Travel Agencies

The 7,476 travel agencies in the US provide reservation and travel services to individuals and groups. Travel agencies generate revenue through two models: the merchant model and the retail/agency model. Under the retail/agency model, agencies earn commissions from suppliers based on bookings. Under the merchant model, agencies earn revenue by charging customers more than the negotiated amount paid to travel suppliers.

Economic Sensitivity

The travel industry is vulnerable to downturns in the economy and fluctuations in corporate and consumer spending.

Competition From Alternative Sources

Travel agencies compete with a variety of alternative sources for business.

Sep 4, 2026 - Hotter Summers Push Travelers to New Destinations

• Extreme heat is becoming a bigger factor in how Americans plan vacations, giving travel agencies another variable to manage when recommending destinations and timing trips. Around 4 in 10 adults say extreme heat has affected their travel or vacation plans, up from about one-quarter in 2024, according to an AP-NORC poll. Travelers may be more reluctant to book traditionally popular destinations during their hottest months, opening opportunities for agents to steer clients toward cooler locations or shift trips into spring and fall. That could also make weather conditions a bigger part of conversations about itineraries, outdoor activities, and travel insurance. Agencies may need to stay more flexible as heat waves disrupt plans or make certain experiences less appealing, while shoulder-season travel could gain traction among customers looking for comfortable temperatures, smaller crowds, and potentially lower prices.
• Rising travel costs are prompting more Americans to rethink their vacation plans, changing the way travel agencies attract and serve clients. Higher prices for airfare, hotels, dining, and attractions are leading many travelers to shorten trips, choose destinations closer to home, or postpone vacations altogether. The US Travel Association says many consumers have reached a financial "breaking point," while a Monster survey found that 52% of workers plan to stay home more this summer to save money. As budgets tighten, travelers are increasingly looking for value, with Hotels.com reporting an 1,800% year-over-year increase in use of its budget filter. For travel agencies, the shift is increasing demand for discounted vacation packages, all-inclusive resorts, flexible payment options, and expert guidance to help clients maximize their travel budgets while still taking meaningful trips.
• Gen Z and millennials make up about half of all US travelers, with Gen Z’s share climbing from 8% in 2024 to 14% in 2025, according to Deloitte’s latest Travel Industry Outlook. Even with lower earnings, both generations travel at higher rates than older cohorts. How they plan and book trips is also changing the playbook: social media (especially short-form video) has become a primary discovery tool, and sustainability considerations increasingly influence lodging and transportation choices. Digital engagement matters more across the journey, from inspiration to booking to in-trip experiences. Millennials are leading in the use of AI for trip planning and tend to associate “luxury” with food-driven, family-friendly experiences. Gen Z, meanwhile, defines luxury around comfort, wellness, and amenities such as fitness and spa offerings. Together, these preferences are pushing travel and hospitality brands toward more digital-first marketing and personalized experiences designed to meet younger travelers where they are.
• The travel industry is moving away from competing on discounts and toward creating experiences that travelers feel emotionally connected to. As people seek more authentic and meaningful trips, destinations and travel brands are leaning on storytelling to showcase local culture, real communities, food, history, and sustainability rather than just prices and attractions. Marketing is shifting from short-term promotions to ongoing narratives across digital channels that build interest before, during, and after a trip. Loyalty strategies are also evolving, with more emphasis on exclusive access, personalized experiences, and insider moments instead of simple price cuts. Technology and data are helping tailor these stories to different traveler motivations, while responsible tourism has become central to how destinations define themselves. In an increasingly crowded market, travel companies that build genuine connections are more likely to turn visitors into repeat travelers and long-term advocates.

Industry size & Structure

The average travel agency operates out of a single location, employs 10 workers, and generates $4.7 million in annual revenue.

• The travel agency industry comprises about 7,475 firms, employs about 77,600 workers, and generates about $35.5 billion annually.
• The industry is concentrated at the top; the top 50 companies account for 70% of industry revenue.
• The industry includes national and regional chains, franchises, consortia, and independent operators.
• Large companies include Priceline, Expedia, and CWT (formerly Carlson Wagonlit Travel). Some large companies have international operations.
• Large franchises/consortia include Vacation.com, Travelsavers, and Ensemble Travel.
• Leisure travel accounted for about 62% of US travel spending in 2024, business travel accounted for 22%, and international travel represented 15%, according to the US Travel Association.