Photo/Illutration Tourists return to the Todaiji temple area in Nara city. (Akira Nemoto)

Japan's largest travel agency is feeling the sting of the novel coronavirus pandemic, as slumping demand will force it to close about 20 percent of its outlets over the next five years.

Eijiro Yamakita, president of JTB Corp., said the company plans to shutter about 100 domestic outlets over a five-year period and move toward greater use of online channels for customers, in response to questions from The Asahi Shimbun.

In fiscal 2019, JTB had about 480 branches throughout Japan. Staff from the closing outlets will be moved to other locations and offered various opportunities.

Yamakita said the plan would involve a reduction of a targeted number of employees.

“It will likely take a considerably long time for complete recovery (of travel demand)," he said. "While reducing the number of outlets, we will also change the full-service branches into streamlined outlets while making greater use of digital measures. We want to move quickly in making such changes.”

JTB, which has branches in most major cities of Japan, had long been considered a “department store-type” travel agency because many outlets had specialized sections for domestic and foreign travel.

To increase efficiency, the company plans to create a new online support structure that would utilize the knowledge and skills held by those in highly specialized areas.

Tourism demand plummeted with the spread of the novel coronavirus pandemic. While domestic travel is slowly recovering, in part due to the government’s “Go To Travel” tourism promotion program, there are no signs of recovery in foreign tours, which are considerably more expensive.

According to the Japan Tourism Agency’s statistics on the transaction amount handled by major travel agencies, JTB totaled 84.5 billion yen ($801 million) for the period between April and August. That represented an 88-percent decrease from the same period in 2019.

JTB has already reached an agreement with its labor union to forego winter bonuses for its approximately 13,000 employees.

Yamakita also said the company procured about 140 billion yen in spring to meet its cash flow demands.

The travel agency H.I.S. Co. has also announced its plan to close about one-third of its 260 or so domestic branches by next summer. About 80 percent of the company’s business involves foreign travel.

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