JTB announced its consolidated financial results for the first half of FY2023 ending September 30 2023, reporting the first half-year operating income in the past four years due to recovery of all travel business.
Sales were up 32% tear on year to 510 billion JPY, and gross margin on sales were up 28% to 118.2 billion JPY. Operating income reached 8.7 billion JPY, improving from operating loss of 4.7 billion JPY a year ago, and ordinary income amounted to 12 billion JPY, improving from ordinary loss of 2.2 billion JPY. JTB finally posted net income of 16.1 billion JPY, turning up from net loss of 2.9 billion JPY a year ago.
The travel business has recovered well mainly because of demand recovery since the infection status of COVID-19 was lowered in May 2023. Gross margin on sales were up 25% to 46.6 billion JPY for domestic travel, up 489% to 18.3 billion JPY for outbound travel, up 677% to 6 billion JPY for inbound travel and up 218% to 6.5 billion JPY for global travel.
Eijiro Yamakita, JTB CEO, explained, “Domestic travel has recovered well in both FIT and group segments, and inbound travel and global travel have been going on the right track, but outbound travel is still halfway to the full recovery, largely affected by weaker Yen and rise in prices.”
He revealed that demands for Hawaii and Asia in this coming New Year holiday period have recovered well, and demand for South Korea has been back to 70% or more of 2019. JTB has forecasted the outbound travel demand as a whole will be between 80% and 85% of the 2019 level in 2024, followed by the full-scale recovery in 2025.
JTB increased operating expenses in accordance with the increase in sales, but cut the fixed expenses of 27.3 billion JPY compared to 2019 through relocation of human resources, reorganization of retail shops and more effective operation. The number of retail shops reduced from 480 in 2019 to 280 in 2023.
By business segment, sales increased by 31% to 349.6 billion JPY for the tourism business, by 31% to 41.9 billion JPY for the area solution business and by 217% to 79.8 billion JPY for the global business, but sales in the business solutions were down 13% to 84.1 billion JPY because the COVID-19-related BPO business almost finished.
JTB has not changed the financial forecast for the full year of FY2023 ending March 31 2024: sales of 1,103 billion JPY and operating income of 13.4 billion JPY.
Planning a large scale of investments
JTB revealed its investment plan of more than 120 billion JPY by FY2028, which consist of 61 billion JPY for the area development projects and corporate solutions including MICE, 45 billion JPY for DX and IT-related developments and 16 billion JPY for retail and facility developments.
For the area development projects, JTB is developing tourism infrastructures and enriching tourism contents for local areas to encourage tourists to stay longer and spend more money.
For DX and IT-related developments, JTB is evolving its original ‘Tourism Platform Gateway,’ which is an one-stop service solution for in-destination activities from booking to payment. Also, usage of generative AI in retail shops, business process re-engineering (BPR) and effective business operations for business partners are included.
