1. MARKET RESEARCH ON THE FUTURE OF
BRICK AND MORTAR LEISURE OUTBOUND
HOLIDAY AGENCIES
Presented By
Sudarshan S
PGDMB16-154
2. Contents
1. About PACTO
2. Objectives of
the project
3. Research and
methodology
4. Results from
various cities
5. Summary and
way forward
3. 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.
4. 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.
5. 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.
6. 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)
7. 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
8. 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
9. Coimbatore
City : Coimbatore
Number of leisure outbound agencies
covered
14
Number of responses received in person 9
No of agencies who refused to share details 5
Number of subagents 1
Average years of experience in the business 17 – 18 years
Overall Average turnover of these agencies 5.5 to 6 crores
Number 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 Excel
Average customer repetition in the travel
agencies in the city 60%
Increase or Decrease in the customers over
the
Last 2 years
An average increase of 16%
10. Bangalore
City: Bangalore
Number of leisure outbound agencies
covered
20
Number of responses received in person 13
No of agencies who refused to share details 7
Number of subagents 0
Average years of experience in the business 22.5
Overall Average turnover of these agencies 7-7.5 Crores
Number of agencies part of travel
associations like IATA, IATO, TAFI, IAAI,
UFTAA, PATA
7
Other Travel Associations MTO,GSA,PH&RA, LATO
Number of agencies that use technology like
Amadeus, Galileo, Abacus or Sabre to
manage travel profile
8
Other technology or method used to manage
travel profile
Offline methods, RS Software, direct contact
with the customer, TMS, via.com,
Number of agencies that use Tally as
accounting package 10
Other general accounting packages RS Software, Infozyl, SITCFA,
Average customer repetition in the travel
agencies in the city 64.5%
Increase or Decrease in the customers over
the
Last 2 years
Average increase of 20%
11. Chennai
City: Chennai
Number of leisure outbound agencies covered 43
Number of responses received in person 39
No of agencies who refused to share details 4
Number of subagents 3
Average years of experience in the business
22-23 years
Overall Average turnover of these agencies
6.2 to 7 crores
Number 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,
Number of agencies that use technology like
Amadeus, Galileo, Abacus or Sabre to manage
travel profile
31
Other technology or method used to manage
travel profile
Other travel agents, Google AdWords, through
internet and apps, make my trip.com, riya
connect, hotelbeds, rooms xml, restlive,
via.com, travelboutique
Number of agencies that use Tally as
accounting package 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%
Increase or Decrease in the customers over
the
Last 2 years
14.58% increase (approximate with the
acquired data)
12. Pondicherry
City: Pondicherry
Number of leisure outbound agencies
covered
10
Number of responses received in person 9
No of agencies who refused to share details 1
Number of subagents 0
Average years of experience in the business 13-14 years
Overall Average turnover of these agencies 5-6 crores
Number of agencies part of travel
associations like IATA, IATO, TAFI, IAAI,
UFTAA, PATA
7
Other Travel Associations None
Number of agencies that use technology like
Amadeus, Galileo, Abacus or Sabre to
manage travel profile
7
Other technology or method used to manage
travel profile
Via.com, TBO
Number of agencies that use Tally as
accounting package 7
Other general accounting packages ITQ, ERP
Average customer repetition in the travel
agencies in the city 63.05%
Increase or Decrease in the customers over
the
Last 2 years
28.2%
13. Kochi
City : Kochi
Number of leisure outbound agencies
covered
24
Number of responses received in person 24
No of agencies who refused to share details 0
Number of subagents 1
Average years of experience in the business 15 to 16 years
Overall Average turnover of these agencies 6.5 crores to 7.5 crores
Number 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
Number of agencies that use technology like
Amadeus, Galileo, Abacus or Sabre to
manage travel profile
19
Other technology or method used to
manage travel profile
Offline by maintaining direct connection with
travel agencies, Via.com, Akbar Travels
Number of agencies that use Tally as
accounting package 13
Other general accounting packages Travel masters given by Puma, travel soft,
outsourcing, 8 agencies use Excel
Average customer repetition in the travel
agencies in the city 57.82%
Average Increase or Decrease in the
customers over the
Last 2 years
Increased by 18.9%
14. Thiruvananthapuram
City : Thiruvananthapuram
Number of leisure outbound agencies
covered 5
Number of responses received in person 5
No of agencies who refused to share details 0
Number of subagents 1
Average years of experience in the business 20 years
Overall Average turnover of these agencies 9 Crores Approx.
Number of agencies part of travel
associations like IATA, IATO, TAFI, IAAI,
UFTAA, PATA
3
Other Travel Associations None
Number of agencies that use technology like
Amadeus, Galileo, Abacus or Sabre to
manage travel profile
4
Other technology or method used to manage
travel profile
Offline methods and managed by Head Office
Number of agencies that use Tally as
accounting package 5
Other general accounting packages Excel
Average customer repetition in the travel
agencies in the city 70%
Increase or Decrease in the customers over
the
Last 2 years
Average increase of 15%
15. Salem
City : Salem
Number of leisure outbound agencies
covered
5
Number of responses received in person 4
No of agencies who refused to share details 0
Number of subagents 1
Average years of experience in the business 10.5 years
Overall Average turnover of these agencies 4 years
Number of agencies part of travel
associations like IATA, IATO, TAFI, IAAI,
UFTAA, PATA
1
Other Travel Associations None
Number of agencies that use technology
like Amadeus, Galileo, Abacus or Sabre to
manage travel profile
2
Other technology or method used to
manage travel profile
Tie up Riya travel’s portal
Number of agencies that use Tally as
accounting package
2
Other general accounting packages Riya’s portal and own software
Average customer repetition in the travel
agencies in the city
52.5%
Increase or Decrease in the customers over
the
Last 2 years
42.5%
16. Madurai
City : Madurai
Number of leisure outbound agencies
covered
6
Number of responses received in person 4
No of agencies who refused to share details 2
Number of subagents 0
Average years of experience in the business 11.5
Overall Average turnover of these agencies 3 to 3.5 crores
Number of agencies part of travel
associations like IATA, IATO, TAFI, IAAI,
UFTAA, PATA
1
Other Travel Associations Govt Of India
Number of agencies that use technology like
Amadeus, Galileo, Abacus or Sabre to
manage travel profile
3
Other technology or method used to manage
travel profile
Via.com
Number of agencies that use Tally as
accounting package 3
Other general accounting packages Manually done
Average customer repetition in the travel
agencies in the city 55%
Increase or Decrease in the customers over
the
Last 2 years
No specific data
17. 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.
18. 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.
