Travel And Tourism Industry Of Pakistan Tourism Essay Example

Travel worldwide can be divided into three categories, including business travel which involves employees from companies traveling for various purposes such as training and business development.

The popularity of leisure travel in Pakistan includes visiting relatives abroad or going to different states for entertainment. In particular, the spiritual section has gained attention with people embarking on spiritual pilgrimages like Hajj, Umrah, and Ziarat. Karachi boasts several travel management companies that cater to all three sections, while some specialize in serving the corporate sector. Nowadays, travel agencies go beyond simply providing tickets; they strive to create a comprehensive experience by offering various other services. These industry leaders offer a diverse range of travel products and services to meet clients' daily, seasonal, and corporate needs. The industry now encompasses more than just traditional ticketing – it also includes packages (domestic and international), visa facilitation, car and camper rentals, cruise packages spanning the Pacific and Atlantic oceans, meeting planning services for incentives, conventions and exhibitions (MICE), rail packages, and even call centers.

Travel experts are now operating in various cities in Pakistan and abroad, with some even establishing around-the-clock offices to cater to clients' needs 24/7. The global travel market expansion has enabled travel agencies in Pakistan, particularly in Karachi, to offer online ticketing and payment solutions for corporate accounts worldwide. In addition, local call centers in Karachi manage international travel agency accounts due to cheap labor availability and resulting cost savings. Despite political and economic instability hindering growth, the travel industry in Pakistan is actively exploring opportunities for progress.
Research Objectives and Scope
The research will concentrate on the Corporate, Leisure, and Religious travel sectors as they represent the main areas

of operation within the Travel industry.

The multitudes in Pakistan are still not comfortable with the idea of e-ticketing and are in the process of adapting to paperless tickets. As a result, many consumers still prefer the services of Travel Management Companies. These companies help our consumers plan their itineraries and offer loyalty programs with certain agencies. In Karachi, Travel Management Companies offer various packages for corporate, leisure, and spiritual travel. Some companies even specialize in specific sectors. The increasing competition and influx of Travel Management Companies in Karachi make it necessary to analyze their marketing mix and current practices. This analysis is crucial in order to differentiate their services, retain existing clients, and attract new ones.

Travelers who prioritize the task of finding and booking travel services often place emphasis on the company that can offer them the most services at the best possible rates. To understand the preferences and criteria that consumers use when selecting a travel management company, we will include this as a research area in our thesis and gather evidence related to this choice. We will also investigate the factors that contribute to the success of industry participants and conduct a comparative analysis of their offerings and packages. This research will specifically focus on Karachi, Pakistan, due to time constraints and logistical considerations. All interviews and surveys with consumers and travel management companies will be conducted exclusively in Karachi.

Problem Definition and Research Questions

Worldwide travel management companies have been thriving for over two decades.

The increase in travel agency bookings has surpassed the growth in airline traffic during the first half of 2010. While in 2009, there

was an increase in online bookings as travelers prioritized cost savings. (Jones, 2010) This trend is also observed in Pakistan, where there is a rise in the number of travel management companies. The rise is attributed to travelers relying on these companies to plan their trips in a cost-effective and convenient manner.

In today's competitive environment, travel direction companies are facing pressure from mega-agencies, online travel companies, and regional participants. This is particularly challenging due to increasing competition and uncertain economic conditions. The internet has eliminated distance barriers, making information easily accessible with just a click. Consequently, travel direction companies are striving to offer the best options for business, leisure, and spiritual travel.

In the UK, business travel transactions processed by members of the Guild of Travel Management Companies experienced a 12% increase in the first half of 2010 (GTMC, 2010). Leisure travel has also seen growth after the recession and is expected to be more profitable than corporate travel (World Travel Market, 2010). Despite this growth, there is limited research on Pakistan's travel industry. Our thesis aims to examine the factors contributing to the success of established travel companies in Pakistan by focusing on their different segments of travel services.

In order to gain a comprehensive understanding of the industry's success factor, we will analyze the services provided by these companies. The research methodology that will be utilized consists of two stages: primary and secondary. This research will incorporate both qualitative and quantitative methods, with a primary focus on collecting primary data. In the initial stage, we will identify the leading travel management companies by considering their number of clients and other key international success factors.

Once the

top 5 participants are selected, the second stage will commence, in which we will assess client perception of travel agents and their packages through questionnaires. Secondary research will be conducted to explore the various packages and services offered by travel management agencies. A comparative analysis will be conducted on different travel management companies based on the services they provide. Sampling for the study will be carried out using quota sampling.

The top 5 travel direction bureaus will be selected from a pool of 20 bureaus based on the number of clients they cater for.

Restrictions of the Research

The survey is limited to Karachi, so it may not accurately reflect the services offered by travel direction companies throughout the country. The experiences of the 5 main travel agents in Karachi may not represent the entire market. The lack of publicly traded travel sector companies makes it difficult to obtain reliable details, so information provided by the bureaus must be trusted. To ensure unbiased research, reputable studies and data from authorities with relevant facts and expert opinions will be used to support our reasoning.

An Introduction to Travel Management Companies

Heathrow International Travel defines travel direction as meeting the needs and expectations of travelers, whether individuals or part of a group.

According to the travel industry dictionary, a travel agent is an individual who sells travel products on a commission basis or meets specific qualifications. These qualifications can vary depending on usage or established standards. Laurie Lico Albanese, an instructor and author at Vagner College in the U.S., defines a

travel agent as someone fulfilling various roles such as being a travel advisor, tour organizer, small business executive, or travel guide.

Travel agents have the opportunity to obtain certification through the Institute of Certified Travel Agents (ICTA). This certification necessitates at least 18 months of experience as an agent and successful completion of a 12-course program. Additionally, there are other certifications available for travel agents to enhance their expertise, with IATA being the most renowned.

The certifications acquired by travel agents hold significant value for global travel management companies. They assist travelers in selecting reputable companies for their travel requirements. Certification from IATA is obligatory for corporate, religious, and leisure travel management agencies as it confirms their validity worldwide.

Each agent is provided with a unique code to track their whereabouts across the universe. The different memberships include: United Federation of Travel Agents Association (UFTAA), which represents national travel agents' associations in multiple countries and holds advisory status with the United Nations. UFTAA's membership includes major airlines, hotels, tourism boards, shipping companies, car rental companies, and other operators in the industry. It is essential for corporate travel departments.World Tourism Organization (WTO), not to be confused with the World Trade Organization, acts as a global forum for tourism policy matters. Headquartered in Madrid and authorized by the United Nations, its goal is to maximize positive impacts such as job creation and infrastructure development while minimizing negative social or environmental effects. Representatives from Africa, Americas, East Asia and Pacific, Europe and Middle East, and South Asia collaborate on specific projects focusing on leisure travel. Established in 1990 as an exclusive private sector lobbying group,World Travel and Tourism Council (WTTC) serves

as an influential entity.The text also mentions Pacific Asia Travels Association (PATA) being comprised of Chief Executives from various travel-related companies whose main objective is to raise awareness about the economic impact of the Travel and Tourism industry.IAPA stands for International Airline Passenger Association but no further information about it is given in this text fragment.
Founded in 1951 and based in Bangkok, PATA is a dominant force in the global Travel and Tourism industry. With approximately 100 members including touristry bodies, airlines, sail lines, companies, organizations, and individuals spread across 78 Chapters worldwide, PATA provides a range of services such as research, marketing services, product development, educational seminars, and workshops to help its members stay competitive.

On the other hand, IAPA represents frequent flyers globally with a membership of over 400,000. Its main focus lies in advocating for safety and health concerns associated with flying. Notably, IAPA has taken initiatives to enhance aircraft cabin air quality.

Insight (2009) mentions that the membership also includes discounts on hotels worldwide, savings on car rentals, comprehensive travel insurance, and other benefits. It is mandatory for all travel agencies in Pakistan to abide by local regulations and laws set by the Ministry of Tourism and Culture at the federal level and the Department of Tourist Services at the provincial level. Without a valid license issued by DTS, a travel agency cannot function legally. The issuance of a license depends on fulfilling various requirements such as having qualified staff, financially stable management, and an appropriate location for public transactions. Once a final inspection is conducted, a bank guarantee is provided to DTS before granting the operational license.

The license is valid for one

year from the date of issue and must be renewed after the expiration date. These are separate from the certifications they need to register for International travel.

Specialization of Travel Management Companies

Travel agencies have been considered as critical information, planning and booking providers for a large number of travelers (Duke & Persia 1993; Mihalik, Uysal & Pan 1995). The travel products provided by travel management companies include air ticketing, visa facilitation, global hotel reservations, global car rental reservations, travel insurance, airport meet and assist service, rail, bus tickets and MICE (Meeting, incentives, conventions, and exhibitions) (Oasis Travels, 2010). These products vary from one travel management company to another depending on their expertise and the market they operate in. They are further classified according to the sectors in which they specialize such as corporate, personal, event leisure or school travel.

Corporate Travel

The corporate travel industry is a highly valuable part of the travel and tourism industry. Not only does it continue to grow, but it also involves higher spending by business travel clients compared to the retail sector. Travel agencies are more inclined towards serving the corporate sector for various reasons. One major reason is that companies often organize corporate travel for events such as conferences, meetings, exhibitions, trade shows, incentive travel, corporate events, and outdoor events. While the revenue generated from each of these occasions varies, according to a tourism department in the UK, the main source of revenue in the corporate sector comes from company personnel traveling for meetings and conferences. It is estimated that in the year 2003, meeting and conference-related travel alone accounted for approximately ?7 billion. (Weaver, Han,

2008) In 2003, conferences and meetings were worth over ?7 billion.

This portion of the sector encompasses gross revenue conferences, management meetings, annual general meetings, training classes, business presentations, and product launches. The market for exhibitions and trade shows is valued at more than 2 billion per year. Trade exhibitions cater to buyers and sellers in particular industries. Incentive travel is utilized by organizations as a means to motivate their staff, primarily in industries with high profit margins like automotive and financial services. Incentive travel serves as a tool for organizations to motivate their staff.

Corporate events, which include staff and client amusement, are most commonly centered around sporting occasions. There is a close connection between the corporate events section and the contract providing industry, with a market worth ranging from 700 million to 1 billion per year (Bized, 2008).

Religious Travel

Religious travel has evolved to encompass a wide range of travel experiences. While it previously referred solely to travel for the purpose of spiritual pilgrimages, today it mainly focuses on the concept of pilgrimage.

Although spiritual travel remains an integral part of journeying for many, it no longer holds the exclusive significance it once did. The booming spiritual tourism industry is now valued at $18 billion annually, with destinations such as the Hajj pilgrimage, Palestine, Jordan, Iran, and other Middle Eastern countries attracting a significant number of spiritual travelers. With over 300 million global travelers each year, the market for faith-based travel and hospitality offers destination management organizations, wholesalers, suppliers, and travel agents unprecedented opportunities for business growth. Today, spiritual travel and hospitality primarily refers to traveling to a religious destination. This traditional form of travel owes its

success to the major religions of the world and is commonly associated with the term "pilgrimage."

Traveling to a spiritual gathering is a common practice among people of different religions and beliefs for the purpose of spiritual enlightenment and celebrations. Additionally, some people travel with a mission or humanitarian focus, while others travel with the intent of building a sense of community. Short-term mission trips typically range from seven to 14 days, and volunteer holidays are a related form of missional travel (World Religious Travel Association, 2010). The Western Reserve Transit Authority specialist travel suppliers strive to create exceptional travel experiences in order to capitalize on the three billion individuals worldwide who identify with the Middle East as their religious and spiritual origin. "Religious tourism is recognized as a highly resilient market in the travel industry," stated Wright, who will be leading a seminar on this topic.

The Kingdom receives over six million worshippers yearly, making it a popular destination for pilgrimages. The spiritual tourism industry in Saudi Arabia alone generates an estimated $7 billion annually. With the market expecting a 20% growth in the coming years, various businesses in the travel industry are already adapting their products to cater to the spiritual market. "Pilgrimages are no longer the sole driving force behind the spiritual market. People of faith are increasingly seeking high-quality travel experiences in all sectors that drive the industry," said Wright. Mark Walsh Click the link for more information. As the Group Exhibition Director of Reed Travel Exhibitions, which organizes the Arabian Travel Market, taking place from May 5 - 8, 2009, at the Dubai International Convention & Exhibition Centre, Walsh emphasized the

need to analyze strong tourism revenue streams to ensure the industry survives the current economic downturn.

Our industry is changing and tour operators and travel companies must explore different business avenues to boost profits in these challenging times. The spiritual tourism market presents itself as one such opportunity and continues to be highly relevant for operations based in the Middle East. These insightful discussion sessions provide exhibitors and visitors alike with a better understanding of the business potential that is open to them. According to Wright, Jordan and Palestine are significant markets experiencing immense growth.

Ninety-five percent of tourism in Palestine is driven by religion, while Jordan aims to increase tourism revenue to $2.4 billion per year by 2010, which is more than 60 percent higher than the income generated in 2007. Iraq is also becoming a significant player in the tourism sector. Areas with religious importance, like Najaf - home to the sacred shrine of the son-in-law of Prophet Mohammad - already attract eight million pilgrims annually, and a new airport will further increase inbound travel.

Leisure Travel

Leisure travel can be defined as travel undertaken for pleasure and personal reasons. The World Tourism Organization has identified the top 10 most visited countries from 2006 to 2009 based on the number of international travelers.

When compared to 2006, Ukraine entered the top 10 lists, surpassing Russia, Austria and Mexico, and in 2008, surpassed Germany. In 2008, the U.S. displaced Spain from the 2nd topographic point. Most of the top visited states continue to be on the European continent, followed by a turning figure of Asian states. In 2009, Malaysia made it into the top 10 most visited states list.

Malaysia secured the 9th place, merely below Turkey and Germany. In 2008, Malaysia was in the 11th place. Both Turkey and Germany climbed one rank in reachings, busying 7th and 8th places severally, while France continued to take the ranks in footings of tourer reachings. ( UNWTO, 2009 ) .

The United States leads in leisure travel earnings, making around $94.2 billion in 2009. Spain follows with $53.2 billion, while France and Italy earn around $48.2 billion and $40.1 billion respectively. Other top destinations include China, Germany, the United Kingdom, Australia, Turkey, and Austria. It is notable that most income for travel management companies in the leisure sector comes from travelers visiting Europe, as seven out of the top ten most visited countries are located on the European Continent (WTO, 2009).

Key Performance Indicators for the Travel Industry

Overview of Key Performance Indicators

According to the KPI Library, Key Performance Indicators (KPIs) are measures of business performance. They can also be referred to as business or performance metrics, measures, ratios, or simply performance indicators. These indicators can vary depending on the company and industry. For Travel Management Companies, key performance indicators can be determined by examining factors such as price wars, safety and security challenges, traveler needs, and availability of information. This may also include supply chain information, inventory information, package tracking, flight/travel activities, and passenger details with preferences.

Integration of cardinal information and emphasis on client loyalty also plays an important role in the success of transportation and travel industry. (Gala, 2009)

Consumer Preference of Travel Management Companies Abroad

According to a survey by the Hong Kong Consumer Council (1998), Travel agents in Hong Kong have faced

difficult times because of increasing customer demands and internal competition in the industry. Complaints against travel agencies had increased by 12.4% for the year 1996/97, compared with the previous year. The purpose of the study was to assess customers' expectations and perceptions of service provided by travel agents, and to explore how the service factors derived from the factor analysis were related to overall customer satisfaction.

According to Vincent C.S. Heung from the Department of Hotel and Tourism Management at the Hong Kong Polytechnic University, the survey revealed that clients' perceptions of service quality were based on the availability of All Inclusive Package Tours. A total of 183 Hong Kong consumers participated in the survey and evaluated 29 factors that could influence their choice of travel agency for these bundled tours. The results showed that "agency reputation" was the most important factor, followed by "word-of-mouth communication" and "staff attitude" (Heung, 2000). In Karachi, where there are 245 travel management companies operating, competition is fierce and agency reputation may play a significant role in traveler preference, although this has yet to be confirmed.

The reputation of travel agents and the effectiveness of their marketing communication tools have been studied to understand the success and failure of travel direction companies. In the past, consumers were not able to distinguish between travel agencies. They did not respond differently to travel advertisements for various destinations, whether they were common tourist spots or uncommon ones, except for business trips. Consumers prioritized information expectations over the physical requirements of travel agent facilities. (Kendall and Booms, 1989) However, evidence suggests that consumers are capable of distinguishing and choosing between travel agents.

The market for Online

Travel Agents is important to study because air travel is the biggest source of retail electronic commerce revenue (Combes and Patel 1997). In Pakistan, consumers are knowledgeable and rely on the internet to book flights, accommodations, transportation, tours, and other related products. However, they still visit travel agencies for reservations. We want to investigate whether travelers prefer using travel management companies for their travel bookings or if they rely on advertisements and brochures as criteria.

Impact of the Internet on the Operations of Travel Management Companies

Travel agencies now have their own websites, so physically visiting them is not a major factor when choosing a travel management operator.

According to a study published in the Journal of Hospitality and Tourism Management (2006), the factors influencing the choice of online travel agent can be categorized as security, ease of use, finding low prices, useful and relevant content, design and presentation of the website, speed of the website, ability to book all travel services in one transaction, booking flexibility, and viewing option. However, there are criticisms surrounding the selection of online travel agencies compared to individual airline websites, both of which offer the same service. The latter benefits from lower costs due to the absence of travel agent commissions. The Keynote Customer Experience (CE) Rankings for the Airline Industry provide a comprehensive competitive benchmarking of leading travel and airline websites through syndicated research studies. These rankings are based on research conducted with 2,000 customers who evaluated and interacted with 16 leading travel and airline websites. The Keynote survey identified a significant gap between online travel agencies and individual airline websites, demonstrating that the advantage lies in a strong online customer

experience.

The survey also found a direct correlation between customer experience performance and conversion of website visitors into clients. "Greater choice is a significant advantage for online travel agencies. However, these agencies are also improving the overall online experience for customers, which is a key factor in their success compared to airline sites. The airlines are simply not fully utilizing their loyalty programs and direct connections to the customer," said Dr. Bonny Brown, Director of Research and Public Services for Keynote.

(2005). However, the main obstacle preventing consumers from booking travel online was the perceived lack of a secure payment method. Other significant barriers included travelers' lack of confidence in technology and a preference for personal service and human interaction (Lang, 2000). Both National Airlines and International Airlines, operating in Pakistan, have their own travel management companies and websites, which also compete with local travel management companies. Access to the internet has become an essential requirement even in Pakistan, and travel management companies have created their websites for easy access to travel information. However, the impact of these websites on travelers in Karachi will be assessed.

The Travel Management Companies in Pakistan: An Overview

The usage of cyberspace or e-commerce varies across different industries in Pakistan. Currently, there are 761 licensed travel experts operating in the four zones of Pakistan. These experts specialize in various fields, such as leisure circuit operations, wholesale fining, religious tour operation, and visa facilitation ( TAAP, 2009 ). Over the years, the travel industry has grown, and the major players have expanded from a single city office to multiple offices within cities and across different cities. This expansion has

enabled them to serve larger corporate markets, providing 24/7 dial service instead of limited office hours.

The promotion in cyberspace has helped them propel with the assortment of offerings at the clients' door measure. For example, from manual tickets to electronic tickets being exchanged from different parts of the state in a individual chink. Among all the metropoliss, Karachi has been the hub for air hoses as well.