Essentially travel agencies are middlemen between airlines, cruise lines, hotels, car rental, and customers. Becoming a travel agent is relatively inexpensive with startup cost starting at $15000 to $60000. (Taylor) In the past Travel Agency used to be subsidiaries until about 1997 travel agencies started to become private and publicly trading companies. Travel agents use airline, hotel, and rental car company and package together deals for customer. This package created by the travel agencies includes information about the area based on the customer’s reason for travel.
Travel Agencies are facing new and various old threats that may push them into extinction. Internet search engines have made information more access able to people searching for travel. This information would usually be given to the potential customer from the travel agent. Another threat to travel agencies is the regulations and commission caps developed by Airlines. In 1995 Delta Airlines caped commission on fares over $500.00 to a maximum $50 per round trip ticket, then in 1997 United Airlines reduced commission from 10% to 8%. (Taylor) Travel Agencies face threats due to amounts of information available; airline regulations, seasonal traveling, and the Internet are threating the industry.
In 2010 Thomas Cook decided to merge with Co-operative Travel illustrating the expectations of joining two star companies and creating a larger company. Commission and small profit margins area are large reasons why the market for travel agencies is so competitive. To eliminate the competition travel agencies have been merging and acquiring smaller companies to demand a share of the market place. Agreeing to maintain each other’s branding Thomas Cook and Co-operative Tra...
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...fectively generate self planned trips. Buyers have plenty of strength in the Travel Industry because of how elastic the market is for Travel agencies. Opportunities from the Internet and the large amount of agencies leave bargaining and more opportunities for the customer to find the price they would be willing to accept.
For the Auto repair industry to be attractive the sector of focus would have to fall in between the specialized vehicle repair. Furthermore I don’t believe the Travel Agency industry will be a better alternative due to the seasonality and advancement of technology from the Internet and information that will sway travelers from using agencies. This case gave insight of the challenges the travel agencies faced in the 1990’s; whether to continue traditional style, or whether to merger to cut cost, and how to implement the website into your business.
By targeting business travelers, we were able to make more profits. Despite the availability of close substitute (competitor), business travelers remained as our major customers and thus boost our profits.
The airline industry not only transports passengers across the country and world but it also moves cargo from location to location. The largest segment for the airlines is general commercial passengers and business travelers. In 2004, there were 15 major airlines with 12 of those being mainly passenger carriers, the remaining three being cargo carriers. In addition to the large airlines (Delta, United, American, Southwest, Northwest), there are numerous low-cost regional carriers that have tapped into the larger carriers’ customer base. These smaller companies generally fly from smaller airports and serve a smaller amount of destination cities. Calling them a no-frills air carrier would not be far from the truth. Their goal is to move customers f...
Mason, K. J. (2001). "Marketing low-cost airline services to business travellers." Journal of Air Transport Management 7(2): 103-109.
As Frontier approached its 10th year of operation, Frontier officials realized an image shift was in order. The airline had established a reputation for friendly and reliable service, and reasonable airfares, mainly appealing to leisure travelers. But they reali...
Innovation division builds up an official site which empowers clients to book a room from anyplace on the planet. Also, for extra administration, its site empowers to make a demand for the airplane terminal get and more by chance to visit with one of the administrator on the site. In the globally focused environment of today, InterContinental meeting has turned out to be one of the world's driving lodging networks. One of the key achievement variables was the expansion in the use of innovation. These days, innovation adopts an imperative part in picking up consumer loyalty and tends to the requirements of the majority of their customers (King,
Despite the growth in the market, Qantas International’s market share has been falling over the past 10years, from 34% in FY02 to 16% in FY13. The entry of Virgin Australia in 2000 in part explains this, however Virgin’s growth also coincided with the demise of Ansett in 2001 “… Virgin Blue will initially increase capacity on existing routes while evaluating what c...
This website links to a report on the increasing number of travel agents within the past number of years.
Airline and travel industry profitability has been strapped by a series of events starting with a recession in business travel after the dotcom bust, followed by 9/11, the SARS epidemic, the Iraq wars, rising aviation turbine fuel prices, and the challenge from low-cost carriers. (Narayan Pandit, 2005) The fallout from rising fuel prices has been so extreme that any efficiency gains that airlines attempted to make could not make up for structural problems where labor costs remained high and low cost competition had continued to drive down yields or average fares at leading hub airports. In the last decade, US airlines alone had a yearly average of net losses of $9.1 billion (Coombs, 2011).
The Two forces currently affecting the cruise line industry are the economic and political forces. These two forces represent threats to the company and the industry because in 2009 the economy of the use was in a downturn and sales went down for that year. The global recession significantly impacted the financial performance of travel companies worldwide. Carnival suffered significant loss. Reduced travel demand as a consequence of the recessionary economy by 13%. As the consumer’s discretionary spending capacity declines, the demand for Carnival’s cruise services would also decline affecting the revenue growth as well.
1. Issues 2. American Airlines’ objectives 3. The airline industry 4. Market 5. Consumer needs 6. Brand image 7. Distribution system 8. Pricing 9. Marketing related strategies 10. Assumptions and risks
Airlines are still a very important part of our world's economy. In fact, the world would not function without them. People from every country use airplanes. An airline company has to be able to handle different cultures, ethnic groups, and financial groups. They also need to be able to handle the growth of passengers for the coming years. Mike Beirne says that U.S. Department of Transportation statistics suggest that international passenger traffic may actually increase. (Brandweek 1999) When you look at all of these factors, you can see that the coming years are going to be a role coaster for the airline industry. The airlines company that suite the majority of these people will get the bulk of the business. Because of this there are going to be many changes in the airline industry. The airline business is going to have a marketing frenzy. We can expect every company to make changes to their current planes. The reason that they are going to make changes is that they will want more of the business. If a company does not change, they will be left behind and eventually be put out of business. In this paper, I will show you different marketing techniques that will win over travelers.
Within the airline industry currently the airlines can be divided into low cost airlines and full service airlines. The low cost airlines targets customers that are seeking no frills connectivity between cities at low ticket prices. The full service airlines provide several add-ons like free meals, on plane entertainment, and communication facilities. The target market for full service airlines are customers who are willing to spend extra for the services that the airlines provides.
When people travel to a destination, they sure have some motivation to motivate them to make the decision. ‘Motivation’ is the key term that will make the tourist to consider the reason to travel around. During the decision making process, people will consider some of the reasons before they confirm travel to a destination. The research that has conducted in The Netherland found out a remarkably high propensity to travel, 70% of the populations are taking one holiday per year and 24% was taking two holidays per year for holiday. Some of the people will affect their decision making by looking at destination image or some of the impact advertising. On the internet, business people will use image and advertising to attract tourist to travel to the destination by using image that they edit before. This is part of the marketing to promote their country to tourist. For family traveler, they will consider the distance and transportation travel to the destination. When go for travel, tourist will bring the whole family to travel. Then, they will consider old people who travel long journey are very hard for them. If one of the family members are senior citizen, they need to consider their healthy. Some of the senior citizen cannot take long journey, such as they have sickness. Bring children go for holiday also need to be consider. Some of the children will afraid of the highest in the plane, so they will feel uncomfortable. There is plenty of reason need to consider before making any decision to travel. For understanding tourist motivation and decision making is for two main reason, planning consideration and economic consideration. (Page & Connell, 2009) Before the tourist travel to a destination, they need to think about culture, climat...
One perspective of the traveler comes from survey results published by the National Business Traveler Association in late 1997, which represents corporate travel managers and travel service providers. The survey results indicate that record airfare increases have significantly impacted corporate travel programs. The increased airfare resulted in a significant reduction in corporate travel as well as an increase in advanced bookings for business travel, which both must equate to a monetary loss for the airlines. The survey results also mention that the higher airfares will prompt corporations to take drastic countermeasures, such as reducing the amount of corporate travel by up to 50% and redirecting business to low fare carriers. This clearly indicates the dissatisfaction with airfare increases.
1.2 Problem Formulation In the problem formulation part of my report I would describe the overall situation of the U.K Tourism industry. The service concept of “Simply Travel” will give us information about the services provided by the company. I will find out about the customers, competitors of the company. I will find out what political, economical, social and technological factors affecting the company and its demand situation.