Before you decide to create a travel agency you should think about travel companies future. During recent 2 years the travel companies quantity in Germany has been falling down by 10% a year. Why has it happened? Of course the answer is obvious – the Internet. Travel agencies have to compete with on-line giants and tour operators which make their offers to the clients (customers) directly via the Internet . Therefore according to the 10-year forecast all the large market segments will go to the Internet and the majority of existing travel agencies will become bankrupt or will change the strategy. Who will leave and who will stay in the market? The companies whose business does not bring any extra value to the customers in comparison with the Internet offers will certainly leave the market:

• Mass tourism agencies (Turkey, Egypt): it will be easier for the client to choose a tour according to given criteria through the tour operator web-site or online agencies than drive in the traffic jam to the travel agency which offers the lowest price in the city.
• Agencies which specialize on Europe (Shengen zone) will exist until visas in these countries exist. After visas abolition they will become unnecessary
• The agencies dealing with business trips organization segment: airlines, railways, hotels, transfers. The online giants will be able to offer their corporate clients a lower transaction price.




Who will survive? Only the niche players:

• The agencies working in deluxe segment. Even in 10 years’ time it will be rather difficult to pay 50 000$ for the tour with a card through the Internet. More than that, clients will always look in the eyes of the person who takes their money.
• The agencies which have already occupied the place in MICE segment (conference, incentives, exhibitions, events). Creativity plays an important role here, it is impossible to automatize it.
• Adventure and extreme travel agencies. When the trip is connected with risk (when it is not just a minimal risk) the human relations become very valuable.
• The agencies which organize group turnkey programs. They will still beat the online players in the price-quality combination, as the latter will possibly be able to offer the same price but with less service list.

But even in the survived segments the competition will go on between the players which exist in the market today. If you still have the desire to create a travel agency but you are not ready to buy one of the existing players (a travel agency price depends on many factors, it starts with 10 000 $ and ends with several million $ price; I will tell you about the price formation principles for existing travel agencies in one of the next articles) it means that you are in love with this hazardous and complex business. You should read my next articles with START tag, where I am going to tell you how to become successful in this difficult but rewarding business in spite of the existing forecast.

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