PLAN YOUR TRIP
The rise of search engines and online travel bookings has caused the travel agency industry to plummet in the 2000s, but things may not be as cut and dried as they seem. The statistics in this article suggest that the industry is, in fact, making a steady recovery, as the years pass.
Collectively, travel agents are expected to generate $17.3 billion by next year, substantially more than they did a decade ago. But where does this revenue come from? Recent research suggests that many people, including over half of millennials are inclined to hire experts when planning trips. Customers benefit from the efficient planning and expert knowledge of travel companies and feel that booking this way helps to save time and avoid costly mistakes.
Read on for more on this industry as we take a dive into the statistics below.
By 2020, the industry is expected to generate $17.3 billion, which is up from about $12.2 billion back in 2010.
When booking air travel, 43% of people prefer to book through agents.
The number of full-time travel companies in the U.S. plummeted from a high of 124,000 in 2000 to roughly 74,000 in 2014 according to the Bureau of Labour Statistics.
The number has bounced back up to 81,700 today but the government projects a further 12% decline by 2026.
Over half of those that booked through agencies said their experiences were better than those that were planned alone, without an agent.
Top travel companies often collaborate with hotels and restaurants to ensure mutual growth. For this reason, commission acquired from associates makes up 78% of the revenue in this industry.
Digital services are so popular today that digital travel sales have increased to $180 billion in just the United States. It is forecast to be $213 billion by 2020.
Agencies can save customers on average $452 per trip as they have access to promotions and deals from suppliers that travellers do not.
According to the 2015 Census, there are 105,085 travel agencies in the U.S.
66% of travellers say that their agent helped them avoid costly inconveniences and mistakes.
55% of travellers have said that they must have sought out information from too many sources before deciding.
55% of Millennials are inclined to hire travel experts to help with planning their trips, while only 28% of Baby Boomers say the same.
One third of international travellers have an interest in using digital assistants to research or book their trips.
33% of Millennials are planning to hire travel agents in the next two years.
Agent numbers increased by 10.3% from 2014 to 2016, yet the Bureau of Labour Statistics still forecasts a decline.
As of 2015, the Census Bureau found 105,085 travel agency employees in the United States.
As of January 2019, travel network Virtuoso has 17,500 advisers, up 15% year over year.
Some growth is a result of new agencies joining the Virtuoso network.
64% of Virtuoso’s growth comes from new advisers joining existing agencies.
The consolidated dollar value of airline tickets sold in the first half of 2019 by US travel agencies increased by 3.38%.
In the first half of the year, there was a 2.4% increase in passenger trips settled by ARC for US agencies for a total of 162 million.
Over the past ten years, the UK OTA market has grown from just over 10% of the market to approximately 67%.
On the surface, it looks as though the industry is in decline, with the total number of full-time US travel operators falling from 124,000 in 2000 to around 74,000 in 2014. Much of this is thought to be a result of search engines and other online tools opening up options and making information more easily accessible for customers. However, after researching the industry and analysing agent numbers, it seems things are changing. From 2014 – 2016 the number of agents increased by over 10%, while travel network Virtuoso reports a 15% year on year increase in advisers in 2019. It looks as though the industry could be making a comeback.
But how are all these travel agencies performing? The consolidated dollar value of airline tickets sold in the first half of 2019 by US travel agencies increased by 3.38%, suggesting increased ticket sales, or perhaps just increased ticket prices. In the UK, the online travel agency market has seen a significant increase to around 67% of the overall market over the last decade. These statistics certainly seem to point to a positive future for the industry.
The number of consumers now booking through a travel company is at its highest point in the last three years, reports the American Society of Travel Agents.
The proportion of direct website bookings fell from 79.2% in 2017 to 66.7% in 2018, while marketplace bookings increased to 9.1%, from 3.2%.
In addition, agent, affiliate and local tourist office bookings also increased from 17.5% to 24.3% in the same time period.
Of those who have been previously been on a cruise, 35% booked their most recent trip through an agent.
Airline ticket sales through traditional agencies grew by 1.8% from August 2015 through to August 2016.
With the industry expected to generate $17.3 billion by 2020, up from about $12.2 billion in 2010, travel agency revenue looks to be growing over time. The American Society of Travel Agents reports that the number of people booking through agents is at its highest point in the last three years, which suggests the number of agent bookings is also experiencing growth.
Additionally, airline ticket sales through traditional agencies have seen a relatively recent increase of 1.8% from August 2015 – 2016. This could mean that agent sales are growing in line with the increase in bookings and the industry as a whole.
On average, 78% of travel agents’ revenue was made up by commission, with 22% generated by service charges.
53% of agents did not charge a fee in 2018.
In 2016, the average fee for corporate air was $33.
The top 5 hosted agent service fees were for domestic air (55.7%), international air (51.5% FIT (28.7%), rail (15.9%) and air-inclusive packages (15.3%).
According to the 2018 Hosted Travel Agent Fee Report, the top hosted charges were for domestic air, international air, FIT (Flexible Independent Travel), rail and air-inclusive packages. This provides good insight into how they make their money, however, surprisingly 53% of agents did not charge fees in 2018. Commission and charges aside, the agents make money through pricing up fares, commission and for the bigger agencies, compensation awarded for reaching pre-determined sales goals.
The average fee in 2016 for corporate air was $33 according to the ASTA Service Fee Report. This provides an idea of roughly what agents can make per booking through these extras.
The most commonly cited reason for why travel operators are bouncing back is that they help customers to save time.
They can save customers on average $452 per trip as they have access to exclusive deals.
63% of people say that the overall travel experience is improved by working with a travel company.
66% believe travel operators help travellers avoid costly inconveniences and mistakes such as choosing the right airport.
It’s unlikely that travel companies would be popular if they provided no benefits over other booking methods, so what are the travel agency advantages that continually sway customers away from booking directly? In recent years and based on a survey of 14000 households, the American Society of Travel Agents,(ASTA), found that when asked why they are bouncing back, the most commonly cited reason was that they save customers’ time. In today’s busy society, it’s unsurprising that this is such an important factor to trip planners, as spending a long time can lead to frustration. Being able to outsource this to an agent would be a benefit to many.
The ASTA survey also found that around two-thirds of people believe that one of the benefits of a travel operator is that they help travellers avoid costly mistakes when booking. With holidays and travelling experiences being highly anticipated and often expensive, travellers will do all they can to steer clear of potential issues and inconveniences. Outsourcing the booking to a travel expert like an agent can put customers at ease.
Another benefit is that a travel company can help people book specific, tailored experiences for their travels. This is something that 55% of Millennials are taking advantage of as they strive for “transformative travel” that will change them for life.