Over the past two months, tourism industry conferences have been held non-stop. In addition to the booming development of the tourism sector, fierce market competition is also a key reason why travel agency executives are actively participating. This year, the business strategies of the tourism market have undergone tremendous changes, with the main shift being that OTAs, backed by substantial capital, are investing in acquisitions, launching aggressive marketing campaigns, and attracting large numbers of users—squeezing the survival space of traditional travel agencies. Traditional agencies are facing significant challenges, and pessimists suggest that a second cold winter for the tourism industry may be approaching.
What path should the future of the travel agency industry take? How can it upgrade and enhance competitiveness? These are questions many traditional travel agency managers are currently contemplating. Recently, reporters interviewed several travel agency executives, who shared their views on upgrading traditional travel agencies.
Focus on solving the “last mile” issues faced by tourists
When analyzing the current tourism market, Zhong Hui, President of Environment Travel, noted that the overall industry is still somewhat impetuous, especially in the online travel segment. With capital support, innovation in marketing methods to attract traffic has become the most fiercely competitive area for online travel companies. In this environment, traditional travel agencies should focus more on service and product innovation, striving to solve the “last mile” issues encountered by tourists. This is the core strength of traditional agencies—just as online companies can compete through capital-driven marketing, they cannot find experienced tour guides with 30 years of outbound travel expertise.
In terms of specific measures, on one hand, traditional travel agencies should actively align with resource providers, such as investing in scenic spots, hotels, and chartered flights. On the other hand, they should maintain their quality standards—OTAs cannot promise service or quality because they cannot control downstream resources, but traditional agencies can. Additionally, there is the approach of integration: traditional travel agencies can also become partners with internet companies. Any mobile or online platform can serve as another sales channel for traditional agency products.
Embrace New Technologies and Combine Online with Offline
Jack Ma’s roadshow speech in New York on September 10 conveyed a resolute vision: “Yesterday you ignored me, today I’ll make you look up to me. Today you boss me around, tomorrow you’ll come begging to see me. Isn’t that a nice feeling? This isn’t fear-mongering. Friends in business, it’s not too late to start e-commerce today. If you wait until everyone else is doing it, what will you have to compete with?” The e-commerce giant Alibaba is preparing for its listing in New York, inevitably drawing comparisons to the various listings and financings of tourism e-commerce giants in recent years. E-commerce represents a future trend in business operations.
Zhou Hua, manager of Guangzhou Youth Travel Service, analyzed the trend of e-commerce, stating that OTAs are not an independent business model. He believes their model ultimately traces back to traditional travel agencies, with the addition of a platform and another channel—that is, using mobile technology to quickly deliver travel products to consumers’ phones and computers, eliminating the need for consumers to visit physical stores for consultation.
Now, many OTAs have moved from online to offline, establishing physical stores. A major obstacle hindering their business development is that customers not only want to hear pitches but also insist on signing contracts face-to-face—they lack a physical presence. Traditional travel agencies already have physical offices, so their main focus now should be to enhance their online presence, turning weaknesses into strengths. This approach will be easier than internet companies transitioning from online to physical offices.
How can this be done now? Manager Zhou said: “Many traditional travel agencies are now partnering with platforms like Xinxin Travel Network to open their own online stores or independent websites. There are currently 1,600 travel agencies operating in Guangzhou, and nearly 800 have already integrated with the internet—this is a major trend. I suggest that agencies evaluate themselves: if they lack the capability to build their own websites, they should definitely collaborate with established online players. Everyone should avoid an exclusionary mindset to maintain dual-channel competitiveness.”
According to reporters, although the impact of online travel companies has caused anxiety among many traditional travel agencies, insights from tourism-developed countries such as the United States, Western Europe, and Japan show that agencies providing concrete services still hold the advantage. There is a distinction between simple products and complex ones—basic offerings like air tickets and hotel bookings are better suited for online platforms, while complex services still require traditional agencies. Or to put it further, mass-market products may lean online in the future, but more themed and in-depth travel experiences remain a strength of traditional travel agencies.
As long as traditional travel agencies focus on developing their “offline” products and actively embrace “online” technologies, there is no need to “fear” the arrival of the e-commerce storm.