The current external industry environment for travel agency business in new zealand
the fundamental information for the investors. Travel Agent Association of New Zealand (2003) indicated the profitability in a financial report in which travel agencies in New Zealand have a total proceeds around $2.5 billion per annual. With the boom of New Zealand tourism, the figures would increase significantly in the next few years (TAANZ, 2003). Take Flight Centre as an example, the company estimated the net profit for the year is about $212 million in 2008(Northern Territory News, 2008). To make a comparison, the annual income of Flight Centre in 2008 almost covered the whole industry’s gain in 2003. Obviously, the with a large demand of travellers from New Zealand and other countries, there was and would be a great increase in profit for travel agencies based on the statistical figures (Medcalf, 2005). Therefore, investors could expect to see a great inflow of capital if they invest money to the travel agency industry. However, every agency is selling holiday packages with a low profit margin and they need a large number of customers to gain profits in order to survive in the market (Oppermann, 1999). So retaining customer loyalty is essential to keep profitable for every travel agency (Oppermann, 1999).
The Booming Market & Marketing Strategies Another economic factor need to be considered is Marketing. In a recent report, TAANZ (2011) showed that the total number of New Zealand travellers in 1986 was about 0.5 million and the figure rose up to approximately 2 million in 2011. Therefore, based on the fast development tendency, there will be a large demand in travel agencies in the future. From the perspectives of companies, each agency has its own marketing strategies. For example, House of Travel focuses more on building overseas market. Through the online travel booking system, the agency has expanded the market into other countries like Australia and the U.S. (Medcalf, 2005). Customers do not have to go to...