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 9,200 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.

Competition From Alternative Sources

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

Sensitive To Economic Conditions

The travel industry is vulnerable to economic change and variability in corporate and consumer spending.

Industry size & Structure

The average travel agency operates out of a single location, employs 7 workers, and generates $3.5 million in annual revenue.

    • The travel agency industry consists of about 9,200 firms that employ about 67,600 workers and generate about $33 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 Carlson Wagonlit Travel (Carlson Holdings). Some large companies have international operations.
    • Large franchises/consortia include, Travelsavers, and Ensemble Travel Group.
    • Leisure travel accounted for 88% of US travel in 2020, while business travel accounted for 12%, according to the US Travel Association.
                                Industry Forecast
                                Travel Agencies Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Mar 4, 2023 - Cruise Bookings Up Sharply
                                • This year’s “wave season” – the time of year when cruise lines offer package deals to attract passengers – is shaping up to be a blockbuster, Travel Weekly (TW) reported in February. Cruise line executives and travel agencies say that to date booking volumes this wave season – typically January through March – have eclipsed 2019 levels and set records. The cruise industry is seeing strong demand, higher prices and longer booking windows so far this year. "It's even better than we thought," said Michelle Fee, CEO of Cruise Planners, who said bookings in January were 81% higher compared with bookings from the same time in 2019. "The client isn't afraid of traveling anymore. They put their lives on hold for so long that they're ready to go." Viking Cruise Lines said January was the best single month for bookings, including the best single day, in its 25-year history.
                                • President Biden in his State of the Union Address took aim at travel junk fees, USA Today reported in February. While airline baggage and seat assignment fees, mandatory resort fees, and other ancillary charges annoy consumers, they are the lifeblood of the travel industry. Annual revenue from airline ancillary fees soared by 56% last year to $103 billion worldwide compared to 2021. Airlines levy these extra charges to cover things that used to be included in the ticket price. Similarly, hotel guests increasingly are asked to pay extra – above the room rate – for amenities like wifi, parking, shuttle service, and more. "We'll ban surprise 'resort fees' that hotels tack on to your bill," Biden said during his address. The president is calling on congress to pass a Junk Fee Prevention Act to limit or eliminate unfair and costly junk fees.
                                • Lead-generation data compiled by Travel Leaders Network suggests an increasing number of consumers want to work with travel advisors (aka travel agents), Travel Weekly reported in February. In 2022, travel agency association Travel Leader said its website delivered 214,345 leads to travel advisors, up 40% compared to 2021. Moreover, 20% of leads coming through came from consumers who had never before had worked with a travel advisor, according to its chief marketing officer Stephen McGillivray. That represents a 30% increase in new-to-advisor leads compared to before the pandemic. As the pandemic has subsided business, through online inquiries or telephone calls, has been rising for travel agencies of all types and sizes.
                                • A new position for a senior federal official focused on travel was established under The Omnibus Travel and Tourism Act that passed as part of the giant spending federal spending bill in December, according to the US Travel Association. The legislation establishes the position of Assistant Secretary of Commerce of Travel and Tourism tasked with coordinating tourism strategy across the federal government. Currently, there isn’t anyone in the federal government responsible for developing and coordinating this national strategy, according to USTA. In addition, the legislation formally authorizes the US Travel and Tourism Advisory Board, to collect data on domestic travel and tourism, mandate the development of a national travel and tourism strategy every ten years, and report on the effects of the pandemic on the travel and tourism industry.
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