Evaluating the effectiveness of franchise in tourism

Abstract

Russian tourism industry is going through hard time. Devaluation of Russian ruble and bankruptcy of several major tour operators caused customers mistrust. Market players are forced to unite, consolidate. One of the most effective ways to withstand in this hard time is franchising. But how a beginner of touristic retail market can pick the right one? How a tour operator can build an effective franchise and attract more professional agents in own network? Developed model is based on mathematic analysis of the most important factors – component parts of franchise. This model as well as the general technique allows by simple calculation evaluate the effectiveness of franchise. The modern condition of Russian tourism market is next: strengthening of the tour operator market; those who survived gained the reputation, others are out of game; а clearer division of Agency market into niches; the change of relations scheme between market players. Small players are forced to unite, consolidate; increasing the service quality in attempt to keep customers.