What are the drawbacks of travel agencies? Thank you for your help!

Since 1978, China's tourism industry has been rapid development, as an important part of the tourism industry, travel agencies also from the development of the early oligopoly of the industry has developed into a monopoly of the competitive industry, the industry scale has been basically formed. However, as many scholars and industry insiders have noted, along with the process of structural change in China's travel agency market, the development of China's travel agency industry has gradually entered into a difficult situation, and the current travel agency business system has revealed 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 towards the accession to the World Trade Organization, including the General Agreement on Trade in Services (GATS), determines that China's travel agency industry will eventually face the challenge of the development of China's travel agency by the entry of foreign travel agencies. This paper attempts to analyze the characteristics of China's travel agency industry and the current operating system of the system, puts forward China's travel agency operating system adjustment of the target mode, so that China's travel agency industry to prepare for rainy days, and more effectively meet the challenges and participate in international competition. First, China's travel agency industry business system analysis

China's travel agency industry after more than a decade of development, has formed a certain scale, and in the industry regulations, industry systems and market mechanisms under the dual role of the formation of its own characteristics: from the structure of the categories of China's travel agency industry [1] to see the three types of society overwhelmingly; from the structure of the scale of China's travel agency industry, the small-scale travel agencies account for the absolute majority; From the point of view of geographic distribution, China's travel agencies in the country's distribution is basically reasonable; industry profits decline year by year, China's travel agency industry is gradually becoming a low-profit industry.

China's travel agency industry, the current operating system is the result of industry policies and regulations, the traditional economic system and the current market mechanism, although this system to some extent the rationality of its existence, but in terms of China's travel agency industry development practices and trends, the biggest drawback is the existence of the following series of problems and deterioration:

(1) large travel agencies have not Realize economies of scale, the advantages of its scale can not be played.

Large travel agencies in the operation of tourism product development, procurement of tourism services, tourism market expansion, tourism reception, as well as capital, information, talent and risk resistance and other aspects of the advantages, so it is easy to realize economies of scale, and in China's travel agency industry, the scale of large travel agencies is not obvious, and the advantages are far from being given full play to, which is mainly manifested in the following aspects: 1) China's Tourism in recent years has been maintaining a good momentum of development, the market continues to expand, tourism revenue, especially international tourism revenue is growing rapidly. In this case, the business development of some large travel agencies is slow, in the face of many new business opportunities in the competition, but they are in the market to protect the market or helpless in the plight of declining market share. ② large travel agencies failed to play its due role in the tourism market, that is, failed to suppress excessive competition in the market, failed to play a role in guiding and stabilizing the market, resulting in the chaos of the market disorder has become a plague on the development of China's travel agency industry and caused the waste of travel agency resources of the persistent problem, the large agencies themselves have not been able to avoid the negative effects of this market chaos. ③ In the internal management of travel agencies, a prominent phenomenon is that some large companies generally implement departmental contracting or disguised departmental contracting, strengthening departmental rights and interests, so that some of the large travel agencies have actually become a number of relatively independent of the business of the collection of small travel agencies, in this pattern, of course, the large travel agencies can not play the advantages of the formation of economies of scale.

(2) Small and medium-sized travel agencies lack a clear market positioning, the development can be described as difficult.

On the overall situation of China's small and medium-sized travel agencies, characterized by a limited number of reception and low profit level. In terms of the number of reception, in recent years, many of China's small travel agencies in the development of hopeless and can barely support the situation. Since January 1995, the National Tourism Administration in the travel agency industry since the implementation of travel agency quality deposit system, many small travel agencies overwhelmed, have withdrawn from the industry. This phenomenon reflects, on the one hand, the economic strength and operating conditions of many small travel agencies and, on the other hand, to a certain extent, the owners' rational expectations of the industry and their own future development. In terms of profitability, many small and medium-sized travel agencies in China, which mainly operate domestic tourism business, are mostly second- and third-class agencies. According to the 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, while the average profit margin of the numerous Type III travel agencies dropped to 4.24% in 1995. This information reflects only pre-tax profits, if the income tax is deducted, the net profit left by these travel agencies is even more minimal.

The coexistence of limited reception and low profitability fully illustrates the current difficult situation of small and medium-sized travel agencies. The reasons for this result are of course multi-faceted, and from the travel agency's own factors, the vast majority of small and medium-sized travel agencies, human, financial and material resources are limited, but its business activities are involved in the development of product design and development of various aspects of the tourism reception. This kind of multi-link operation will inevitably result in the lack of depth of each operation. Shallow product development directly affects its attractiveness to tourists; the lack of promotional efforts to make many domestic tourists lack of understanding of the travel agency's services, the use of travel agencies to obtain affordable prices and other conveniences half-believe, and ultimately make the domestic travelers to the travel agency's utilization rate is low, the market scope of the narrow; reception of the poor is to create or strengthen the public's negative impression of the travel agency, reducing the number of repeat customers and other sources of customers. Returning customers and other sources of customers. Travel agencies in this vicious circle of survival, inevitably difficult.

(3) The travel agency industry vicious price competition prevails, the market order is chaotic.

The national tourism authorities in 1985 on the classification of travel agencies and travel agency business scope of the provisions of the category, its original intention may be to play a role in regulating the market and ensure product quality through this form of division of labor, and in the subsequent development of China's travel agency industry, due to the proportion of one or two types of society is out of proportion resulting in the second type of society's business is clearly insufficient to lead to the survival of many of the second type of society in order to survive. As a result, many Type II agencies, in order to survive, violated state regulations by operating beyond their scope and directly soliciting customers overseas. During this period, the lack of law enforcement by the competent state authorities has led to the rapid spread of this phenomenon, and the practice of some Type 1 agencies of making petty profits and earning ill-gotten gains by issuing visa notifications on behalf of Type 2 travel agencies has undoubtedly contributed to this phenomenon, which ultimately has led to the fact that many Type 3 agencies have also begun to engage in the business of outreach and international tourism reception. In addition, the emergence and popularity of this phenomenon undoubtedly also contains the travel agency industry in China to the horizontal division of labor as the basis for a variety of franchises as the characteristics of the travel agency artificial market division of labor mode of denial. 1996 October the State Council promulgated the "travel agency management regulations", China's travel agency management system has carried out a series of major adjustments, but only in terms of adjustments to the category of travel agencies, we may be able to say to some extent that the travel agency management system in China is not a new one. To a certain extent, we can perhaps say that this is only a "headache, treating the headache" approach, that is, just canceled once on China's travel agency market order to interfere with the largest two types of society, and then according to the remaining two types of travel agencies business division of labor renamed international travel agencies and domestic travel agencies, the level of the basis of division of labor and franchising The basis of horizontal division of labor and the characteristics of franchising have not changed, and its future operation is likely to repeat the historical mistakes. In this view, the artificial market division of labor model has not been and is difficult to be accepted by the industry, some kind of effective natural division of labor system in the industry is difficult to form, coupled with the limited binding power of the few trade organizations and their management authority in the various problems encountered, the current phenomenon of market confusion is also inevitable.

A prominent manifestation of the chaos in the travel agency market is the vicious price competition between travel agencies based on cut-price competition. Price cutting competition is the industry market mechanism is immature, at the same time, the industry lacks effective norms within the guidelines of the concentration of reflection, it makes the participants greatly injured, non-participants more difficult to operate. The result of the competition will not stimulate the improvement of product quality, but will lead to quality neglect, with no intention to ensure quality or inability to ensure quality, so that travel agencies are involved in another form of vicious circle.

In addition to the above several problems directly related to China's current travel agency business system, the existence of many other problems in the industry is also very much linked to the current business system. Such as the duplication of travel agency products, travel agency promotional capacity, especially overseas promotional capacity is weak and the overall reception capacity of the travel agency is low. Among them, the duplication and similarity of travel agency products is a long-standing outstanding problem in China's travel agency industry. Travel agency products due to the lack of such as trademarks, patents, such as entry restrictions [2], and there are not too many technical barriers to be retained and monopoly, so that some travel agencies have the ability to develop a certain ability to meet market demand for new products, many small and medium-sized travel agencies will be a rush, competing for imitation or participation in the business, which largely weakened the strength of the travel agency to the depth of development and promotion of products, and some travel agencies lack the necessary promotional capacity, especially overseas promotional capacity is weak, and the overall reception capacity is low. This largely undermines the strength of the travel agency to the depth of the development and promotion of product enthusiasm, and some of the lack of the necessary hardware equipment, but also does not have to ensure the quality of reception through the "software" basis of the existence of small and medium-sized travel agencies will inevitably reduce the overall reception of the travel agency's power.