How can the small to medium sized travel agents stay competitive in China's travel service sector?

Abstract

This research aims to extend knowledge pertaining to SMEs in general within the context of the tourism industry, and to establish a richer understanding relative to major factors affecting the development of SME travel agents in China. In a pilot research project, exploratory in‐depth interviews were conducted with owner‐managers of SME travel agencies. The findings indicate that being small in size and simple structure, short period of time in business operation, lack of management experience and market recognition have formed the major characteristics of these SMEs. Furthermore, they are facing an increasingly competitive environment and their sustainability is being threatened by a continuously decreasing market share and reducing profit levels. A total of nine in‐depth interviews were conducted and the results cannot be generalized to the whole travel agent sector in China. The research results also indicate that a series of internal and external factors are affecting the development of SME travel agents in China. Co‐operative and collaborative networking is recommended designed to strengthen SME travel agency business models. SME travel agents have a very short development history in China and very little is known about the nature of the SMEs. This study intends to provide enhanced understanding of the SMEs which can serve as the base for future study.