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Could the tide be changing? Travel agency management

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  1. Introduction.
  2. Traditional travel agency business model and immediate impact of e-commerce boom.
  3. Long term impact of e-commerce boom and future outlook.
  4. Conclusion.

Travel agencies play an important role within the UK travel and tourism industry. They are the retail arm of the industry selling holiday products and travel services to the public. Yet travel industry analysts have been predicting the death of the high street travel agent due to the ever changing nature of distribution channels. The Association of British Travel Agents figures do suggest that 1,400 agencies have closed in the past decade. But could the tide be changing? Tourism is one of the largest employers and major industry in the expanding market of overseas travel and its annual level is predicted to grow to an estimated 1.6 billion by 2020 (Swarbrook, J. and Horner, S. 2006). However the recent proliferation of the e-commerce business model has challenged traditional adage that ?location, location, location? is critical to commercial success (Chaffey, D. 2006); effectively undermining the traditional travel agency distribution model, forcing travel agencies to re-develop and reformulate competitive strategies to sustain growth (Zhou, Z. 2003).

[...] Conclusion The above analysis demonstrates that whilst declining profits and mergers driven by necessity clearly point towards the reduction in importance of the high street travel agent, it is far too premature to signal the death knell of the agency within the tourism business. The Internet has clearly been a central factor in opening the market and the e-commerce business model has reduced the monopoly of the travel agency as central intermediary in the distribution chain to consumer. Moreover, the evolution of travel demands and consumer habits has moved away from the bread and butter income of the package holiday, yet statistics still demonstrate a significant marketplace wanting personal service offline. [...]

[...] 2003) Whilst, the Association of British Travel Agents (ABTA) figures indicate a significant reduction in high street travel agencies (, this analysis will evaluate whether such losses can be addressed by exploiting opportunities via the e-commerce business model and whether the tide is in fact changing to enable further openings in the market. It will be necessary to undertake a comparative analysis of the pre e-commerce business model in context of the new business model in context of new methods of distribution; and further consider whether the new growth online can sustain the losses to the high street trader in recent years. [...]

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