Study On The Status And Development Of Travel Service Industry Organization In China

Since 1979, with the rapid growth of the Chinese tourism industry especially the inbound tourism, the number of China travel service has developed to nearly 20 thousand by the reform and opening-up of China Travel Service, China International Travel Service and China Youth Travel Agency. China travel service industry has taken shape. In recently, as the leader in the travel tourism industry, it has made significant progress: the number of enterprises, total assets, the number of reception, the total revenue has increased year by year. From 2002 to 2007,the immigration outreach views from 9,342,200 to 13,730,400 million, total revenue increased to 71.063 billion yuan from 1639.30 billion; total revenue increased to 71.063 billion yuan from 1639.30 billion. The vertical specialization appeared on China travel service, setting up the division system of travel wholesalers and travel agents, and there have been some travel service specialized in business travel, exhibition tour, and so on. Although the travel service industry has developed rapidly, but some problems still exist: the entire industry's total profits and profit margins decreased year by year. During the 20th century, the travel service industry average profit margin dropped from 30% in 1980's to about 10% in early 1990's.The current average profit margin of the travel service industry is less than 1%.Its situation about "scattered, small, weak, bad" has not fundamentally improved; "Zero fare", "negative-fare" situation still exists. Following the further advance in opening-up the Chinese tourism market, China travel service industry faces enormous opportunities and challenges. Marketing competition is more vehemence for the reason of the entry and existence of foreign investments enterprises. Facing the challenge, some China travel service under suitable conditions have already taken the initiative embarked on the path of multinational operations.As the important theoretical basis for the industry study, industrial organization theory take manufacturing industry and monopoly market as the research object. With the rapid development of service industry, study of industrial organization turn to tertiary industry.Using the theory of industry organization, through analyzing the status and development of the market structure, market behavior and market performance of China travel service, it has great significance for formulate scientific and rational strategic plan in order to improve the market structure, standardize the market competition, improve the operating performance. This paper has carried on the detailed elaboration from following several aspects to research the status and development of travel service industryorganization in China.Chapter one reviews the origin and the development of the Theory of Industrial Organization, and draw lessons from "Market Structure-Market Conduct-Market Performance"(SCP) paradigm and the theory about industrial organization policy. Traditional industrial organization theory represented by the Harvard School and the Chicago School. Harvard School created SCP(market structure - market behavior - market performance),to study specific business-to-business market, monopoly and competition and the resulting corporate behavior and changes in market performance. With the relaxation of antitrust policy, the Chicago school pay more attention to the impact of the market performance, refuting the "concentration - margin" hypothesis of Harvard School and revised the definition of barriers to entry. The modern theory of industrial organization economics, including the new system of "transaction costs" concept, the theory of contestable market and game theory. Chinese scholars sthdied domestic travel agencies from all angles.The second part study on the status of China travel service industry organization through the following four aspects. First of all, from the market structure: Although the number of travel agencies has increased year by year, but compared with developed countries, China travel service industry has a low market concentration obviously. Product differentiation can meet the needs of different consumer preferences. It is an important market strategy for service enterprises. But because of the intangible nature of services and products, the products is the same quality turns the phenomenon seriously; lack of core brands, product duplication, lack of add-on products. Enter and withdrars barriers decide the market scale and competition state. Although Chinese travel service have access barriers about laws and regulations, funding, personnel, etc. But because of diseconomy of scale, product homogeneity, no monopolistic to resources and technology, low sunk costs, the entry barrier is low. On the other hand, because of the asset specificity, the lack of an effective exit mechanism, travel service industry has very high withdrars barriers. Secondly, from the market conduct: Account of intangibility, inseparability, heterogeneity and perishability of travel service products; information asymmetry between travel agencies and consumers, travel service often simply take the price competition as the main means of competition. Malignant price war led to declining corporate profits, low quality of service and customer loss. Travel service's promotion mainly focused on media advertising, a single mode. Integration behavior can realize the internal trade-off instead of market transaction, and helps to reduce the transaction costs. It is the only way of China travel service industry to become bigger and stronger. Scale economy can be achieved through horizontal merger, to break the protection of place. Through vertical integration can achieve the extension of the status and role of industrial chain. Third, from the market performance: Although the number of travel agency and total revenue increased year by year, the profit margin is very low. The overall Chinese travel service industry has entered the low-profit status. The pace of technological progress should be sped up. Information technology and Internet usage has not yet spread to the whole industry. Finally, from the industrial organization policy: The Chinese travel agencies pay more attention to industrial policy to control the market behavior. Through a series of administrative regulations and industry standards to ensure orderly market competition, and control market structure on the control of market entry.The third part, study on the trend of China travel service industry from two aspects (collectivization and information).The establishment of normative, with the assets of the travel agency contact tie groups, exert the advantages of diversification of the Chinese domestic and foreign travel industry to adapt to the inevitable changes in market environment trends; is the basic element to achieve a vertical division of labor; is the competitive strategic to enhance tourism enterprises competitive advantage. The development of information not only in line with the characteristics of the tourism market, is also in line with its own characteristics. Travel agency of the future group on the development of far-reaching impact, not only facilitate information transfer between the travel agency group, reduce costs, improve efficiency, but also can make use of the group's strong financial and the introduction of advanced technologies in human capital and accelerating the development of their own information.The fourth part is concerning a few suggestions to improve the performance of China travel service industry. First, legislate the "Travel Low" and "Travel Agency Industry Law", forming systems, well-organized and comprehensive system of industrial policies, to avoid travel content management and content scattered conflict between the situation in the laws and regulations, to provide environment for development more standard and equitable. The second, the Chinese government should fulfill the relative promises which promised in joining WTO, join moderate protection to market opening promotion, attract foreign companies to enter the market, promote the producing factor mobility nationally, dispel the barrier between different departments and local protectionism; not only to "Please come in" but also "go out" to promote the development of Chinese travel agency in the international tourism market. Third, speed up construction of travel service industry associations. It is necessary to establish its independent position, so as to let the association represent the general interests of the whole industry. And the ethical autonomy of trade will finally be realized through each corporation's moral construction finally. Fourth, carry out the strategy of training, attract, develop and retain talents, sharpen their competitive edge.