JTB announced large reductions in consolidated sales and profits for FY2019 ended March 31 2020, as the Japan’s leading travel company was hit by COVID-19 in the last quarter although it increased sales through 10 consecutive holidays in the Golden Week period and Rugby World Cup particularly and with higher business travel demand in the first three quarters.
JTB revealed that COVID-19 forced it to loss about 100 billion JPY in sales and about 15 billion JPY in operating profit.
As a result, JTB posted sales of 1,288.6 billion JPY (-5.8%), operating profit of 1.4 billion JPY (-78%), recurring profit of 2.5 billion JPY (-15.5%) and net profit of 1.6 billion JPY (loss of 15.1 billion JPY in FY2018). Despite the challenging situation, JTB successfully ensured a surplus due to its cost reduction efforts through the structure reform.
Under the COVID-19-related state of emergency declaration, JTB closed all retail shops nationwide by May 31 and has decided to cancel overseas package tours for Hawaii and Micronesia by July 15 and those for other destinations by July 31.
The current condition in FY2020
In the first quarter of FY2020 (April to June), JTB has forecasted a 98% decrease in domestic package tour customers and zero in overseas package tour customers.
JTB does not announce financial forecasts for FY2020 ended March 31 2021 because it is difficult to see how much COVID-19 impacts the business through FY2020.
Business results by segment in FY2019
Individual travel business: sales of 593 billion JPY (651.4 billion JPY in FY2018), operating profit of 100 million JPY (5.7 billion JPY in FY2018)
JTB increased sales in the first three quarters with higher demands for Hawaii and Europe especially, taking advantage of 10 consecutive holidays in the Golden Week period, but lost sales and profits in the last quarter due to Typhoons in the summer and COVID-19.
Corporate travel business: sales of 402.3 billion JPY (409.9 billion JPY in FY2018), operating profit of 9.7 billion JPY (10 billion JPY in FY2018)
Before COVID-19 broke out, JTB ensured the same level of sales and operating profit as a year ago, increasing sales of business travel and Rugby World Cup 2019-related products.
Global business: sales of 215.4 billion JPY (228.1 billion JPY in FY2018), operating profit of 3.1 billion JPY (loss of 3 billion JPY in FY2018)
JTB propelled the global DMC business and the global business solution business (GBS) as main strategies. One of the global DMC business efforts was launch of seat-in couch bus touring 12 countries in Europe. For GBS, sales of meeting & event including large scale sports events increased.
Sales of four travel sections in FY2019
Domestic travel: sales of 454.5 billion JPY (-10.2%)
ACE package tour brand: -14% in FY2019, -40.1% in the fourth quarter
Group: -4.2% in FY2019, -37.3% in the fourth quarter
Overseas travel: sales of 440 billion JPY (-6.2%)
LOOK package tour brand: -3.4% in FY2019, -18.4% in the fourth quarter
Group: -9.5% in FY2019, -32.1% in the fourth quarter
Inbound travel: sales of 68.4 billion JPY (+11.5%)
-41.1% in the fourth quarter
Global travel (travel between third countries): sales of 110.6 billion JPY (-4.2%)