Travel Agencies
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,300 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.
Industry size & Structure
The average travel agency operates out of a single location, employs 11 workers, and generates $4.8 million in annual revenue.
- The travel agency industry comprises about 7,300 firms, employs about 80,300 workers, and generates about $35.3 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 66% of US travel spending in 2023, business travel accounted for 22%, and international travel represented 12%, according to the US Travel Association.
- Prior to the pandemic, business travel spending accounted for 26% of US travel spending, compared to just 14% at the end of 2021 and 22% in 2023.
Industry Forecast
Travel Agencies Industry Growth
Recent Developments
Dec 5, 2024 - Pricing Plateaus
- Producer prices for travel agencies fell 1.3% in September compared to a year ago after rising 6.8% in the previous September-versus-September annual comparison, according to the latest US Bureau of Labor Statistics data. Producers have lacked pricing power this year – with prices largely flat or falling – as pent up demand for travel in the aftermath of the pandemic cools. Industry employment declined 1.2% year over year in September and remains below pre-pandemic levels, while average industry wages at travel agencies jumped 15.3% over the same period to $30.71 per hour, BLS data slow.
- High-end cruising, solo travel, and trips to far-flung destinations are among the top travel trends for 2025, according to travel agency Fora. A fleet of new luxury ships is attracting cruise enthusiasts and even luring “never-cruisers” to test the waters with Aqua Expeditions, Explora Journeys, Four Seasons Yachts, The Ritz Carlton Yacht Collection among cruise lines to watch, per the report. For domestic solo travelers, Santa Monica, New Orleans, and Seattle top the list of cities, while London, Rome, Nice, Barcelona, and Mexico City are top international destinations. For more adventurous travelers, Kenya, Bhutan, and Chilean Patagonia and among the top far flung destinations in 2025. Fora’s “2025 Hot List” was created with input from the company’s leadership team, industry partners and thousands of travel advisors.
- A new survey of owners and managers of independently owned travel agencies found that the two greatest competitive challenges facing the industry today are suppliers of direct bookings and online travel agencies (OTA). Direct bookings, where consumers bypass agencies to book directly with providers, were named by nearly half (46%) of those polled, while 35% named OTA competition. The survey also examined the current economic moods in the US and its impact on the travel industry. The rising cost of travel, broader inflation, and economic uncertainty in a presidential election year are causes of concern for some agency owners. Almost a third (30%) of those surveyed say the rising cost of travel is a challenge, and 19% are apprehensive about a drop in customer spending. “In spite of the economic headwinds, we’re seeing growth in bookings for 2024 and into 2025,” said American Marketing Group’s (aka Travelsavers) Chief Sales Officer Kathryn Mazza-Burney.
- Advocates for travelers with disabilities say the FAA funding reauthorization bill passed in May will make flying safer and more comfortable for persons with disabilities, Travel Weekly reports. Aircraft accessibility issues in the bill include training requirements for workers who handle wheelchair stowage or assist flyers who use a wheelchair for boarding. Various accessibility measures in the law require the FAA to begin considering passengers with disabilities as it conducts tests to establish aircraft evacuation procedures and would eventually require airlines to provide appropriate seating for any flyer with a disability, according to TW. The bill requires passenger portals, including airport kiosks and airline and airport websites, to be accessible to flyers with varying types of disabilities, such as vision impairment. While many requirements won’t take effect immediately, they set the FAA and airline industry moving in the right direction. Disabled travelers are a major underserved segment.
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