Online booking – The travel agent’s nemesis

Receipts of travel agencies amounted to MOP6.50 billion (US$813.82 million) last year, down 10.6 per cent year-on-year, according to the Travel Agencies Survey 2015 released yesterday by the Statistics and Census Service (DSEC).
While receipts from Package Tours increased by 7.6 per cent to MOP1.96 billion, receipts from Passenger Transport Ticketing and Room Reservations decreased 17.9 per cent to MOP1.90 billion and 31.6 per cent to MOP1.09 billion, respectively
DSEC indicates this is due to the growing popularity of online booking for hotel rooms, air tickets, etc., thus resulting in a year-on-year decline in receipts for the industry.
The official data also indicates that for the whole year of 2015 there were a total of 250 travel agencies operating in 2015, an increase of 13 compared to 2014. The number of persons engaged in the sector rose by 343 year-on-year to 4,545, of whom drivers accounted for 30.9 per cent, at 1,404.
In general, Gross Value Added – measuring the sector’s contribution to the economy – amounted to MOP1 billion, down 4.8 per cent year-on-year. The Gross Surplus of travel agencies decreased by 28.5 per cent year-on-year to MOP297 million, while the Gross Surplus Ratio dropped by 1.1 percentage points to 4.6 per cent. Meanwhile, Gross Fixed Capital Formation decreased by 35.1 per cent to MOP157 million owing to a decrease in the acquisition of shops.
Booking business down
In terms of different scales of travel agencies defined by the number of persons engaged, the receipts of large travel agencies with 50 or more persons primarily derived from Package Tours and Rental of Coaches with Driver, up by 20.1 per cent year-on-year to MOP723 million and 8.6 per cent to MOP645 million, respectively.
However, as receipts from Room Reservations and Passenger Transport Ticketing dropped significantly by 30.2 per cent to MOP425 million) and 21.7 per cent to MOP211 million, receipts of this type of travel agency shrank by 4.9 per cent year-on-year to MOP2.42 billion.
By contrast, receipts of small travel agencies with less than 10 persons were generated primarily from Passenger Transport Ticketing of MOP692 million, up 26.5 per cent year-on-year.
Receipts of these travel agencies dropped slightly by 0.9 per cent to MOP1.25 billion due to the declines in receipts from Package Tours which amounted to MOP242 million and Room Reservations for an amount of MOP208 million.
Less expenditure
With regard to expenditure, local travel agencies spent MOP6.21 billion, down 9.5 per cent year-on-year. Cost in Purchase of Goods & Services and Commission Paid decreased by 13.9 per cent to MOP4.76 billion. This number also accounts for 76.7 per cent of total expenditure.
Nevertheless, Operating Expenses that amounted to MOP749 million and Compensation of Employees, which totalled MOP699 million, increased by 7.1 per cent and 10.8 per cent, respectively.
Expenditure of the large travel agencies employing 50 or more persons dropped 6.2 per cent year-on-year to MOP2.13 billion, of which Purchase of Goods & Services and Commission Paid, that accounted for 62.1 per cent of the total, shrank 14.9 per cent to MOP1.32 billion.
Expenditure of the small travel agencies – those with less than 10 persons – grew by 2.5 per cent year-on-year to MOP1.27 billion, with Purchase of Goods & Services and Commission Paid, accounting for 88.8 per cent of the total, increasing 2.7 per cent to MOP1.13 billion.