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On the target model of the adjustment of my country’s travel agency business system

Since 1978, my country’s tourism industry has developed rapidly. As an important part of the tourism industry, travel agencies have also grown from being an oligopoly in the early stages of development. The industry has developed into the current monopolistic competition industry, and the industry scale has basically taken shape. However, as many scholars and industry insiders have noticed, the development of my country's travel agency industry has gradually fallen into trouble along with the transformation of my country's travel agency market structure, and the current travel agency management system has exposed more and more problems. At the same time, the final conclusion of the General Agreement on Trade in Services (GATS) and the Chinese government’s firm attitude toward joining the World Trade Organization, including the General Agreement on Trade in Services, have determined that my country’s travel agency industry will eventually directly face the challenges posed by foreign countries. The entry of travel agencies has posed challenges to the development of travel agencies in our country. This article attempts to propose a target model for the adjustment of my country's travel agency business system through a systematic analysis of the characteristics of my country's travel agency industry and the current business system, so that my country's travel agency industry can prepare for rainy days and more effectively meet challenges and participate in international competition. 1. Analysis of the operating system of my country's travel agency industry

After more than ten years of development, my country's travel agency industry has formed a certain scale and has formed its own characteristics under the dual effects of industry regulations, industry systems and market mechanisms. : From the perspective of the category structure of my country's travel agency industry [1], the three types of agencies have an overwhelming advantage; from the perspective of the scale structure of my country's travel agency industry, small-scale travel agencies account for the absolute majority; from the perspective of geographical distribution, my country's travel agencies account for the majority of the country's travel agencies. The distribution is basically reasonable; industry profits are declining year by year, and my country's travel agency industry is gradually becoming a low-profit industry.

The current operating system of my country’s travel agency industry is the result of the combined effects of industry policies and regulations, traditional economic systems and current market mechanisms. Although this system has its rationality to some extent, as far as my country’s travel agencies are concerned In terms of industry development practices and trends, its biggest drawback is the existence and deterioration of the following series of problems:

(1) Large travel agencies have not achieved economies of scale and their scale advantages cannot be brought into play.

Large travel agencies have many advantages in tourism product development, tourism service procurement, tourism market expansion, tourism reception, funds, information, talents and risk resistance. Therefore, it is easy to achieve economies of scale. In my country's travel agency industry, the economies of scale of large travel agencies are not obvious, and their advantages are far from being fully utilized. This is mainly reflected in the following aspects: ① my country's tourism industry has maintained a good development momentum in recent years, and the market continues to expand. , tourism revenue, especially international tourism revenue, is growing rapidly. Under such circumstances, the business development of some large travel agencies is slow. Faced with many new business opportunities in competition, they themselves are in the predicament of maintaining the market or having no choice but to suffer a decline in market share. ② Large travel agencies failed to play their due role in the tourism market, that is, they failed to calm down the excessive competition in the market and failed to play a role in guiding and stabilizing the market, causing the chaos and disorder in the market to become a problem that plagues the development of my country's travel agency industry and causes travel agencies to The stubborn waste of resources has caused the company itself to be unable to avoid the negative effects brought about by this market chaos. ③In terms of internal management of travel agencies, a prominent phenomenon is that some large travel agencies generally implement department contracting or disguised department contracting to strengthen departmental rights and interests, making some large travel agencies actually become a collection of small travel agencies that are relatively independent in business. In this kind of Under this situation, large travel agencies certainly cannot exert their due advantages and find it difficult to form economies of scale.

(2) Small and medium-sized travel agencies lack clear market positioning, and their development is difficult.

As far as the current overall situation of small and medium-sized travel agencies in my country is concerned, their characteristics are concentrated in the limited number of receptions and low profit levels. In terms of the number of receptions, many small travel agencies in our country have been in a situation where there is no hope for development in recent years but they can barely support it. Since the National Tourism Administration implemented the travel agency quality guarantee system in the travel agency industry in January 1995, many small travel agencies have been overwhelmed and have withdrawn from the industry. On the one hand, this phenomenon reflects the economic strength and operating conditions of many small travel agencies. On the other hand, it also reflects to a certain extent the owners’ rational expectations for the future development of the industry and themselves. In terms of profit margins, many small and medium-sized travel agencies in my country that mainly operate domestic tourism business are Category II and Category III agencies. According to information provided by the National Tourism Administration, the average profit margin of these two types of travel agencies was less than 8% in 1994 and about 5.4% in 1995. The average profit margin of a large number of third-category travel agencies dropped to 4.24% in 1995. These data only reflect pre-tax profits. If income taxes are deducted, the remaining net profits of these travel agencies will be very small.

The coexistence of limited reception volume and low profit margin fully illustrates the current difficult operating situation of small and medium-sized travel agencies. There are of course many reasons for this result. From the perspective of travel agencies themselves, most small and medium-sized travel agencies have limited human, financial and material resources, but their business activities involve all aspects from product design and development to tourism reception. This multi-link operation will inevitably lead to a lack of depth in each operation.

Shallow product development directly affects its appeal to tourists; weak promotion makes many domestic tourists lack understanding of travel agency services, and are half-confident about the affordable prices and other conveniences that can be obtained by using travel agencies. This ultimately makes domestic tourists distrust travel agencies. The utilization rate is low and the market scope is narrow; poor reception has caused or strengthened the public's bad impression of travel agencies, reducing repeat customers and other sources of customers. It will be difficult for travel agencies to survive in this vicious cycle.

(3) Vicious price competition prevails in the travel agency industry and the market order is chaotic.

The original intention of the national tourism authorities’ classification of travel agency categories and regulations on the business scope of travel agencies in 1985 may be to regulate the market and ensure product quality through this form of division of labor. In the subsequent development of my country's travel agency industry, due to the imbalance in the proportion of first- and second-category agencies, the business volume of second-category agencies was obviously insufficient. In order to survive, many second-category agencies violated national regulations and operated beyond their scope, directly soliciting customers overseas. During this period, the ineffectiveness of the national competent authorities in law enforcement caused this phenomenon to spread rapidly, and some first-category agencies, seeking small profits, made ill-gotten gains by handling visa notifications for second-category travel agencies, which undoubtedly contributed to this. It played a role in fueling the flames, and eventually many third-category agencies began to engage in outreach and international tourism reception business. In addition, the emergence and popularization of this phenomenon undoubtedly also includes the travel agency industry's denial of my country's travel agency artificial market division of labor model based on horizontal division of labor and characterized by various franchises. In October 1996, the State Council promulgated the "Regulations on the Management of Travel Agencies", which made a series of major adjustments to my country's travel agency management system. However, as far as the adjustments to the categories of travel agencies are concerned, we may say to a certain extent that this is just a change. This is an approach of "treating the head when it hurts and treating the foot when it hurts", that is, it only cancels the second-category agencies that once had the greatest interference with the market order of my country's travel agencies, and then renames them international travel agencies and domestic travel agencies based on the business division of the remaining two categories of travel agencies. The basis of the division of labor and the characteristics of the franchise have not changed, and its future operating results are likely to repeat the mistakes of history. From this point of view, the artificial market division of labor model has not been and is difficult to be accepted by industry players, and it is difficult to form an effective natural division of labor system in the industry. In addition, the few industry organizations have extremely limited binding force and their authority in management The various problems encountered in this regard, and the current market chaos are naturally inevitable.

A prominent manifestation of the chaos in the travel agency market is the vicious price competition among travel agencies that focuses on price-cutting competition. Price-cutting competition is a concentrated reflection of the immature market mechanism of the industry and the lack of effective norms and standards in the industry. It greatly damages the vitality of participants and makes it more difficult for non-participants to operate. The result of competition will not stimulate the improvement of product quality, but will lead to quality being ignored, no intention to ensure quality or the inability to ensure quality, making travel agencies involved in another form of vicious cycle.

In addition to the above problems that are directly related to the current operating system of travel agencies in my country, the existence of many other problems in the industry is also closely related to the current operating system. Such as the duplication of travel agency products, weak promotion capabilities of travel agencies, especially overseas promotion capabilities, and low overall reception capabilities of travel agencies. Among them, the duplication of travel agency products is a long-standing prominent problem in my country's travel agency industry. Since travel agency products lack entry restrictions such as trademark rights and patent rights[2], and there are not many technical barriers to retain and monopolize, once some travel agencies with development capabilities develop some new products that can cater to market demand, they will Many small and medium-sized travel agencies rushed to imitate or participate in operations, which to a great extent weakened the enthusiasm of powerful travel agencies to develop and promote products in depth, while some lacked the necessary hardware equipment and did not have the necessary equipment to guarantee The existence of small and medium-sized travel agencies based on the "software" of reception quality will inevitably reduce the overall reception strength of travel agencies.

2. The target model for the adjustment of my country’s travel agency business system

As mentioned above, my country’s current travel agency business system has caused many difficult problems, and through the previous analysis we can also We have learned that the current industry characteristic of my country's travel agency industry is that small-scale travel agencies, dominated by Category III agencies, account for an absolute majority, but we have not denied the existence of a few large-scale travel agencies. In fact, it is the limited number of large-scale travel agencies that have driven the average profit level of the industry to a certain extent, but they cannot change the fact that industry profit margins are declining year by year and that my country's travel agency industry is gradually becoming a low-profit industry. In addition, another outstanding feature of my country's travel agency industry is its basically reasonable geographical distribution. In view of this, we believe that the adjustment of my country's travel agency operating system is imperative. Taking into account the current reality of the industry and the international competition that my country's travel agency industry will face after joining the World Trade Organization, we believe that the direction of adjustment of my country's travel agency operating system It is a target model that achieves the groupization of large travel agencies, the specialization of medium-sized travel agencies, and the formation of a network of small travel agencies through the agency system through the transformation, differentiation, combination, and addition of existing travel agencies.