In 1980, when Abdul Mannan Chowdhury finished his studies, he decided to start his own business. He wanted to build a travel agency company and in 1982, he established Asia Overseas in a small room in Chattogram. He hired a peon to look after the space.
It took him a couple of years to get the company registered under the Ministry of Civil Aviation and Tourism and finally in 1986, he got the license.
“There was no one to teach me the ways of this trade. I sat for hours in the airline offices to see how the officers worked, booked the tickets, wrote the card and the PNR [Passenger Name Record], etc,” Mannan said.
His first clients were his village residents in Chattogram. When someone wanted to travel, s/he informed Mannan and Asia Overseas did the paperwork for them. Then the agency did the same for the client’s family members who, in turn, connected more people from their area to the agency.
“The entire business was based on trust and my clients came from referrals. Also, there were fewer people going abroad,” he said.
Mannan mentioned that back then there were not more than 50 to 60 travel agencies in Chattogram in the absence of any modern technology like online services or mobile phones.
So, what they had to do was go to the airline’s offices to see the PNR and confirm the passenger seats. “I remember asking for one seat to the airline officer and he would offer a share. I would then request a little more commission for the ticket sale,” he recalled.
The passengers from Chattogram were moved to the Zia International Airport in Dhaka through domestic flights or bus services. According to Mannan, there were not many counters in the airline’s offices.
Now, his son looks after the agency and they have expanded their office to Dhaka. “It feels good when the next generation values what you have created,” said Mannan.
There are 4,775 travel agencies in Bangladesh that are approved by the Ministry of Civil Aviation and Tourism. Bangladesh Association of International Recruiting Agencies (BAIRA) has 1,964 agencies listed and registered, that engage in promoting the manpower market abroad and deploying unemployed Bangladeshi manpower in foreign countries after receiving necessary training.
But apart from these, there are many more travel agencies mushrooming in the country now that online services have become accessible to everyone. Now, anyone can become a travel agent without prior experience.
Thus, this is how the term Online Travel Agencies (OTA) came to the market. Although the platform is yet to be reformed, a couple of companies (such as GoZayaan, ShareTrip, etc) are already doing quite well.
According to the 2019 information by the Civil Aviation Authority of Bangladesh (CAAB), in the last five years, international air passengers increased around 22.10% while domestic air passengers increased around 64.73% in the country.
Despite the drop in these numbers due to the pandemic, in 2022 Bangladeshi airlines transported 50.51 lakh passengers, and the industry is trying to return to the pre-Covid situation.
Three types of travel agencies
In 2019, three researchers from Bangladesh published a case study, titled ‘Operations and market analysis of travel agencies: An empirical study on two travel agencies of Bangladesh,’ where they monitored 450 passenger travels.
According to the research, the main customers of Bangladeshi travel agents are mid-level tourists. Most of the people take return tickets and are in economy class.
These travel agencies offer different packages to customers according to their choice and need. They also serve business-to-business, business-to-customer and business-to-employee categories of clients along with individual ticket sales.
NGOs, domestic companies, multinational companies, banks and different government organisations are the main customers for corporate sales. Some of them use specific airlines according to their business purpose.
Individual sales customers are mainly tourists, students and businesspersons.
Overall, the market has three categories of agencies. Mannan’s Asia Overseas is what most of the travel agencies look like- they mostly handle the visa procedure and book air tickets.
“Most of our customers are migrant workers who travel to the Gulf countries – Oman, Saudi Arabia and Bahrain. Now many people are going to European countries as well through Bureau of Manpower, Employment and Training (BMET) processes,” said Mannan.
While a travel agency needs to get permission from CAAB to start its business, it also has to get accredited by the International Air Transport Association (IATA) to sell tickets. Each agency is given a registration number by CAAB.
“Now communication technology has made it easier to inform clients about their flights and visas. [Back in the day], I had to send one of my employees to inform clients that their visa had arrived,” said Mannan.
Selling air tickets is the heart of any travel agency business. “The airline companies have tickets that they bring up for auctions. Travel agencies buy those tickets in advance for a wholesale price, which is called a ‘group ticket’. Then the agency sells those tickets to individual customers for a better price,” explained a former travel agency employee requesting anonymity.
He further added, “That is how the agencies make profits.” This way, the airline gets all its tickets sold. These group tickets are mainly sold to the migrant workers who travel to the Middle East.
According to him, the agencies also get 7% profit per ticket from the airlines.
Finally, for booking a ticket, they need to collect valid travel documents like passports, visas and other documents. After the payment is done, the travel agents will mail the tickets or customers can collect them from the agency office.
The other category is tour package-based agencies, which organise tours and book hotels for customers, which may or may not include tickets and transportation.
“95% of the Traditional Travel Agency (TTA) market consists of these field-level travel agents. It’s only in Dhaka city that a couple of OTA models have been working for over the last 5 to 7 years. Still, the OTAs are very small in size, only a few work in this spectrum,” said Farzana Faiza Bushra, public relations officer of GoZayaan, one of the most popular OTAs in Bangladesh.
According to a GoZayaan customer survey, only 5% to 7% of the total travel agency market is covered by OTAs, the rest is still served by the TTAs.
OTA vs TTA
OTA is not just about choosing a package online and sending money through bKash, rather it includes a holistic online platform.
“Traditional travel agents [TTA] get some ticket information from the airlines and the agent sells that information directly to the client. Word of mouth is a big thing here. But the problem with this type of purchasing is that the agent will not give you proper pricing, so as a customer, you will have fewer options,” said Bushra.
She added, “The reason people tend to go with traditional agencies is they do not have to look for the options themselves.”
“Goodwill and trust is the currency here. If I maintain a good relationship, a client will bring another customer to me, because no matter how digital we have become, normal people still believe in a person who can talk rather than a computer,” Mannan opined.
But the reality is, that there is much more information available online, and that is what the OTAs want to target in order to give more visibility and information to customers.
The TTAs will set tour packages and book hotels manually but they will take the payment online. However, they usually lack customization travel options.
“But a good OTA will give you [customisation] option. Not a single step will be manual, it will be API [application programming interface] integrated, which can be defined as the process of creating a means for two or more APIs to share data and communicate with each other without human interruption,” explained Bushra.
“That is how the customer behaviour will change because OTAs give the customer more information, flexibility and more control over his/her tour planning,” Bushra further explained.
She mentioned that OTAs have partnerships with domestic airline companies like Bangladesh Biman, Novo and US-Bangla, and also with international companies like Emirates and Indigo.
“If you check the app or the website, you will find a lot of flight options and details,” Bushra added. GoZayaan has partnerships with international OTAs like Expedia, and Booking.com; with banks and with hotels in the country and abroad as well.
According to her, GoZayaan serves approximately one million customers monthly through flights, tour packages and hotel booking services and almost 60% are their repeat customers.