Succession challenges, OTAs’ growing influence are just some of the issues facing HK agencies.
The lack of successors and growing threat of OTAs are some of the biggest threats facing travel agencies in Hong Kong today, forcing a number of them to be bought out by larger companies or risk closure.
Most recently, Swire Travel, a member of the Swire Group for almost seven decades, was taken over by the KWG Group, a Hong Kong-listed, Guangzhou-based property development giant.
Other established operators such as Concorde Travel and Associated Tours were acquired late last year by Jebsen Travel and Gray Line Tours respectively.
Concorde Travel’s managing director, Graham Elsom, explained why he sold his 39-year-old operation: “The present-day business environment is very tough due to the Internet. However, there will always be room for good travel consultants, hence the entire team has moved to Jebsen. The name Concorde Travel will unfortunately disappear.”
Other family-run businesses are unable to find successors, as is the case for Uni Asia Tours and Associated Tours.
Uni Asia Tours’ managing director, David Luk, said: “My company started to diversify years ago and now caters for Muslims from South-east Asia and incentive traffic. I don’t know how long I will hang in there, but we’re better off than operators that just focus on single products.”
Differing generational expectations also pose a challenge to the industry’s quest for new blood, observed Gray Line Tours’ managing director, Michael Wu. “The industry faces an ageing problem and the younger generation feels that (an agent’s job) involves too much hands-on management and very long hours. Only a handful of brands like us have seen the second generation take up management roles,” he said.
“To keep the business sustainable, I want to buy time by acquiring expert agents like Associated Tours rather than spend time on training. We kept Associated’s six full-time staff while venturing into new business areas,” he added.
Managing director of Blue Sky Travel, Angela Ng, blames the closures and sell-offs on online travel trends as the Internet jeopardises agency businesses.
She pointed out: “Big agents survive by diversifying services and products, while small operators are easy to sustain. It’s the medium-size operators sandwiched in between that suffer.
“Clients nowadays are no longer willing to pay for service if they can handle it online. I honestly don’t know what our future holds,” Ng lamented.
