Summary of Key Points
Although tourists are becoming more capable of planning their own trips (using platforms like REDnote for travel guides, booking flights and accommodations through OTAs, and using AI to generate itineraries), the number of travel agencies nationwide has increased from 64,600 in 2024 to 70,300 by the end of 2025. However, the traditional business model of travel agencies no longer works as effectively as before: in the past, these agencies could capture market growth by offering a comprehensive range of services (information, accommodation booking, visa processing, and local transportation arrangements). Nowadays, these tasks have been decentralized by technology and platforms, making it difficult for individual agencies to achieve growth on their own. To continue growing, travel agencies need to focus on addressing the complex needs that tourists cannot handle on their own and build long-term client relationships.
1. Why Do More Travel Agencies Exist, Yet It's Harder for Individual Ones to Make Money?
In the past, when tourists traveled abroad or to unfamiliar cities for the first time, they lacked knowledge about visa procedures and resources, so they relied on travel agencies to handle everything. Market growth (e.g., an increase in the number of travelers) would naturally flow towards travel agencies. But now things have changed: tourists can use platforms like REDnote for travel guides, TikTok to find destinations, and OTAs to compare prices and book accommodations. They can even use AI to generate itineraries for international trips. Although they may spend more on their travels, they often avoid traditional travel agencies altogether.
The overall travel industry is still growing (3.463 billion trips in the first half of 2026), but the path that leads customers to travel agencies has been disrupted. Agencies see a large market and try to launch new routes and attract traffic, yet they fail to realize that the question is no longer about whether there is demand, but why customers should choose them. Therefore, even though the number of agencies has increased, it remains challenging for individual ones to achieve growth.
2. The "Comprehensive Value" of Travel Agencies Has Been Fragmented
Travel agencies used to offer a complete range of services, from advising on where to go to booking flights and accommodations, handling visas, and arranging local transportation, as well as dealing with unexpected issues (such as flight cancellations). This bundled service made it necessary for tourists to use travel agencies.
However, this value has been broken down: information is now available on platforms like REDnote/TikTok, standard transactions (flights and accommodations) are handled by OTAs/hotel websites, and basic itinerary planning is done by AI. Travel agencies have not been completely replaced, but their core value has been dispersed across different platforms. Services that can be easily standardized (such as booking flights) are less profitable for agencies because tourists can handle them on their own. Why would they pay more?
3. To Grow, Agencies Need to Focus on Complex Needs That Tourists Can't Handle Themselves
Simple self-guided trips (e.g., a weekend trip to Shanghai) can be managed by tourists on their own, but more complex needs require specialized assistance:
- Families with three generations: balancing the rest needs of the elderly, the entertainment of children, and the travel experiences of parents;
- High-net-worth families going on international trips: seeking private, exclusive experiences (e.g., visits to private museums) and safety guarantees;
- Corporate incentive trips: coordinating flights, accommodations, meetings, and activities, as well as dealing with unexpected issues (e.g., employee illnesses).
The value in these situations lies not in simply providing information or booking services but in making informed decisions, coordinating various aspects, and managing risks. Travel agencies have an opportunity to help reduce these costs for customers:
- Decision-making cost: Too much information can make it difficult to choose; a professional advisor can provide the best options.
- Organization cost: Coordinating multiple destinations and suppliers (e.g., booking 10 hotels and arranging 5 local transportation services simultaneously).
- Risk cost: Being able to quickly respond to unexpected events (e.g., flight cancellations) and adjust itineraries.
Platforms are good at reducing transaction costs, but only travel agencies can handle these complex needs.
4. The Future of Travel Agencies: Three Different Paths
The more than 70,000 travel agencies will not all operate in the same way. In the future, they will be categorized based on their capabilities:
1. Complex Resource Organizers: Acting as the "chief coordinators" for travel, connecting airlines, hotels, local services, and visas to handle large groups, cross-regional trips, and high-risk events (e.g., corporate incentive trips).
2. Vertical Experts: Focusing on a specific niche (e.g., specialized hiking tours in Japan or health and wellness travel for the elderly), using their expertise to make them the go-to choice for customers.
3. Long-Term Travel Consultants: Acting as "family travel managers," continuously understanding the needs of individual families (e.g., annual study trips for children, health and wellness trips for the elderly), and building trust and loyalty through consistent service.
Regardless of the path chosen, agencies need to move away from providing standard services that are easily replaceable and focus on developing unique, specialized capabilities.
5. The Final Competitive Factor: Trust
In the past, tourists used travel agencies because they didn't know how to plan their trips; now, they use them because they trust them for important and complex journeys (e.g., anniversary trips or children's first international study trips). This trust is based on the belief that travel agencies can provide a better experience. Once this relationship is established, customers will return repeatedly, leading to repeat business and long-term value.
The question travel agencies need to ask themselves is: "What other important travel experiences are there that tourists are still willing to entrust to us?"
Conclusion
Travel agencies will not disappear, but the traditional role of intermediaries will diminish. The future winners will be those who can address complex needs and build long-term client relationships. After all, even the most advanced AI and platforms cannot replace human judgment and empathy.
The more than 70,000 travel agencies will evolve into different types of specialized businesses, rather than competing in a saturated market for standard services. Growth will not come automatically, but opportunities will be available to those who can redefine the value they offer to customers.