Travel Agency Industry

Topics: Travel agency, Travel website, Travel agencies Pages: 8 (2279 words) Published: March 22, 2013
Executive summary
This report is designed to evaluate the most important aspects of the modern travel industry in New Zealand. The development of the internet over recent times has revolutionised the travel industry, and is threatening to cause its demise. Travel agencies have been forced to adapt to these advances, as the likes of airlines and hotels look to eliminate the intermediary role which travel agencies build themselves around. Studies suggest that there is still demand present in the industry for the services of travel agents, as society, particularly older generations, feel more secure in booking large proportions of their trips in a face-to-face environment. The existing competition in the market of travel agencies is very high, with further competition coming directly from suppliers themselves. In particular, there are airlines who have also branched off to include add-ons in their options. Customer loyalty is a large factor in the success of a modern travel agency, as building relationships is prioritized to retain and build on customer bases.

The changing ways of the new zealand travel agency

Travel agencies have been publicised in the media as being a dying profession, as consumers develop a “do it yourself approach” to organising trips. This report is designed to give a general overview of the industry for the modern travel agency. The most important positive and negative aspects will be looked at so that it can be determined whether or not that this is an attractive market in which to establish a business in New Zealand.

The impact of

technological advances, particularly with the internet, will be discussed in depth. Also touched upon is the behaviours of customers during the recent technological revolution and whether or not travel agencies should be concerned about trends and publicised issues. The importance of building customer relationships to establish loyalty from customers will be the final central topic of the report.

The increasing significance of the internet in today’s society has had a profound effect on the behaviour of tourism consumers (Chakravarthi & Gopel, 2012). These progressions appear to be reducing the need for the intermediary role upon which the travel agency business model is built (Castillo- Manzano & Lopez- Valpuesta, 2010), and has come to be known as “disintermediation” (Chakravarthi & Gopel, 2012). The competition between agencies has always been based around clients being reached directly and quickly, but the internet is now beginning to satisfy this need of consumers (Chakravarthi & Gopel, 2012). For example, both hotels and, more significantly, airlines, have built their own websites which enable them to connect with consumers directly, as opposed to through an agent. This removes the additional costs for commissions, and also allows them to easily integrate reward systems for customers into their programmes (Chakravarthi & Gopel, 2012). The influence of airlines will be discussed further later in this piece.

It was found that in the year of 2008, 80% of travel agents from the United States reported a decline in annual revenues compared with the previous year (Hayhurst, 2009).

For this

reason, the modern travel industry must adapt their approach in business to have a business model more service- orientated, rather than the product- orientated approach they had traditionally (Richard & Zhang, 2012). For a travel agent, it appears that their ability to be active on their career path has a major influence towards their ability to remain sustainable during difficult economic periods (Hayhurst, 2009).

The changing ways of the new zealand travel agency

“The tendency we all had last year was to pull in the wagons and conserve cash, but it turns out that for travel agents, moving forward aggressively helped them through a tough period." (Weissman, 2009. Cited in Hayhurst, 2009)

It is even felt...
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