The tailor-made travel market - Italy (2023)

1.2 The global market

The customized travel market represents a strongly growing economic segment. Globally, this market was valued at $*** billion in **** and is expected to reach $***.* billion in ****, with a CAGR of *.*%. The expansion of the tailor-made travel market is attributed to the growing demand for distinctive and personalized travel experiences.

Global bespoke travel market forecast World, ****-****, US$ billion MMR

Regional distribution of global tourism

Following the positive performance andrevenue growth recorded in ****, the tourism industry will continue its stable growth. Analyzing the market geographically, it can be seen that the commercial concentration of tourism is greatest in Europe (***).[***]

1.3 General overview of the local market

The size of the Italian travel agency and tour operator market has changed significantly in recent years, particularly influenced by closures related to the Covid-** pandemic and the start of hostilities between Russia and Ukraine.

Prior to the onset of the pandemic, **** was considered the most crucial year in the growth of the tourism sector in Italy. Specifically, the tailor-made travel sector saw a significant increase in its revenue, generating an*.* percent increase over the previous year. However, as a result of health restrictions and difficult access to many long-haul destinations, the sector experienced a significant decline. Revenues from travel agencies and tour operators in **** were about *.* billion euros, more than a quarter lower than the **.* billion in ****. The industry also recorded a loss of about *,*** employees. In **** , the turnover of the sector taken into analysis is expected to close at about **.* billion euros, estimating a growth of +** percent compared to ****.[***]

Travel agencies and tour operators turnover Italy, ****-****, € billion TheSole ** Ore, TTG

The index of turnover on a quarterly basis of the activities of travel agency services, tour operators and reservation services and related activities is proposed below. This value measures the change over time with respect to the base ...

1.4 The impact of the Covid-19 pandemic on tourism

In **** , tourism accounted for ** percent of global GDP, worth nearly $* trillion, so that the sector was almost three times larger than agriculture. However, the value chain of tourism suppliers and intermediaries (***) that make up much of the sector. Governments have generally played a limited role in the sector, with partial oversight and "light" management, providing market autonomy.

With the spread of the Covid-** pandemic, an unprecedented crisis for the tourism industry has been attested to; in fact, a **-**% drop in international tourist arrivals compared to **** is noted, recording a reduction in tourism spending compared to pre-pandemic levels and putting as many as *** million jobs at risk. Reopening tourism-related businesses and managing their recovery in a way that is safe, attractive to consumers and economically viable required coordination at a level never seen before.[***]

In Italy, the tourism sector has been characterized by a steady expansion, touching the figure of ***.* million arrivals and ***.* million departures in accommodations in ****; this growth, in line with the global market, was abruptly interrupted in ****, due to the effects caused by the global pandemic. In fact, it is possible to see a **% reduction in the number of active businesses between **** and ****.[***]

As documented in the Istat ...

1.5 The impact of the Russian-Ukrainian conflict on the tourism industry

Russia's military offensive in Ukraine, in addition to being a global issue from the standpoint of loss of life, has resulted in the emergence of negative risks for international tourism; by exacerbating already high oil prices and transportation costs, it has increased uncertainty, causing travel to Eastern Europe to be disrupted. Specifically, if Russia and Ukraine are excluded, the most affected destinations so far are: the Republic of Moldova (***).[***]

European countries with the largest decline in the number of flights from Feb. ** to May **, **** World, ****, % change from **** UNWTO

Despite the conflict, there is an increase in air traffic from mid-March to early May, heavily influenced by the easing of travel restrictions imposed to contain the effects of the Covid-** pandemic. The conflict, however, continues to pose a serious threat to the total recovery of the tourism sector and, consequently, to the travel agency and tour operator market. In ****, Russian spending on foreign travel reached $** billion, while Ukraine spent $*.* billion. In ****, these figures dropped to $*.* billion and $*.* billion, respectively. As tourism destinations, Russia and Ukraine account for * percent of international tourist arrivals in Europe, but only* percent of Europe's international tourism revenues . The importance of both markets is significant for neighboring countries, ...

2.1 Demand characteristics

Consumer demand for travel agencies is strongly influenced by the summer period and the approaching holidays, a period when people take time off from work and vacation from places of knowledge. For these reasons, an overview of online search interest for the keyword "travel agency" is proposed. The values below represent the search interest with respect to the highest point on the graph, in relation to the indicated period. The closer a value is to ***, the more frequently the term is searched; ** indicates half of the searches. A score of *, on the other hand, indicates that not enough data were found for the term. It can be seen, then, that the search for this term is greatest before the summer season, registering an average of **.* in March '**; this value reaches a gradual decline in October '**, by about **.* percent.

Search interest over time for the keyword "travel agency" Italy, ****-****, Google Trends index Google Trends

The following is an overview of recent years of the types of activities favored on vacation; most Italians decide to choose vacations designed to indulge in a relaxing mooment, in recent years there has been an increase of **% of tourists choosing this type of vacation. ...

2.2 Factors influencing demand

There are a variety of motivations that can drive an individual to take a trip, and these are a key driver of the growth or decline in demand to travel agencies and tour operators. In ****, about ** million inviduals took a vacation trip; **.* million Italians , on the other hand, took a long vacation (***), while **.* million Italians took a weekend or holiday vacation. There are only *.* million who traveled for business reasons.

Total travelers - reason for travel Italy, ****, millions Istat Depending on the type of travel, a percentage of bookings made by mode chosen by the consumer is shown below. It can be seen that business trips tend to be booked directly by the individual (***). As for agencies, only **% of travelers intent on taking a long vacation decide to turn to the following channel.

Booking accommodation for a trip Italy, ****, % Istat Despite the recovery of the tourism sector, there are still many people who give up their vacations; specifically, going to analyze the reasons why travelers do not take trips, we note that these are very varied depending on the age group taken into consideration. About *.* million young people (***) about therecently passed pandemic emergency rises. In the age group that includes the ...

2.3 Geographical distribution of demand

The geographic distribution broken down by interest by online search for the keyword "travel agency" is shown below; the values shown, are calculated on a scale of * to ***, where *** indicates the location with the highest frequency of searches as a proportion of total searches for that location, and the value ** indicates a location with half as many searches. A value of *, on the other hand, indicates a location for which not enough data have been collected. In this particular case, there are not enough values for four Italian regions-Aosta Valley, Trentino-Alto Adige, Molise, and Basilicata. Campania emerges as the first region to search for the given keyword, and this finding suggests that consumer demand from travel agents may be concentrated in the mentioned region.

Campania: ***; Marche: **; Abruzzo: **; Sicily: **; Piedmont: **; Liguria: **; Umbria: **; Sardinia: **; Lazio: **; Tuscany: **; Veneto: **; Emilia-Romagna: **; Friuli-Venezia Giulia: **; Lombardy: **; Apulia: **; Calabria: **.

2.4 New demand trends

Globally, the strong recovery after the previously mentioned pandemic period is being confirmed; in this sense, travel agencies present a preponderant role, dominating ** percent of bookings globally. It is predominantly tourists who rely on agencies to explore different cultures, learn about local history and culture, and discover hidden and less-traveled destinations. Beyond that, there is also a growing consumer preference for booking travel through online channels; personalization and the use of social networks and websites for research and booking are crucial aspects.[***]

In recent years, there is an increasing trend among Millennials to prefer "Anywhere Travel"; specifically, unusual destinations are sought that enhance the experience rather than the specific destination. This target audience is estimated to increase per capita spending by **% in the next * years. This must be considered as Millennials travelers represent a segment consisting of about *.* billion people, surpassing, by now, boomers (***). Another determining trend in demand is that related to sustainability, which has become increasingly important during the past few years. Following the United Nations Conference on Climate Change, the climate issue has become an increasingly central element, also implying a greater awareness on the part of the new generations; in fact, while the generalist tourist in only ...

3.1 Market structure and dynamics

The travel agency sector has tended to be very stable. As reported below, there was steady growth until **** , with an increase since **** of **.* percent. Subsequently, due to the effects caused by the pandemic and restrictions, the sector went through a downturn, experiencing a decline in the number of active enterprises by nearly * percent.

Active enterprises in the travel agency sector Italy, ****-****, thousands of enterprises Istat

In the travel agency sector, ** percent of workers are employees; these tend to fill administrative, organizational and planning roles. This includes managing reservations, planning trips, assisting clients, managing relationships with suppliers and preparing customized itineraries. To do this job well, it is important to have a propensity for communication, planning, andorganization , and often it is relevant to know multiple foreign languages. Employees work mostly in offices, interacting with clients in person and via online platforms (***). Four percent, on the other hand, consists of managers.

The categories of workers in the travel agency industry Italy, ****, % EBNT The majority of employees in the sector are employed on a full-time contract (***); only ** percent of the sector has a part-time contract. Contract types in the travel agency sector Italy, ****, % EBNT Taking into consideration the industry's recruitment time, three determinants ...

3.2 Value Chain

The value chain in the travel agency market can be divided into several main stages:

research and development: includes the identification of new tourism destinations, travel trends and innovative services. Agencies export and evaluate new market opportunities. resource acquisition and management: covers the negotiation and purchase of services from suppliers such as airlines, hotels, and local operators. It also includes staff training and management. marketing and sales: agencies promote their services through various marketing strategies, including online advertising, social media, and partnerships. distribution: travel agencies distribute their products and services through various channels, such as physical offices, websites, and online platforms. customerservice and support: providing customer support before, during, and after travel is crucial. This includes handling reservations, support in case of problems during the trip, and post-trip feedback. evaluation and feedback: the stage where feedback from customers is received and analyzed to continuously improve services and adapt to changing market needs.

3.3 Distribution chain of tourism services

Travel agents play a central role in the distribution of tourism services;

Wholesalers: wholesalers operate upstream in the distribution chain of tourism services. Specifically, they purchase large quantities of tourism products, such as travel packages from tour operators, and resell them to retailing agencies. This modus operandi allows the retailing agencies to obtain competitive prices and access to a wide range of services. RetailingAgencies: retailing agencies focus exclusively on the activity of tourism intermediation. Thus, they are not involved in producing tour packages or arranging travel, but only sell the services of other companies, such as: flights, accommodations, and tours. Retail companies play a crucial role in connecting travelers and tourism service providers. TourOrganizer: tour organizer travel agencies produce and organize tailor-made trips. These are, therefore, customized tour packages. TourOperators: tour operators are companies that specialize in producing and organizing complete trips. They are in the business of creating tour packages that include flights, accommodations, ground transportation, excursions and other activities. They often specialize in specific destinations or certain types of experiences (***).

Note well that a travel agency could perform all of the above tasks. Dwelling on travel agency management approaches, there are two types of agency classifications:

Incoming: this type ...

3.4 Main actors

In Italy, some notable companies for both continental and intercontinental travel are included among the top travel agencies and tour operators for ****.

Islands Travel: specializes in travel to Italian and Mediterranean islands, offering experiences in smaller islands such as Lipari and Vulcano, as well as Sicily and Sardinia; OTA travel: has ** years of experience and offers travel to various regions of Italy, as well as Switzerland and Austria; Guinness Travel: focused on European travel, is known for detailed itineraries and guided tours; Mappamondo Tour Operator: excels in travel outside Europe, offering destinations such as Cuba, Maldives, Indonesia, South Africa and Zanzibar.

In addition, well-known online travel agencies include:

Evvai: specializing in beach vacations in Italy, working with resorts, hotels, and vacation rentals in several Italian regions; VolaGratis: a travel search engine offering reservations for flights, hotels, vacations, cruises and car rentals; Booking: one of the longest-running online travel agencies, it allows booking of hotels, vacation homes and other types of accommodations Edreams: one of the best-known and most widely used online vacation portals; with last-minute deals and special care in content and images, Edreams offers numerous travel tips, complementing its primary sales activity with a strong consulting component.[***]

4.1 Type of Offering

Travel and tourism agencies are businesses that perform different activities:

travelarrangements : choosing the destination, attempting to provide the best advice to the consumer; intermediation: agencies perform the task of intermediation between consumers and the main facilities where reservations are to be made; booking and selling tickets: for travel and stays.

The travel agency's job is to organize and sell customized trips, focused on the customer's needs and available offers. Typically, travel agencies offer customers package options or products offered by tour operators. The latter are responsible for planning the travel packages or tours, with all ancillary services attached, while the agency is responsible for selling the proposed package.[***] The individual packages represent the offerings of the various agencies, offerings that are particularly changeable depending on the following factors:

type of vacation envisioned by the consumer; region of departure; type of agency selected.

Pros and cons of booking through an agency

By booking your trip through an agency, you are interfacing with a person specialized in the subject matter who, for any destination, will be able to recommend the best accommodations and/or the most interesting and comprehensive tour operators. In addition, agencies are able to recommend the most appropriate seasonal period ...

4.2 Prices

Travel agency prices are highly changeable depending on the type of service offered. Some travel agencies deal only with booking, others with complete travel packages. Where reservations are made in advance, some agencies may offer discounts. In general, a very wide price range is expected, ranging from €*** to even more than €*,***. The final price will depend on the destination, the length of the trip, and the number of people leaving. If you choose to take advantage of the complete package offered by some agencies, the final price will be higher.

How to save money

Certainly the prices will be lower more where you book well in advance, however to save money, it is essential to make a comparison of different travel agencies, taking advantage of discounts or offers from the agencies themselves.[***]

Examples of price quotes

The following is an overview of some price quotes found in some well-known channels in the industry:

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4.3 New supply trends: travel bloggers

Travel bloggers represent increasingly influential players in the tourism industry and online consumer community. Thanks to their ability to offer advice and stories, they combine their firsthand experiences with knowledge of different cultures, offering virtual guides and transporting their followers to the places they have experienced, inspiring them to explore the world. Their influence on the travel market is considerable; in fact, they not only tell and describe the places visited, but also influence the opinions of stakeholders and are used as effective marketing tools to raise awareness of tourism products and destinations. Beyond that, social networks and blogs also present a central role in the travel industry, with bloggers and influencers motivating their followers to choose specific places, facilities or itineraries. These strongly influence the dynamics of perception of an area, deeply affecting travelers' choices and replacing traditional promotional logic with the power of storytelling from experience, a marketing lever that creates empathy and loyalty. There are different categories of travel bloggers:

Luxury Travel Bloggers: one of the most well-known and followed categories is the luxury travel bloggers. These focus on sponsoring exclusive destinations, such as luxury hotels, gourmet restaurants and high ivlevel travel experiences. BudgetTravel Bloggers: low-cost travel bloggers, ...

5.1 Rules and regulations

Italy has a very thriving regulation of travel agencies, governed by various laws and legislative decrees, which have evolved over time;

Framework Law ***/****: With this legislation, specific provisions for travel agencies and tour operators were ncluded, helping to define the regulatory framework of the sector. Although it was repealed by Law ***/****, some of its principles continued to influence the regulation of travel agencies, as they provided a foundation upon which subsequent laws were built. Framework Law ***/****: the following law reformed the aforementioned '** legislation, going on to define the tourism sector as central and strategic to the development of the Italian economy. Law ***/****: this law transferred functions and competencies related to tourism to the regions, mainly controlled by the Ministry of Tourism. Legislative Decree ***/****: the following legislative decree performs a decisive function for the tourism sector, establishing the state's competence in tourism, transferring all other functions to the regions.

In addition, it is important to mention several other regulations and directives relevant to the sector:

Tourism Code: Code of state regulations concerning the tourism order and market, going on to implement Directive ****/***/EC, on timeshare contracts and long-term vacations; EU Directive **/****: also known as the Professional Qualifications Recognition Directive, has had ...

5.2 Travel agency and tour operator bonuses

Following the economic effects that occurred due to the Covid-** pandemic, the Italian Ministry of Tourism has initiated financial livelihood measures designed to compensate for losses incurred during the emergency. The deadline for submitting applications has been extended into ****. The bonus is accessible for businesses registered under Ateco codes **.*, **.** or **.**.

Defined by the ministerial decree of June **, ****, it is provided for non-refundable grants for travel agencies and tour operators. The necessary requirements for access to the grant, include:

registration in the appropriate Ateco Business Register; be active businesses and not in bankruptcy proceedings; have a registered office in Italy; be in good standing with protection obligations in case of insolvency or bankruptcy; be in possession of civil liability insurance contract for the years **** to ****; not be the recipient of disqualification sanctions; be in compliance with social security, tax and insurance obligations; have suffered a decrease in turnover and fees in the year **** (***).

Incentives are disbursed as outright grants (***). Beneficiaries must apply through the Ministry of Tourism's IT Platform, accessible with SPID/CIE. The application requires the declaration of the difference between the amount of active invoices and receipts, from January *, **** to December **, **** and the amount of active invoices and receipts of ...

6.1 Segmentation

Activities of travel agencies

Tour operator activities

• Idee Per Viaggiare
• Gattinoni Travel Network
• Italcamel
• BCD Travel
• Alpitour
• 6Tour
• Musement