Internship Final Presentation - Copy

MARKET RESEARCH ON THE FUTURE OF BRICK AND MORTAR LEISURE OUTBOUND

HOLIDAY AGENCIES

Presented BySudarshan S

PGDMB16-154

Contents

1. About PACTO 2. Objectives of the project

3. Research and methodology

4. Results from various cities

5. Summary and way forward

About PACTO

• Advantage Asia Travel Partnership is a part of The Advantage Travel Partnership UK, which is operated for Asia by PACTO – Pricol Advantage Consortia for Tour Operations.

• Pricol Travel Pvt Ltd : started operation in India in August 2000 with a primary focus on corporate travel management. They currently operate in 11 Branches, with 10 branches in the prime south Indian states and 1 Branch in the capital City – Delhi and have employed 100 plus people.

• They employ unique tools like travel policy compliance, MIS reporting, aligning suppliers to the travel needs, standardization and process management for corporate travel.

• The Advantage Travel Partnership- UK’s largest independent travel agent partnership, the leisure and business travel agents who are part of the group are each independently owned, but as a collective they produce over £3bn of travel sales each year, making them experts in every aspect of the travel industry.

Objectives of the Project

Study about the business and

operations of 100 leisure outbound travel agencies.

Conduct a survey to understand the key

challenges for managing leisure travel business in the South

Indian market and how PACTO can contribute

in overcoming challenges.

Research and Methodology

• Since this project involves market research, the first step was to prepare a questionnaire.

• All the questions in the questionnaire were open ended as a response and an explanation was needed from the respective travel agents I visited.

• There were totally 22 questions. The questions covered all the aspects of business, operational and strategic competencies of the travel agencies. It was all a face to face survey with the agency owners or managers.

• The survey covered 8 cities in South India. The cities were Coimbatore, Bangalore, Chennai, Pondicherry, Kochi, Trivandrum, Salem and Madurai.

• Agents, who could not meet us due their prior commitments, were sent a mail of the questionnaire. Number of responses recorded in different cities varied.

• Once the details were collected, they were categorized as businesses that require help and can be registered under The Advantage Travel Partnership.

Terms and Technology • IATA – International Air Transport Association (between travel agents and airlines) 60000 IATA agents selling $220 billion to 260 IATA members.• TAAI – Travel Agents Association of India – 1951 – 12 agents• TAFI – Travel Agents Federation of India – to protect the industry from

unscrupulous agents• IATO – Indian Association of Tour Operators – 1500 members- 1982• PATA - Pacific Asia Travel Association – concentrated around Asia Pacific region –

97 governments and 27 international airlines• AMADEUS – IT & software services, developing software products for travel

industry• GALILEO - purely web based. No installation, no maintenance and no updates• ABACUS – pricing and ticketing, fully automated thus operating costs• SABRE – leading technology solutions provider to $8 trillion US travel industry. It

uses SaaS (Software as a Service)

Terms and Technology • FIT – Free Independent Traveller- or a small group less than 10. The travellers go

with a self booked itinerary.• GIT – Group Inclusive Tour – These tours are escorted by a tour guide.• MICE – Meetings Incentives Conferences and Exhibitions• DMC – Destination Management Company

Finance:• Fixed Costs – Fuel, Labour, Building Rent, Insurance, Marketing, Salaries• Variable Costs – The costs associated with taking passengers on tours

Marketing:• Cross Selling – Selling an additional product or service to an existing customer• Upselling – Providing to purchase related products or services

Results and Recommendations

S.No District Leisure Outbound Agencies

1 Coimbatore 9

2 Bangalore 13

3 Chennai 39

4 Pondicherry 9

5 Kochi 24

6 Trivandrum 5

7 Salem 4

8 Madurai 4

Total 107

Coimbatore City : Coimbatore

Number of leisure outbound agencies covered

14

Number of responses received in person 9No of agencies who refused to share details 5Number of subagents 1Average years of experience in the business 17 – 18 yearsOverall Average turnover of these agencies 5.5 to 6 croresNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

3

Other Travel Associations Thai, TAAC, Riya Travels, Travel Boutique online, Air Asia, Air Arabia and Etihad

Number of agencies that use technology like Amadeus, Galileo, Abacus or Sabre to manage travel profile

5

Other technology or method used to manage travel profile

Getting from consulates, own travel portal and own database

Number of agencies that use Tally as accounting package

3

Other general accounting packages World Track, Galileo, Finbook and ExcelAverage customer repetition in the travel agencies in the city

60%

Increase or Decrease in the customers over theLast 2 years

An average increase of 16%

Bangalore City: Bangalore


20

Number of responses received in person 13No of agencies who refused to share details 7Number of subagents 0Average years of experience in the business 22.5Overall Average turnover of these agencies 7-7.5 CroresNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

7

Other Travel Associations MTO,GSA,PH&RA, LATONumber of agencies that use technology like Amadeus, Galileo, Abacus or Sabre to manage travel profile

8


Offline methods, RS Software, direct contact with the customer, TMS, via.com,


10

Other general accounting packages RS Software, Infozyl, SITCFA,Average customer repetition in the travel agencies in the city

64.5%


Average increase of 20%

Chennai City: Chennai


43

Number of responses received in person 39

No of agencies who refused to share details 4

Number of subagents 3Average years of experience in the business

22-23 yearsOverall Average turnover of these agencies

6.2 to 7 croresNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

29

Other Travel Associations Other travel agents in India, airline association, SKAL,


31


Other travel agents, Google AdWords, through internet and apps, make my trip.com, riya connect, hotelbeds, rooms xml, restlive,

via.com, travelboutique


15

Other general accounting packages Anchinfotech.com, excel, wings, QuickBooks, Amadeus software package, oracle accounting,

ITQ financed by Galileo, E-Travel, Airwin, travelxs.in, Riya, Finac, CRS offered by

Amadeus, powersoft,

Average customer repetition in the travel agencies in the city

65.3%


14.58% increase (approximate with the

acquired data)

Pondicherry City: Pondicherry


10

Number of responses received in person 9No of agencies who refused to share details 1Number of subagents 0Average years of experience in the business 13-14 yearsOverall Average turnover of these agencies 5-6 croresNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

7

Other Travel Associations NoneNumber of agencies that use technology like Amadeus, Galileo, Abacus or Sabre to manage travel profile

7


Via.com, TBO


7

Other general accounting packages ITQ, ERPAverage customer repetition in the travel agencies in the city

63.05%


28.2%

Kochi City : Kochi


24

Number of responses received in person 24No of agencies who refused to share details 0Number of subagents 1Average years of experience in the business 15 to 16 yearsOverall Average turnover of these agencies 6.5 crores to 7.5 croresNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

16

Other Travel Associations Indian Airlines, Kerala Tourism, Australian tour specialist, Kerala Travel Mart, ASTA, Govt

Of India Tourism


19


Offline by maintaining direct connection with travel agencies, Via.com, Akbar Travels


13

Other general accounting packages

Travel masters given by Puma, travel soft,

outsourcing, 8 agencies use Excel


57.82%

Average Increase or Decrease in the customers over theLast 2 years

Increased by 18.9%

Thiruvananthapuram City : Thiruvananthapuram


5

Number of responses received in person 5No of agencies who refused to share details 0Number of subagents 1Average years of experience in the business 20 yearsOverall Average turnover of these agencies 9 Crores Approx.Number of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

3


4


Offline methods and managed by Head Office


5

Other general accounting packages ExcelAverage customer repetition in the travel agencies in the city

70%


Average increase of 15%

Salem City : Salem


5

Number of responses received in person 4No of agencies who refused to share details 0Number of subagents 1Average years of experience in the business 10.5 yearsOverall Average turnover of these agencies 4 yearsNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

1


2


Tie up Riya travel’s portal


2

Other general accounting packages Riya’s portal and own software


52.5%


42.5%

Madurai City : Madurai


6

Number of responses received in person 4No of agencies who refused to share details 2Number of subagents 0Average years of experience in the business 11.5Overall Average turnover of these agencies 3 to 3.5 croresNumber of agencies part of travel associations like IATA, IATO, TAFI, IAAI, UFTAA, PATA

1

Other Travel Associations Govt Of IndiaNumber of agencies that use technology like Amadeus, Galileo, Abacus or Sabre to manage travel profile

3


Via.com


3

Other general accounting packages Manually doneAverage customer repetition in the travel agencies in the city

55%


No specific data

Summary and Way forward

• Many travel agencies are not a part of IATA because they say that the discounts they get have reduced over the years. Also there are various licensing fees payable to IATA. Many upcoming agencies do not use Abacus, Sabre, Amadeus and Galileo as every click costs some amount.

• Most of the travel agencies are concentrating on the inbound tourism as tourism in India is booming under the Incredible India Program, but tie-ups with good corporates has ensured that they have a good business with the outbound tourism.

• The online portals causing discomfort to the brick and mortar travel agencies, which is the sole purpose of this research, is actually not that very serious.

• Majority of the agencies surveyed who had a loss in their business earlier, have used their trump card of giving the customer, personalized service and have understood the principle of ‘Customer Value’ to have the upper edge over the online portals.

Summary and Way forward

• 75 to 80 percent of the travel agencies are approachable and can be brought under the Advantage partnership.

• Tier 2 cities like Pondicherry, Coimbatore, Salem and Madurai have less number of quality leisure outbound travel agencies, but the ones that have been covered are a definite prospect with a sound business structure.

• Most of the agencies neither have a sound marketing strategy nor have a 5 year strategy for their business’ growth

• Most of them have the approach of Word Of Mouth as their marketing strategy, as their majority of the clients are from the corporate sector and ensuring them a good customer repetition percentage. But this has also backfired them as these clients visit them only during a particular season of a year. So the agency’s reach in the city is also very limited.

• Majority of the outbound travel in India is purely concentrated around the South East Asian Countries. The agencies have DMCs, agents and suppliers in most of these countries.

Thank YOU

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