Holiday fever
One's thoughts turn, quite naturally, from wondering whether to put in that extra hour to dreams of sandy shores in some exotic destination. But while most of can count on getting away for a summer break, July and August are the hottest months for travel agents who give their all for their customers' pleasure
In Poland, approximately 3,000 companies operating in the tourism sector will, for the coming months, compete to attract as many clients as possible. The bulk of Polish travel offices are small entities with up to five employees. Only about 650 companies hire more than five people. Only seven Polish tour operators register revenues of around zł.25 million and there are just three that operate in the zł.10-20 million range. Their financial results cannot compare with those of international giants such as Neckermann or TUI, but on the local market good old Orbis and transformation times' stars such as Triada, Itaka or Sindbad are by far the most recognizable and trusted brands.
Time travel
Before the 1990s, there were only a few Polish tour operators and travel agents, all of them state-owned and focusing on domestic excursions, because having a passport was a real luxury and foreign voyages were out of the average Pole's reach. The boldest individuals dared to dream of package tours to the nicely non-Baltic Bulgarian Black Sea or 'so Western' Yugoslavia. Gromada, Orbis or Juventur were some of the few players on the extremely restricted travel-agency market, but the masses depended on the company vacation fund (FWP) to organize their free time.
Travel agent boom
"In the first phase after the fall of communism, there was a real avalanche of new tourism offices - anyone could organize trips as there were no regulations. Standard requirements for establishing a travel business were finally laid down in a new bill on tourist services in 1997," explains Józef Ratajski, the deputy president of the Polish Chamber of Tourism (PIT).
"It states that all agents and organizers need a permit issued by a voivodship. Step by step, the number of makeshift tour operators decreased, especially after insuring the trips became obligatory."
In more recent years, there has been a rapid decrease in the number of tour operators from 3,700 in 2003 to 3,000 at the end of 2004. According to Ratajski, around 15 percent of companies disappear every year and only 10 percent launch operations with new ideas.
Disillusioned giants
But being an international giant does not guarantee success in the Polish market, which is best illustrated by the example of Ving Travel Bureau, which in 2001 merged with the Opole-based Itaka.
Piotr Henicz, Nowa Itaka's sales and marketing director, said: "Itaka was founded in 1989 and for many years operated as a Polish-owned company. Then Ving proposed to buy 100 percent of its shares and we agreed.
"Ving is part of the My Travel company listed on the LSE [London Stock Exchange] but after [the terrorist attacks of] September 11, stock prices started to fall and Ving decided to withdraw from the Polish market. They simply did not know its specificity. Now we continue to operate with success without foreign capital," he said.
Joining forces
Nowa Itaka avoids taking great risks. The company organizes trips by airplane, but their good standing is based on coach travel - they are much cheaper and still very popular in spite of the low-fare airlines entering the Polish market. "New air carriers make flying more popular and accessible but once you get to the chosen destination you have to organize your holiday by yourself. Plenty of people are afraid to go abroad unassisted - they prefer our package offers," explains Henicz.
Another Polish travel agent, Open Travel Group, followed the 'bigger can be better' philosophy. "The companies that constitute the group came into being 16 years ago but the brand is only two-and-a-half years old. It appeared on the market after already well-known tour operators Delta-Travel, Jan-Pol and Jordan joined forces to become a major player in the tourism sector with the highest number of agents," says Małgorzata Baklarz, Open Travel's spokesperson.
Figuring it out
According to statistics provided by the Institute of Tourism, the net yield in the travel agencies employing more than nine persons amounts to 0.1 percent, which is not very encouraging. The average net yield from a single trip equals approximately 10 percent, excluding office management expenditures.
What makes the travel business even more difficult is its seasonality, with summer being everybody's favorite holiday choice. "In order to attract clients, one needs a very wide offer. In the summer we organize trips to Egypt, Tunisia or Cyprus and already in September we issue new catalogues with winter stays in Italy, Austria and Slovakia. One also has to bear in mind that an average Polish customer is not a tycoon, so price is an important factor. And if you want your holidaymakers to come back next year, you'd better make sure the reality does not differ too much from the pictures in your brochures," Małgorzata Bakałarz added.
Poles on the move
Polish people like to move around. In 2004 there were 37.2 million departures abroad from Poland, of which 6.3 million trips were tourist trips (i.e. with overnight stays). Top travel destinations were: Germany, with over one third of departures, Italy, the Czech Republic, Slovakia, Austria and France. It should be borne in mind, though, that many tourist trips to Germany, the Czech Republic and Slovakia are included in the statistics for people traveling further on their way to other countries located in Western and Southern Europe. When it comes to inbound traffic, an increase in the number of visitors from Germany is mostly due to the intense border trade.
In the mid 90s it seemed that international tour operators would totally dominate the Polish market, but it soon turned out that their offers were not so much to the taste and possibilities of local customers. Good knowledge of the situation in the Polish sector as well as enthusiasm and new ideas, enabled three good mates to turn their hobby into a successful business. Triada's founders are all keen skiers and they started off in the business organizing winter holidays for their peers. Fourteen years on, they own a travel agency with the second biggest capital (zł.6.5 million) among all Polish players, the first one being Orbis (zł.16.453 million) who in 2000 merged with Accor, the third-largest hotel group worldwide.
Success story
Triada has posted sales growth of nearly 100 percent over the last four years. In 2004, the company's turnover reached zł.210 million, and is expected to increase by a further 20 percent in 2005. "We owe our success to hard, systematic work and 10 years of investments," says Triada's CEO, Piotr Zawistowski.
"We don't make any special surveys as to what new destinations would be the most popular. Of course, we listen to the suggestions of our clients but also try to create demand for new destinations on the basis of our knowledge about prices and local infrastructure. We also draw on the many years' experience of foreign companies - after all, the Polish tourism sector is only 15 years old, while western countries have been operating in the business for much longer," says Zawistowski.
Even though the tourism industry is a risky sector, there is still a lot to be done. According to a World Tourism Organization report, Polish tourism remains significantly underdeveloped, with investment opportunities rising in most market sectors. The accommodation market in particular has attracted numerous international investors, and more are expected to enter the scene. Because of this room for growth, the group's forecast for the period to 2008 are rather optimistic. And if Polish tour operators manage to capitalize on that, it will be their ticket to success.
In Poland, approximately 3,000 companies operating in the tourism sector will, for the coming months, compete to attract as many clients as possible. The bulk of Polish travel offices are small entities with up to five employees. Only about 650 companies hire more than five people. Only seven Polish tour operators register revenues of around zł.25 million and there are just three that operate in the zł.10-20 million range. Their financial results cannot compare with those of international giants such as Neckermann or TUI, but on the local market good old Orbis and transformation times' stars such as Triada, Itaka or Sindbad are by far the most recognizable and trusted brands.
Time travel
Before the 1990s, there were only a few Polish tour operators and travel agents, all of them state-owned and focusing on domestic excursions, because having a passport was a real luxury and foreign voyages were out of the average Pole's reach. The boldest individuals dared to dream of package tours to the nicely non-Baltic Bulgarian Black Sea or 'so Western' Yugoslavia. Gromada, Orbis or Juventur were some of the few players on the extremely restricted travel-agency market, but the masses depended on the company vacation fund (FWP) to organize their free time.
Travel agent boom
"In the first phase after the fall of communism, there was a real avalanche of new tourism offices - anyone could organize trips as there were no regulations. Standard requirements for establishing a travel business were finally laid down in a new bill on tourist services in 1997," explains Józef Ratajski, the deputy president of the Polish Chamber of Tourism (PIT).
"It states that all agents and organizers need a permit issued by a voivodship. Step by step, the number of makeshift tour operators decreased, especially after insuring the trips became obligatory."
In more recent years, there has been a rapid decrease in the number of tour operators from 3,700 in 2003 to 3,000 at the end of 2004. According to Ratajski, around 15 percent of companies disappear every year and only 10 percent launch operations with new ideas.
Disillusioned giants
But being an international giant does not guarantee success in the Polish market, which is best illustrated by the example of Ving Travel Bureau, which in 2001 merged with the Opole-based Itaka.
Piotr Henicz, Nowa Itaka's sales and marketing director, said: "Itaka was founded in 1989 and for many years operated as a Polish-owned company. Then Ving proposed to buy 100 percent of its shares and we agreed.
"Ving is part of the My Travel company listed on the LSE [London Stock Exchange] but after [the terrorist attacks of] September 11, stock prices started to fall and Ving decided to withdraw from the Polish market. They simply did not know its specificity. Now we continue to operate with success without foreign capital," he said.
Joining forces
Nowa Itaka avoids taking great risks. The company organizes trips by airplane, but their good standing is based on coach travel - they are much cheaper and still very popular in spite of the low-fare airlines entering the Polish market. "New air carriers make flying more popular and accessible but once you get to the chosen destination you have to organize your holiday by yourself. Plenty of people are afraid to go abroad unassisted - they prefer our package offers," explains Henicz.
Another Polish travel agent, Open Travel Group, followed the 'bigger can be better' philosophy. "The companies that constitute the group came into being 16 years ago but the brand is only two-and-a-half years old. It appeared on the market after already well-known tour operators Delta-Travel, Jan-Pol and Jordan joined forces to become a major player in the tourism sector with the highest number of agents," says Małgorzata Baklarz, Open Travel's spokesperson.
Figuring it out
According to statistics provided by the Institute of Tourism, the net yield in the travel agencies employing more than nine persons amounts to 0.1 percent, which is not very encouraging. The average net yield from a single trip equals approximately 10 percent, excluding office management expenditures.
What makes the travel business even more difficult is its seasonality, with summer being everybody's favorite holiday choice. "In order to attract clients, one needs a very wide offer. In the summer we organize trips to Egypt, Tunisia or Cyprus and already in September we issue new catalogues with winter stays in Italy, Austria and Slovakia. One also has to bear in mind that an average Polish customer is not a tycoon, so price is an important factor. And if you want your holidaymakers to come back next year, you'd better make sure the reality does not differ too much from the pictures in your brochures," Małgorzata Bakałarz added.
Poles on the move
Polish people like to move around. In 2004 there were 37.2 million departures abroad from Poland, of which 6.3 million trips were tourist trips (i.e. with overnight stays). Top travel destinations were: Germany, with over one third of departures, Italy, the Czech Republic, Slovakia, Austria and France. It should be borne in mind, though, that many tourist trips to Germany, the Czech Republic and Slovakia are included in the statistics for people traveling further on their way to other countries located in Western and Southern Europe. When it comes to inbound traffic, an increase in the number of visitors from Germany is mostly due to the intense border trade.
In the mid 90s it seemed that international tour operators would totally dominate the Polish market, but it soon turned out that their offers were not so much to the taste and possibilities of local customers. Good knowledge of the situation in the Polish sector as well as enthusiasm and new ideas, enabled three good mates to turn their hobby into a successful business. Triada's founders are all keen skiers and they started off in the business organizing winter holidays for their peers. Fourteen years on, they own a travel agency with the second biggest capital (zł.6.5 million) among all Polish players, the first one being Orbis (zł.16.453 million) who in 2000 merged with Accor, the third-largest hotel group worldwide.
Success story
Triada has posted sales growth of nearly 100 percent over the last four years. In 2004, the company's turnover reached zł.210 million, and is expected to increase by a further 20 percent in 2005. "We owe our success to hard, systematic work and 10 years of investments," says Triada's CEO, Piotr Zawistowski.
"We don't make any special surveys as to what new destinations would be the most popular. Of course, we listen to the suggestions of our clients but also try to create demand for new destinations on the basis of our knowledge about prices and local infrastructure. We also draw on the many years' experience of foreign companies - after all, the Polish tourism sector is only 15 years old, while western countries have been operating in the business for much longer," says Zawistowski.
Even though the tourism industry is a risky sector, there is still a lot to be done. According to a World Tourism Organization report, Polish tourism remains significantly underdeveloped, with investment opportunities rising in most market sectors. The accommodation market in particular has attracted numerous international investors, and more are expected to enter the scene. Because of this room for growth, the group's forecast for the period to 2008 are rather optimistic. And if Polish tour operators manage to capitalize on that, it will be their ticket to success.
