[Summary]

During Golden Week in 2026, Japanese demand for overseas travel is recovering. However, a recovery in travel demand does not necessarily lead to increased profits for travel agencies and inbound-related stocks. The focus has shifted from "number of people" to "unit price" and "demand distribution," and companies that are highly dependent on China need to be cautious in their outlook.

International travel is returning

According to JTB forecasts, the number of overseas travelers during the 2026 Golden Week period will increase by 8.5% from the previous year to 572,000. Demand for overseas travel among Japanese people is on a recovery trend, especially in nearby Asia such as South Korea, Taiwan, and Southeast Asia.

This move itself is a tailwind for travel companies. In particular, short-haul travel is an area where it is easy to confirm the current recovery in demand, as it is easy to balance prices and schedules, and it is also compatible with short vacations.

However, what investors should be looking at is not just the recovery in travel numbers. What matters is whether that demand translates into high profits.

Travel business changing from “number of people” to “unit price”

In the past, the demand for Chinese tourists was quite easy to understand. This is a model where people come to Japan and buy in bulk at drugstores and electronics retailers, with benefits spreading widely to retail, transportation, and travel-related areas. Simply put, the source of profit was the number of people.

But things are different now. With the expansion of e-commerce in China, the growth of domestic brands, and the spread of cross-border e-commerce, the necessity to buy in bulk in Japan has diminished. The focus of consumption is shifting from goods to experiences.

What stands out in current demand are luxury hotels, restaurants, local tourism, anime and cultural experiences, and experiential consumption that is easily shared on social media. The skills required of travel agencies are also changing from the ability to send large numbers of groups to the ability to design high-priced experiences and secure profit margins.

Political factors cannot be ignored

Another important point of discussion is Japan-China relations.

After the end of 2025, due to the deterioration of Japan-China relations, China issued a warning against traveling to Japan. Since then, demand for travel from China to Japan has weakened, and some airline routes have seen flight reductions and cancellations.

In other words, when looking at inbound-related stocks, it is not enough to just look at ``whether Chinese tourists will return'' as before. What is important is the high degree of dependence on China.

Companies that are able to diversify demand into Asia other than China, Europe and America, domestic corporate demand, educational travel, MICE, etc. are likely to have more stable earnings.

Views on HIS, KNT-CT, and Tobu Top Tours

HIS

For HIS, the recovery in overseas travel among Japanese people is a tailwind. In particular, a recovery in demand in short-haul Asia such as South Korea, Taiwan, and Southeast Asia is likely to be a positive factor.

On the other hand, high airline ticket prices and fuel surcharges tend to put pressure on profit margins, so it is important to design products that do not get caught up in mere price competition. Even if the number of tourists increases, stock valuations will be difficult to improve due to low profit margins and high sales.

KNT-CT Holdings

KNT-CT Holdings is focused on recovering group travel and corporate demand. As more and more people travel on their own, models that rely on traditional packages remain relatively difficult.

On the other hand, if we can capture local government projects and MICE demand, it may lead to stable profits that are less affected by economic fluctuations. This is a situation where the quality of corporate and public projects is more likely to be evaluated than the expansion of the number of people.

Tobu Top Tours

Tobu Top Tours appears to have a high proportion of educational travel and government projects, so the direct impact of the slowdown in sales in China is relatively small.

However, indirect impacts can be felt through the spread to local tourism and inbound-related facilities. It is necessary to separate the advantage of having stable projects from the risk of fluctuations in tourism-related market conditions.

Points seen by the stock market

The market valuation axis has clearly changed from before.

In the past, the simple view that ``increasing number of Chinese tourists = positive for travel stocks and retail stocks'' was established. However, now it is difficult to measure a company's value based on the number of tourists alone.

There are four points investors should look at:

  • Is there a high degree of dependence on China?
  • Do you have high-priced products?
  • Are you capturing non-Chinese demand such as Southeast Asia?
  • Are you able to transition from group travel to individual/experience-based travel?

Even if the number of tourists returns, stock valuations will remain weak if profit margins are low. Conversely, companies that can increase unit prices and profit margins without significantly increasing the number of employees are more likely to be evaluated.

What to watch over the next 6 months

In the short term, summer vacation demand is the biggest focus. In addition, travel-related stocks can be volatile due to foreign exchange rates, fuel surcharges, Chinese travel policy, and news on Japan-China relations.

In the medium term, it will be important to see how far travel agencies can support "experiential tourism." Strengthening OTA, products for wealthy people, local experiences, and multinationalization of inbound tourism. This area is likely to be a theme that will cause earnings disparities in the future.

Summary

Overseas travel demand for Golden Week 2026 is recovering.

However, this does not mean a ``resurrection of China's explosive purchases''. Travel demand is shifting from quantity to quality.

What is important for travel companies is not simply increasing the number of travelers, but whether they can provide experiences with high unit prices and high profit margins. Companies that can break away from the model of dependence on China and group dependence and shift to individual travel, Southeast Asian demand, experiential tourism, and high value-added products are likely to be the winners in the future.

When looking at travel-related stocks, it is now necessary to look not just at ``whether people have returned,'' but also ``what kind of travel money is being spent on.''

Reference materials

This article is for educational and informational purposes only, based on public information. It is not a recommendation or solicitation to buy or sell any specific security or financial product. Although care is taken with accuracy, the content and future investment outcomes are not guaranteed. Final investment decisions should be made at your own judgment and responsibility.