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 8,600 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
Industry Forecast
Travel Agencies Industry Growth
Source: Vertical IQ and Inforum

Recent Developments

Feb 5, 2024 - Prices Rose in 2023
  • Producer prices for travel agencies rose 3.2% in 2023 after climbing 6.6% in 2022. Employment by travel agencies grew by 8.3% from the start of the year through November. However, employment in the industry remains well below pre-pandemic levels. Meanwhile, average industry wages dipped slightly (0.5%) from January through November to $28.40 per hour.
  • The United States ranks 17th out of 18 top travel markets in terms of global competitiveness, according to Euromonitor International. Only China performed worse according to the study released by the US Travel Association in January. The USTA blamed decades of underinvestment and a lack of focus and coordination from federal policymakers for the nation's poor performance. While the US is still the most desired destination for global travelers, it slid to third in total visits (behind Spain and France). In 2023, it’s estimated the US welcomed nearly 67 million international visitors – down from 79 million visitors in 2019, and only 84% recovered from pre-pandemic levels, far behind other competitors’ recovery rates, according to the study. Countries were ranked by national leadership; brand & product; identity, security & facilitation; and travel & connectivity with the US underperforming in national leadership, and identity, security & facilitation.
  • The number of longtime travel agents/advisors has dropped precipitously in recent years, according to Travel Weekly’s annual Travel Industry Survey out in November. In 2021, nearly half (46%) of survey respondents had been in the industry for more than 30 years. That number sank to 16% in 2023, meaning nearly a third of experienced agents have left the industry, according to the survey. At the same time, the industry is attracting new entrants: In 2021, only 5% of those surveyed reported being in business for two years or less rising to 19% in 2023. However, the average travel advisor's earnings are low with 39% making less than $25,000 per year. The majority (80%) of new entrants, those in the business for two years or less, reported an income below $25,000, TW reports.
  • US cruise companies are signaling that voyages will get costlier in the coming months, Reuters reported in August. Aggressive discounting in the wake of the pandemic to get passengers back onboard made cruising a relative bargain given soaring airline fares and hotel rates. However, Royal Caribbean Cruises and Carnival are among the leading cruise companies looking to hike prices as occupancy levels approach pre-pandemic levels, according to Reuters. In a recent earnings call, Carnival's CEO told analysts the company is “working hard to close the outrageous and unwarranted 25% to 50% value gap to land-based offerings over time.” A sharp rise in onboard spending has helped to compensate for low fares. However, rising labor costs, marketing, and port and freight expenses are offsetting gains from robust demand and rising prices, spurring operators to hike prices.
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