Summary of Key Points
This summer, the domestic travel agency industry has suffered a major setback: traditional group tour bookings have plummeted by 30%-50% across the board (with some regions experiencing a 50% decline), leading to a systemic collapse. The reasons behind this include a doubling in the number of travel agencies on the supply side, resulting in increased homogenization and competitive pressure; on the demand side, consumers have shifted towards independent travel, significantly reducing the customer base. Additionally, government authorities and travel platforms have joined forces to crack down on low-price tours and illegal practices, accelerating the elimination of smaller and medium-sized agencies. In the future, only three types of travel agencies will survive: those with exclusive resources, strong content IP, or advanced technical capabilities. The industry is undergoing a thorough process of clearing out outdated practices and inefficiencies.
I. Dramatic Drop in Bookings: How Severe Has the Summer Disaster Been for Travel Agencies?
This summer has been even more challenging for travel agencies than after the pandemic:
- Case in Jiangsu, Zhejiang, and Shanghai: Traditional group tour bookings dropped by 50%, leaving industry insiders stunned by the data.
- Situation in Xinjiang: Local travel agencies experienced a 15%-25% decline in bookings, with many facing a 50% reduction; despite a continuous influx of tourists, there were very few inquiries this year.
- Industry Research Confirms: Over 90% of respondents reported a significant drop in bookings, with the decline ranging from 30% to 50%, and many small and medium-sized agencies are on the brink of collapse.
II. The Collapse Was Predictable: A Double Blow from Excess Supply and Sharp Demand Reduction
The current situation for travel agencies is not sudden but a result of long-standing issues:
- Supply Side: The number of travel agencies has surged, leading to severe homogenization. From 2019 to 2025, the number of agencies increased from 38,000 to 70,000 (almost doubling), with most of the new ones being small and medium-sized. These agencies lack the ability to develop their own products and rely on price competition, leading to a decline in service quality.
- Demand Side: Independent travel has become the norm, with only three types of customers remaining: elderly travelers, families with children, and business travelers. However, these groups have complex needs that few small agencies can meet effectively. The remaining 80% of agencies are competing for a 20% market share through low-price tactics, pushing the industry towards collapse.
III. Regulatory Actions and Platform Restrictions: Cutting Off the Path to Survival at Low Prices
Authorities and travel platforms have taken steps to eliminate the viability of small and medium-sized agencies:
- Government Enforcement: The Ministry of Culture and Tourism has exposed cases of forced shopping, unlicensed guides, and unauthorized tour transfers (e.g., 14 cases were disclosed in the fourth batch of 2026), resulting in penalties for several agencies.
- Platform Actions: TikTok removed 18,000 low-price travel listings in the second quarter and banned over 8,000 illegal live streaming accounts. Small agencies that previously relied on low-price tactics (such as hidden sales) are now left with no viable options.
IV. A Major Reorganization Is Ahead: Only Three Types of Agencies Will Survive
The industry collapse is actually a process of clearing out outdated models. In the future, only three types of travel agencies will thrive:
1. Resource-Based: Those with exclusive resources (such as hotels, attractions, or transportation services) that are difficult for others to access.
2. Content-Oriented: Agencies that employ popular guides and create high-quality content (e.g., through travel videos to attract and retain customers).
3. Technology-Driven: Those that standardize and scale customized tours, reducing service costs.
Industry experts predict that within two years, agencies focusing on standardized group tours or relying on price differences and commissions will either be acquired or disappear.
V. The Collapse Is Not a Bad Thing: It Clears Out Inefficiencies for a Rebirth
Although the industry is currently in turmoil, it is a necessary step for improvement:
- Elimination of Weak Players: Over 2,000 travel agencies have closed in the first four months of this year, and with many more operating nominally only, the total may exceed 6,000 by the end of the year—about one in seven agencies will cease operations.
- End of Low-Price Competition: With the elimination of low-price practices, surviving agencies can focus on providing higher-quality services. Industry insiders urge them to improve their products and services if they want the industry to recover.
The collapse of the travel agency industry is essentially a market-driven purge of substandard providers. For consumers, this will result in more standardized and quality travel experiences. For those in the industry, it means either upgrading their offerings or facing elimination; there is no middle ground.