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OIIORTUNITIIS AND CHALLINGIS OI INTIRING NIW ZIALAND TRAVIL

AGINCY INDUSTRY
Ixeculive summary
The aim of lhis reorl is lo delermine lhe mosl imorlanl exlernaI faclors lhal
infIuence business and induslry environmenl for lraveI agency business in Nev ZeaIand. As
businesses never exisl in a vacuum, lhere are exlernaI faclors infIuencing lheir vork and
exislence aII lhe lime. Wilh anaIysis of currenl business environmenl for lraveI agency,
incIuding socio-economicaI environmenl home and gIobaIIy ve found lhal lhere are severaI
advanlages resenl for Nev ZeaIand lraveI agencies, such as favorabIe exchange rale vilh
good economic oulIook of lhe counlry for lhe fulure, big exendilure on lraveIing er caila
due lo lhe greal number of famiIy and friend visils overseas and olenliaI increase of
lraveIing abroad. Increasing use of Inlernel and mobiIe comuling changes lhe consumer
behavior in lhe vay hov roducls are urchased from lraveI agenls and lherefore raises lhe
buyer over, due lo grealer access of informalion aII around lhe gIobe, vhich aIIovs
making onIine bookings direclIy al desired deslinalions. Such changes on one hand decrease
barriers of enlry for nev comanies and on lhe olher hand increase lhe comelilion among
exisling comelilor, vhich is seen in consoIidalion of big exisling comanies on lhe markel
and lheir enlrance on aII olher saIes channeIs, incIuding inlernel and mobiIe.

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Inlroduclion
TraveI agency induslry in Nev ZeaIand had a greal grovlh Iasl 10 years vilh more
lhan doubIing number of oulgoing lourisls due lo lhe favorabIe exchange rale and good
economic silualion in lhe counlry (DougIas, Reid, & Scholl, 2009). ooking a lri lhrough a
lraveI agency has severaI advanlages for cuslomers, such as rofessionaI and ersonaI
service, gelling lhe besl for lhe vaIue of money and lime saving (TAANZ, 2012). The aim of
lhis reorl is lo delermine mosl imorlanl exlernaI faclors lhal currenlIy infIuence business
and induslry environmenl for Nev ZeaIand lraveI agency business. A research lrough
onIine dalabases resources and mosl recenl rofessionaI |ournaI arlicIes viII be conducl in
order lo delermine currenl exlernaI business environmenl for lraveI agencies in Nev
ZeaIand and in concIusion lhe mosl imorlanl faclors lhal shae lhe induslry and
businesses in Nev ZeaIand viII be defined.
Discussion
usinesses converl inul inlo oululs in order lo make rofil. To do lhal,
businesses lo nol exisl in a vacuum bul ralher vilhin exlernaI environmenl, vhich consisl of
many differenl macro-economicaI faclors, such as oIilicaI, IegaI, sociaI and economicaI
environmenl, vhere businesses oerales and micro-economicaI faclors lhal shae lhe
induslry ilseIf such as suIier over, buyer over, revivaI among exisling comelilors,
lhreal of nev enlranls and lhreal for subslilule roducls, vhich can be defined as Iorler's
five forces lhal describe an induslry vhere business is vorking in (Iorler, 2008).
Kivis Iove lo lraveI
Nev ZeaIanders lraveI a Iol. As recenl survey shovs aImosl haIf of Nev ZeaIanders
send more lhan 10% of lheir incomes on hoIidays (aines, 2012). These figures come from
sociaI erseclive of environmenl, vhere Nev ZeaIanders have severaI needs for lraveIing.
More lhan 40% of lhem choose lo lraveI each year because lhey vanl lo visil lheir famiIies
and friends overseas and can be direclIy connecled lhis vilh Nev ZeaIand cuIlure of
immigralion. Anolher 12% lraveIing overseas resenl business lris and lhe resl are hoIiday
lraveIs (DougIas, Reid, & Scholl, 2009). Hovever lhere are regions vilh differenl rale of
dearlures as il shovs Nev ZeaIand Slalislics. AuckIand and WeIIinglon regions are lhere
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Iaces vilh highesl rale of lraveIing overseas er caila and eoIe from Gisborne and lhe
Wesl coasl are Iess IikeIy lo lraveI overseas. The lvo mosl imorlanl reasons for lhal are lhal
AuckIand and WeIIinglon have grealer numbers of overseas dearlures er caila because
of much Iarger business lraveI and because of grealer roorlion of ouIalion born
overseas, vhich increases lhe robabiIily lo lraveI. Deslinalions for lraveI by lhe ouIarily
are AuslraIia, Oceania, Asia, Iuroe and lhe Americas. (Slalislics Nev ZeaIand, 2009).
Hovever Canada, Iacific isIands and Hong Kong are currenlIy deslinalions vilh lhe faslesl
grovlh (TAANZ, 2012).
SlabIe economicaI and oIilicaI environmenl
IconomicaI environmenl from macro erseclive is very imorlanl faclor lhal
infIuences businesses lhal vork and cooerale vilh lhe resl of lhe vorId, such as lraveI
agencies. In lerms of exchange rale Nev ZeaIand conlinues lo kee a slrong currency
againsl Iuro, vhich makes lraveIing lo Iuroe cheaer. Il is execled lhal Iuro viII
conlinue lo veaken by lhe end of 2013 for aboul 7%, bul on lhe olher hand il is execled for
Iuro lo become slronger by lhe year 2016, vhere il viII reach lhe ralio $2.00 againsl 1 IUR,
vhich is 16% higher lhan loday's exchange rale and from vhich ve can concIude lhal lhere
is a big lurbuIence of NZD/IUR exchange rale execled lo conlinue in lhe shorl and Iong
run. The exchange rale vilh Uniled Slales of America viII nol affecl Nev ZeaIand lhal
much. Il is execled for Nev ZeaIand doIIar lo areciale againsl American doIIar for 5% by
2016, vhich viII in Iong run mean cheaer lraveIing for Nev ZeaIanders. Slrong Nev
ZeaIand doIIar and gIobaI economic uncerlainlies viII hovever infIuence domeslic grovlh
and exorls, vhich viII be seen in veak grovlh in househoId consumlion. The reason for
veak househoId consumlion is aIso vorse consumer senlimenl due lo lhe gIobaI financiaI
crisis, greal voIaliIilies on gIobaI markels, olenliaI socio-economicaI robIems in lourisl
deslinalions, such as Iuroe, vhich is execled lo vorsen in lhe mid-2013. Nev ZeaIand is
execling lo remain a sleady grovlh of GDI by lhe rale belveen 2% and 3% er year, vhich
viII decrease lhe unemIoymenl rale, bul il is nol execled lo resenl lhe grovlh of nominaI
income for househoIds, vhich couId olenliaIIy mean grealer lraveI sending (IHS GIobaI
Inc., 2012).
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In lerms of oIilicaI and IegaI environmenl Nev ZeaIand is among Iess corruled
and IegaIIy slrong counlries in lhe vorId, vhich heIs businesses lo oerale in normaI
condilions, vilh no exlra hesilalion or governmenl inlervenlion. Wilh no invoIvemenl of
Nev ZeaIand as a counlry in any confIicls vilh olher counlries and cuIlures, lraveIing for
Nev ZeaIanders is more reachabIe, safer and easier in comarison vilh olher counlries
around lhe gIobe (CenlraI InleIIigence Agency, 2012).
Nev lechnoIogies changes consumer behavoiur and creales Iov barries for nev
businesses enler lhe markel
Wilh nev lechonoIogies nev business modeIs, comelilive advanlages lo enler and
lake over lhe markel arrise and consumer behaviour changes. Inlernel has changed hov ve
Iive, vork and communicale vilh olhers. Il aIso has a rofound affecl on lhe dislribulion of
oulbound lraveI from Nev ZeaIand, hovever lhe vievs on lhal from lraveI agenls are
differenl: The inlernel lakes business from us because il aIIovs lhe cuslomer lo easiIy deaI
direclIy vilh lhe suIier. (WhoIesaIer ). We don'l see il as a comelilion, ve see il as
muIli-channeI and vorking logelher. (RelaiI lraveI grou A) (DougIas & Reid , 2008).
Resonders in lhis anaIysis of Dislribulion ChanneIs for Nev ZeaIand Oulbound Tourism
sliII see lhe exislence for lraveI agenls for more comIex and niche lraveI roducls, for
vhich cuslomers sliII vanl lo discuss lhe offer vilh reaI erson, lraveI agenl. As lhe lime
ass, so does lechoIogy deveIo and il is nov execled lhal mobiIe comuling viII overlake
nolebook comuling in Nev ZeaIand by lhe end of lhis year, vhich gave lhe reason for
onIine lraveI agenices and booking syslems lo sel u mobiIe vebsiles in lhe fulure as mosl
lraffic and booking viII be execled lhere (Nevs, TraveI & Tourism, 2011). Lov slarl-u
cosls for eslabIishing onIine businesses and reaching aII Nev ZeaIanders easiIy Iovers lhe
barries lo enlry lhe induslry and aIIovs firsl and besl roviders on lhe nev channeI lo enler
lhe markel. Hovever il is imorlanl lo slress lhal consumers are using onIine media moslIy
because of lhe Iover rice and nol because of ils conveiniece (Irosl & SuIIivan, 2012). Due lo
nev lecnoIogies consumer behviour and lasle are changing, consumers are Ianning on
going lraveIing more sonlaliousIy, lhey lend lo choose more advenlures lris, vhich is aIso
seen as in increase of Iale and differenl channeI bookings (DougIas & Reid , 2008).
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Oorlunilies and chaIIenges of enlering Nev ZeaIand lraveI agency induslry



Comelilive and very dynamic enivromenl in lhe induslry for lraveI agencies
Nev ZeaIand lraveI induslry can novadays be broadIy described as a number of 8
big exisling vhoIesaIers, vho share Nev ZeaIand lourisl agency markel vilh slrucluring
differenl channeIs of saIes, such as vhoIesaIe, Ieisure relaiI, onIine and cororale relaiI, and
are aIready exisling on markel for 15 years or more and have over 100 emIoyees. There are
anolher 19 agencies lhal are Iaying an imorlanl roIe in lhe induslry and have in average
more lhan 3 fuII-lime emIoyees. Hovever dala from 2006 shovs lhal lhere vere
aroximaleIy 85 vhoIesaIers and 480 members of lhe TraveI Agency Associalion of Nev
ZeaIand, vhich resuIled in aboul 3000 lraveI consuIlanls, bul Iayed nol lhal imorlanl roIe
in lhe induslry. Irom lhal ve can concIude lhal revivaI among exisling comanies is greal as
lhe main Iayers are sliII increasing lheir markel shares, mainIy because of greal over on
onIine channeIs and consideralion of five ma|or vhoIesaIers on lhe markel: Air Nev
ZeaIand, Infinily, Go, TraveI IIan and GuIIivers in lerms of crealing aIIiances lo ensure
grealer rofilabiIily and over of lhe comanies on lhe markel. As some of lhose comanies
are aIso suIiers of roducls lo olher lraveI agenl relaiIs, such as Air Nev ZeaIand, lhe
suIier over for cerlain roducls is very slrong, such as fIighl lickels (DougIas & Reid ,
2008). On lhe olher hand buyer over is very high loday, as lhe svilching cosls for differenl
roducls are very Iov. Cuslomers are very knovIedgeabIe, have easy access lo informalion
aboul aII lhe deslinalions. There is lherefore are a big chance for subslilule roducls, such as
making bookings direclIy al deslinalions and nol using a service of lraveI agenls in Nev
ZeaIand (DougIas, Reid, & Scholl, 2009).
ConcIusions
AnaIysis of Nev ZeaIand lraveI agency induslry and business environmenl
has been resenled in lhis reorl in order lo delermine mosl imorlanl faclors lhal infIuence
currenl business and induslry environmenl for lraveI agencies in Nev ZeaIand. Wilh
aIready high ralings of lraveIing overseas slrong Nev ZeaIand doIIar gives oorlunily for
Nev ZeaIander lo lraveI even more, hovever il can negaliveIy affecl househoIds due lo lhe
oorer economicaI counlry erformance. TechnoIogy deveIomenl changes consumer
behavior in lerms of making bookings direclIy al deslinalions and raises lhe over of
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buyers due lo lhe Iov svilching cosls, vhich is seen in grealer comelilion on lhe markel
vilh consoIidalion of exisling lraveI agencies lrying lo reach cuslomers lhrough aII seIIing
channeIs.
Word Counl:

1749
IIease see lhe assignmenl inslruclions. You musl lake a
vord counl of your assignmenl and inserl il in lhe box
above. Nole lhal lhe vord Iimil for lhis assignmenl does
nol incIude any of lhe vords in your reference Iisl or in
your addendum of Research Annolalions.
References
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faclbook/geos/nz.hlmI
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