The Study Of The Profit Model Of CITS Focusing On Tax-free Business

Since initiating the reform and opening up,China's tourism industry has developed rapidly,with the honor of “forever sunrise industry”.At present,it has also become a national key development project,and the scale of the tourism market is also steadily expanding.With the improvement of people's living standards,the purpose of outbound tourism has gradually developed from commercial outbound tourism to consumer outbound tourism for tourism purposes.At the same time,the market is facing greater competitive pressure due to the low barriers in the industry,the strengthening trend of online travel agencies,and the traditional profit model of travel agencies is not suitable for the market development.Therefore,traditional tourism enterprises are looking for profit model transformation.Duty-free industry is an important part of tourism industry.Since the development of tourism industry will drive the development of tax-free industry and China's tax-free industry started late,the duty-free industry is currently unified and centralized management by the state.As an enterprise that operates both travel agency business and duty-free business,China National Travel Service expanded the scale of duty-free business in 2017 and 2018 through mergers and acquisitions and winning the bid for the right to operate duty-free shops in important airports.Due to the low gross profit margin of traditional tourism service industry,China National Travel Service gradually focused on duty-free business,and sold China National Travel Service in 2019,which completed the transformation of profit model.CITS taken as the research object.At present,most of the literature on CITS focuses on its traditional tourism service industry,and the innovation of this paper is to analyze the profit model of CITS focusing on tax-free business in recent years.This paper gives the priority to introduce the process of its profit model transformation,and analyze the reasons for the transformation.Starting from the five elements of profit model,combined with the financial data of enterprises in the past five years,and comparing with the financial data of CITS which has also in the same tourism comprehensive section,this paper analyzes theprofit model after the transformation of CITS.The main characteristics of its profit model are: firstly,it relies on its duty-free business license nationwide;secondly,it continuously expands the business scale and improves the bargaining power of enterprises through mergers and acquisitions and winning the airport management right.Although CITS occupies a large market share in China,it still faces enormous competitive pressure in the international market.At the same time,in the process of operation,there are some shortcomings,such as too large proportion of monetary capital,increasing investment risk in the future,disunity of online and offline systems,low viscosity of consumers and too single industrial chain.Therefore,this paper puts forward corresponding suggestions from the aspects of external environment and internal management,first of all,enhance their own core competitiveness,expand international influence,second,reasonably use idle funds to reduce investment risk,create new retail management and develop multi-channel industrial chain,and increase profit points.The transformation of CITS's profit model is to peel off the low profit margin businesses of enterprises and focus on advantageous businesses.Thus,it is hoped that the research on the transformation of CITS's profit model will have certain reference significance for other enterprises facing the transformation of profit model.