Digital Transformation and Profit Margins in Travel Agencies: An Empirical Study

This study analysis the various factor of e-commerce that affect the profit margin in the travel agency industry. The transformation in this travel agency over the last two decades is due to the rapid growth of the internet and digital technologies. The traditional or conventional travel agencies, which relied on physical offices and direct customer interactions, are start adopting online platforms to deliver services, reflecting a shift toward e-commerce. This study inspects how the adoption of e-commerce are related to the various factors that influence the profit margin of travel agencies located in the Itanagar Capital Region (ICR), Arunachal Pradesh. Primary data were collected from 28 travel agencies using questionnaire through field surveys, focusing on variables such as the number of online bookings, years of service, business model, service competition, and financial challenges. For data analysis, the regression model and ANOVA analyses were employed to evaluate the strength and significance of these independent variables to the profit margin (dependent variable). The analytical results shows that the number of online bookings has a strong and statistically significant positive impact on profit margins, explaining approximately 74.6% of the variation, highlighting the very importance parameter of digital marketing. The adoption of innovative business models also shows a moderate yet significant positive effect, suggesting that strategic adaptation enhances financial performance. In contrast, traditional factors including years of service, service competition, and financial challenges were found to have little to no significant effect on profit margin. These findings indicate that a strong digital presence, combined with customer-focused and innovative survives, which play a very critical factor to financial success. The study explain the various role of digital marketing in shaping the competitiveness and growth of travel agencies and provides practical insights for agencies seeking to optimize online strategies, adopt suitable business models, and meet evolving consumer expectations in a digitally driven market.