Weak yen slows growth for Japanese outbound market, but agents outline growth areas

ST Alphe Japan 2024 took place last week at the Hilton Tokyo hotel, welcoming 78 representatives of schools from around the world to meet with more than 100 agents from Japan and other countries for pre-scheduled business meetings and networking opportunities.

StudyTravel Magazine spoke to Japanese agents to get the latest insights on the study abroad business and found general consensus that the current year has been level with or slightly below the previous year with two main reasons given: the end of pent-up demand and a challenging exchange rate.

Pent-up demand: Sayaka Machi , Consulting Division Manager at Gio Club Study Abroad , advised that pent-up demand from Japan’s strict lockdown rules led to a very strong 2023, but overall numbers are slightly down this year.

The ST Alphe Japan 2024 conference in Tokyo.

Yukari Yasui , Marketing Manager at Wintech agreed that “2023 was huge, so this year has calmed down a little”, and Toyo Keiyama of BRCJP New Place Co., Ltd agreed that the “post-Covid boom has now settled, and we see a normal market level”.

Weak yen: “This year the yen is weak, students have a smaller budget, and they are waiting,” said Sayaka. “Students are delaying more and more, hopefully the exchange rate will improve soon,” added Toyo.

Miki Harada , Marketing Manager at Ryugaku Journal , said that Japanese in general are not travelling because of the exchange rate issue, which has led to 2024 being a little down on the last year overall, despite some growth in the academic year high school business.

Group business: Japanese agency association JAOS will publish its annual survey of member agencies on 2024 business in the spring, but Executive Secretary Tatsu Hoshino told StudyTravel Magazine that numbers should get closer to pre-pandemic levels, partly driven by a boom in government-subsidized group travel. JAOS members reached 83 per cent recovery in 2023.

In 2023, the Japanese government announced a target of 500,000 students abroad by 2033, and the government has increased the budget for such subsidies in the current financial year. Group travel by high schools and universities is often outsourced to Japanese agencies and is also favoring traditional destinations such as the USA and the UK, which might otherwise be considered too pricey for individual travelers.

Sayaka also added that corporate group business has been “great” in the past year, exceeding expectations.

Destinations: Ryugaku Journal has expanded its portfolio of study destinations to include South Korea, Malaysia and Dubai, and Miki can see good growth for each of these in the year ahead.

Sayaka noted Ireland as a growth destination among their main English-speaking destinations, while French and Spanish are also increasing. For BRJCP, Malta has been a growth destination as a cheaper alternative to its traditional market for the UK.

Meetings at ST Alphe Japan 2024.

Yukari said that the Philippines is coming back as a cheaper option, and Tatsu similarly noted a price-conscious shift towards the Philippines.

Working holidays: A particular boom sector for Japanese agents, and another trend that reflects the weaker yen is the working holiday sector.

Yukari said that five-to-eight years ago, financial issues were not so bad, and students could get more support from their parents for study abroad programs. As budgets got tighter, students have started to look for overseas experiences where they can work, earn money, and cover their fees.

The working holiday route has become more popular.

At the end of 2023, the UK increased its youth mobility allocation for Japan from 1,500 per year to 6,000 per year, and this had led to an increase in enquiries about the UK, she added.

However, even within this stream students are looking for savings, Sayaka said, with some shorter periods of English language study being booked.

Top end: While some Japanese budgets have been affected by the exchange rate and a sluggish economy, wealthier segments are still willing to pay for top-end programs.

PLan B, Inc. , an agency specializing in elite-level sports study abroad told StudyTravel Magazine of record numbers in 2024 and an even better year is expected in the next 12 months. “The top end of society is getting richer,” Mikio Takano , President, said. Another emerging trend is for younger students travelling and that some of the younger cohorts are highly proficient in English.

Toyo similarly said that there has been strong demand for some of the most expensive summer programs in his portfolio and that certain sectors of society are not impacted by price – although he believes such a cohort may be shrinking.

Juniors: Life Journey Education works in all sectors, but specializes in junior camps and boarding camps, and Seiwa Yanagi , Managing Director, advised of a distinct shift in business towards those sectors, with juniors accounting for 80 per cent of students this year.

“We see rising demand for juniors. Parents are sending students early for a few reasons, including globalization, more emphasis on English language learning in the primary school system in Japan, and parents realizing the importance of their kids being global citizens.”

“For adults, study abroad is a luxury that can wait. But parents are willing to invest in their children’s education.”