A total of 86 travel agencies shut shop in the first five months of this year, surpassing the 80 new ones that obtained operating licences, according to the Singapore Tourism Board (STB).
At the current pace of closures, the number of firms going out of business this year is set to exceed the 114 that ceased operations last year, the STB forecast.
This will extend the trend since 2011 when closures have risen year after year. Meanwhile, 159 new travel agency licences were issued last year, down from 163 in 2013, STB data showed.
The Singaporean newspaper Today quoted Dr Michael Chiam, senior tourism lecturer at the Ngee Ann Polytechnic as saying that wafer-thin margins and cut-throat competition continued to push smaller players into the corner, while Internet-savvy travellers and assembling their own itineraries and cutting out agents.
Kay Swee Pin, President of the Singapore Outbound Travel Agents Association (SOTAA), said in fact, there are far too many travel agents in a small market such as Singapore. As of December there were 1,201 licensed travel agents here, up from 973 in 2010 and 735 in 2005.
Smaller operators often undercut the competition with low rates, but eventually collapse when their business model becomes unsustainable.
However, bigger travel agencies have also gone out of business. Asia-Euro Holidays pulled down its shutters abruptly last month after 13 years in business, leaving hundreds of customers in the lurch. Five Stars Tour, another well-known travel agency, went bankrupt in January last year.
Some travel agencies are calling for more regulation to curtail such closures that are casting the industry in a poor light.-VNA
At the current pace of closures, the number of firms going out of business this year is set to exceed the 114 that ceased operations last year, the STB forecast.
This will extend the trend since 2011 when closures have risen year after year. Meanwhile, 159 new travel agency licences were issued last year, down from 163 in 2013, STB data showed.
The Singaporean newspaper Today quoted Dr Michael Chiam, senior tourism lecturer at the Ngee Ann Polytechnic as saying that wafer-thin margins and cut-throat competition continued to push smaller players into the corner, while Internet-savvy travellers and assembling their own itineraries and cutting out agents.
Kay Swee Pin, President of the Singapore Outbound Travel Agents Association (SOTAA), said in fact, there are far too many travel agents in a small market such as Singapore. As of December there were 1,201 licensed travel agents here, up from 973 in 2010 and 735 in 2005.
Smaller operators often undercut the competition with low rates, but eventually collapse when their business model becomes unsustainable.
However, bigger travel agencies have also gone out of business. Asia-Euro Holidays pulled down its shutters abruptly last month after 13 years in business, leaving hundreds of customers in the lurch. Five Stars Tour, another well-known travel agency, went bankrupt in January last year.
Some travel agencies are calling for more regulation to curtail such closures that are casting the industry in a poor light.-VNA
