biggest U.S. airlines, helping to insulate them from a sudden slump in domestic air travel over the past few months that has pinched carriers focused on serving destinations in the U.S. Long a cost-prohibitive port of call for budget-minded American travelers, a multiday stay in Japan has become much more affordable as a result of lower airfares and a favorable foreign exchange market. So it's suddenly back on top of many travelers' bucket lists. A group of tourists in the outer gardens of the Imperial Palace in Tokyo. | bloomberg "If they're looking for value, given where currency is on the yen side, going to Japan right now makes a lot of sense,' said Conor Cunningham, a Melius Research analyst. The yen has tumbled against the dollar over the past four years and isn't far from its weakest levels in almost four decades. That has depressed demand for outbound travel from Japan but increased purchasing power for inbound American visitors. One-thousand dollars gets travelers almost ¥146,000 now. In June 2019, the same amount was worth roughly ¥108,000. "It can make a huge difference to the demand for a destination,' said John Grant, chief analyst for Luton, U.K.-based OAG. The number of U.S. visitors to Japan climbed nearly 30% through May from a year earlier, according to the Japan National Tourism Organization. Travelers from Japan to the U.S. rose just 3.5% over the same period, data from the International Trade Administration shows. Filling the gap Traffic between the U.S. and Japan is still below prepandemic levels, but it's begun to catch up quickly over the past two years. For U.S. airlines, the pronounced uptick in travel to Japan this year couldn't come at a better time. Bookings for domestic flights dropped precipitously early this year and have been slow to recover. U.S. domestic travel volumes last year exceeded the previous highwater mark of 2019, according to airline industry trade group Airlines for America. But that bullish mood changed earlier this year soon after U.S. President Donald Trump first announced plans to impose widespread tariffs. Uncertainty about the economy and potential trade wars eroded demand quickly, surprising U.S. carriers that had forecast continued strength into 2025. As a result, many withdrew their full-year financial guidance in April, signaling caution about bookings for the remainder of the year. Most recently, JetBlue Airways last week said it would hasten cost cuts by eliminating more flights, delaying aircraft updates and parking planes due to weaker-than-expected demand. The ancient Sensoji temple is the oldest in Tokyo's Asakusa district. | bloomberg At the same time, a prolonged post-pandemic surge in Americans' trips to key European destinations has begun to wane. Summer capacity from the U.S. is down 1.8% to Great Britain and 0.4% to Germany as of June 5, the latest data available, according to travel bookings app Hopper. Some of that Europe fatigue has spurred interest in other global destinations, such as Tokyo. "People are saying, 'I did Europe, now I want to do something different'' and are choosing Japan, Peter Vlitas, executive vice president of partner relations at Internova Travel Group, said in an interview. "And there are a bunch of new travelers who want to go there, and it's driven by the strength of the dollar.' American Airlines Group will fly 11% more seats because it's using a larger Boeing 777-200 between Dallas-Fort Worth International Airport and Tokyo's Narita Airport, and it added a flight last June between New York's John F. Kennedy International and Haneda, a spokesperson said. American partners with Japan Airlines to coordinate flights between the U.S. and Japan. JAL is increasing seats on its flights between the countries 12% this summer, according to OAG. Onik'a Gilliam, 54, is planning a two-week visit to Japan from Seattle next month with her 15-year-old daughter, who is a big fan of anime. "It seems like everybody is going to Japan,' she said. "I'm also living a very much 'you only live once' mentality lately. Things are pretty chaotic in the world right now, so I'm just making the choice to go out there and do it.' A lawyer who splits her time between Seattle and Puerto Vallarta, Gilliam said tickets for her first trip to Japan cost less than when she initially considered making the trek back in 2023. "It was surprisingly not as expensive as it had been,' she said. Delta has increased the number of seats it's flying in the market nearly 7% for June through August over 2024, including a 20% jump in Delta One and Delta Premium Select seats, the airline said. United isn't increasing its flights or capacity even though its U.S.-to-Japan summer bookings are up 15% over 2024, a spokesperson said. The Chicago-based carrier already flies to Japan up to 20 times a day, including 17 flights to Tokyo, two daily to Osaka and one flight a day to Nagoya, Japan's fourth-largest city after Tokyo, Yokohama and Osaka. All Nippon Airways — United's code-sharing partner — is trimming seats by 2.2%. Cheaper tickets have spurred more American travelers to cross the Pacific Ocean. Average prices on long-haul routes to Asia — which includes Japan — are running 11% below last summer, according to Booking Holdings' Kayak. Average round-trip airfare to Osaka is down 9% this summer to $1,309 and 3% lower for Tokyo flights. Los Angeles-based Brian Wu has been taking advantage of low-cost flights to Japan and the weaker yen. The 23-year-old already has visited the country once this year and is planning two more trips this fall. Wu says the cost of flying to Tokyo from the West Coast is about the same price as a ticket to New York, and that meals in Japan have cost him as little as $3 based on favorable foreign exchange rates. "These prices not only drive my decision, but also my peers' (decisions) to go to Japan,' the machine-learning research engineer said. Asians avoid Japan The influx of Americans is making up for a sudden dearth of visitors from Japan's neighbors in Asia. Airline bookings from Taiwan, South Korea and Hong Kong have dropped since April — with bookings from the latter plunging by an average of 50% versus a year ago, according to a Bloomberg Intelligence analysis of ForwardKeys data. Among the reasons: Fear about the possibility of another huge earthquake and tsunami hitting Japan like the 2011 natural disaster that left more than 20,000 people missing or dead. That stems from the circulation on social media of a soothsayer's prediction for such a calamity this summer in a popular Japanese manga. Meanwhile, in recent months, Japanese travelers have continued to book trips to the U.S., bucking a trend among some Canadians and Europeans of avoiding the U.S. to protest Trump's border and trade policies. Load factors, or the percentage of seats filled, are in the high 80% on flights to the U.S., and there's been no drop-off in demand during the summer, Japan Airlines Managing Executive Officer Ross Leggett said in New Delhi early this month. Even so, overall traffic from Japan has been held back by the yen's dramatic reversal against the dollar, and it remains well below prepandemic levels. Last year, some 3.9 million passengers booked travel from Japan to the U.S., down from 4.7 million passengers in 2019, according to Cirium.
Bloomberg
3 days ago
- Business
- Bloomberg
US Trips to Japan Surpass Paris for Hot Summer Vacation Destinations
Travel between the US and Japan is emerging as a rare bright spot this summer for American carriers, easing the blow from a lingering drop in demand for domestic flights. More than 1.5 million seats are scheduled to fly from the US to Japan during June, July and August — a 6.4% increase from a year ago, according to aviation data analytics firm OAG. Tokyo ranks second only to London and above Paris, which landed third on online travel booking site Kayak's list of most popular destinations this summer.
