The first travel agency in China, established in Shanghai Commercial Bank in 1923, had been oriented to administrative business up to early stage of the reform and opening up and gradually shifted from a policy-oriented stage to a market-oriented stage from 1978 to the present. It is fundamentally different from overseas travel agency which spontaneously occurs in market. As market economy is becoming perfect, improvement for division system in China’s travel agency industry is extremely urgent. In this paper, division system in China’s travel agency industry is studied to analyze its present state. After being applied reasonably in the period of planned economy, horizontal division system in China’s travel agency industry gradually became unreasonable due to failure to cater to growth of market flexibly in a system of shift to market economy: Economies of scale cannot be formed; conventional travel products face multiple crises; and barrier to costs and risk of being imitated exist in occurrence of new travel products. Vertical division system has numerous advantages but multiple barriers in its construction. In this regard, major countermeasures are proposed for construction of vertical division system in China’s travel agency industry.