Travel Agencies

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                                Coronavirus Update

                                Apr 18, 2022 - Traveler Mask Mandate Dropped
                                • The Transportation Security Administration will stop enforcing the Biden administration's rule mandating masks on planes, trains, and other forms of public transportation, an administration official said on April 18. The move came the same day that a federal judge in Florida struck down the mandate. US District Judge Kathryn Kimball Mizelle said the Centers for Disease Control and Prevention (CDC) exceeded its statutory authority and failed to properly justify its decision for imposing the mandate. The CDC had extended the mandate until May 3 just a few days before the mandate was struck down. The legal decision comes as COVID-19 cases have risen in a number of states due to the spread of the BA.2 subvariant of Omicron. The CDC said that it extended the mandate to evaluate the impact of the rise in cases on severe disease and health care system capacity.
                                • Unvaccinated travelers should still get tested 1-3 days before domestic travel and again 3-5 days after travel. They should stay home and self-quarantine for 7 days after travel or 10 days if they don’t get tested at the conclusion of travel. CDC discourages non-essential domestic travel by those who are not fully vaccinated.
                                • Many companies in the travel industry are requiring their staff and guests to show proof of vaccination, according to Conde Naste Traveller magazine. The rules are complicated, however, by ever-changing vaccine proof and testing requirements used by international governments, individual states, and the US Centers for Disease Control and Prevention. Many countries require proof of vaccination or a negative test result for travelers to enter and some, like France and Italy, also require vaccine proof for indoor dining and other activities. US cities like New York City, New Orleans, and San Francisco have also implemented city-wide vaccine requirements for access to indoor dining, recreation and entertainment venues.
                                • About 44% of travelers who rarely or sometimes used a travel agent before the pandemic are likely to turn to one in a post-pandemic future, according to a study by Sandals Resorts and the American Society of Travel Advisors released May. That's higher than the 27% of travelers who always or often used such a professional before COVID-19 altered the travel landscape. "We have a number of new clients that are booking with us and part of the reason is that it is so complex today to know where you can travel to, and it changes by the day," said Robert Herman, owner of Riverdale Travel.
                                • Many travel industry experts are recommending travel insurance for those planning trips, and travel agencies are likely to benefit. Experts say that travel insurance did not help travelers when the pandemic hit in 2020, but policies now treat COVID-19 the same as any other medical condition. “If you become ill before your trip, you’ll need a doctor’s note confirming your illness and that you are unable to travel to be eligible for benefits,” said Carol Mueller, a vice president at Berkshire Hathaway Travel Protection. “The benefits are the same regardless of whether you contract omicron, another variant of COVID, or any illness for that matter.”
                                • The Biden administration has said that there are no plans for a national vaccine passport or certificate of vaccination for the entire US, but states and foreign jurisdictions are taking positions on the matter. New York state, for instance, issues Excelsior Passes to residents who have been vaccinated or tested negative for COVID-19 so they can gain admittance to certain venues and events. Florida Governor Ron DeSantis, on the other hand, signed an executive order banning vaccine passports. The European Union is still developing official standards, while Israel requires fully immunized residents to furnish a paper or digital "Green Pass" to access public places like gyms, theaters and hotels. Several companies, trade groups, and non-profits are developing digital passports in-tended to show proof of coronavirus vaccination and testing status, but public health officials are urging policymakers to resist calls for digital passport systems. It is hoped by many that the passports will boost a variety of industries, including museums, zoos, and parks, by acting as a credential for access to facilities and events.
                                • Employment in the travel arrangement and reservation services industry increased 13% year over year in March but was down 32% compared to the pre-pandemic month of March 2019.
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