Analysis on Five Forces Model of Travel Agency Industry

The pillar industry of tourism tertiary industry refers to the industry that provides services such as scenic spots, tourism and accommodation for consumers. With the continuous development of economy and society, the consumption power of consumers is rising day by day, and tourism has become a way of entertainment in many people's lives. However, if the travel agency industry wants to develop, it must be carefully analyzed from all aspects.

1. Newcomers

Travel agencies have low barriers to entry, high profits, and the continuous influx of new entrants will lead to more intense competition in the industry. Among them, the price war is particularly prominent. Price war has advantages and disadvantages. Good service at the right price can provide consumers with high-quality travel services, but it is difficult for most low-cost travel agencies to guarantee the quality of service.

Step 2 substitute

There are various substitutes in the travel agency industry, such as "traveling friends circle" initiated by social networks and going to road trip. For consumers, travel agencies are only a choice, not a necessity, so the travel agency industry is facing the challenge of substitutes.

3. Purchasing power

Buyers here refer to travelers who choose travel agencies to provide travel services. Travel agencies should fully consider the differences between groups and individuals. Consumers with high concentration and large volume have relatively large room for price reduction, and vice versa.

4. Supplier strength

The suppliers to be considered in the development of travel agencies include not only various service providers, but also government tourism management departments and tourism resource developers. Even in practice, travel agencies will cooperate with commodity sellers in order to obtain higher commission profits. Of course, excessive prices are not encouraged.

5. Competitors

There are a large number of existing industries, but the level is uneven and the services provided are also different. Consumers have many choices according to their own budgets and needs. Therefore, we must comprehensively improve our competitiveness through service quality and service price in order to develop in the travel agency industry.