Some Say Travel Agents are Dinosaurs, Destined for Extinction. PhoCusWright—and about $110 Billion in Travel Sales—Say Otherwise!
The last 12 or so years have not been kind to travel agents. The meteoric rise of online travel coupled with a debilitating erosion of supplier commissions had all the ingredients of a classic recipe for disintermediation. While the number of agency locations has declined and their market share has slipped, the story certainly does not end there. Facing significant upheaval in their industry, many in the agency community have responded...
According to the forthcoming report, PhoCusWright's Travel Agency Distribution Landscape: 2006-2009, the travel agency distribution channel represents a large and dynamic opportunity. Travel agencies account for nearly $110 billion in sales, or 41% of all travel booked in the U.S. With some 24,000 locations and a workforce of more than 100,000 strong, the travel agency landscape is large and complex, representing a dizzying array of retail business models, from corporate to leisure, from extreme specialization to general purpose, from large, global corporations with thousands of employees to thousands of independent small business owners and a surging population of self-employed entrepreneurs working from home.
PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 presents the first definitive sizing and analysis of this complex and dynamic market. Conducted in partnership with four leading travel industry organizations—American Society of Travel Agents, Airlines Reporting Corporation, Cruise Lines International Association and Performance Media Group—this report presents results from an extensive travel agent survey of approximately 1,900 agents and more than 60 in-depth interviews. PhoCusWright spoke to representatives from every spectrum of the travel industry, including storefront-based travel agents and home-based agents, agency owners and managers, travel suppliers, technology and distribution companies, and travel agency consortia, franchises and industry associations.
Although the agency community is large, it is by no means uniform. Critical differences across leisure agencies, corporate agencies and home-based agents exist in terms of the types of products they sell, the technologies and channels they use to research and book travel, their business models and sources of revenue, and their strategies and market positioning. The GDS, for example, has long been a mainstay of the typical travel agency, but key segments of the agency community are turning away from the GDS to supplier Web sites and other online tools to research and book product. PhoCusWright projects that 21% of all travel agency sales will be booked online by 2009.
Travel suppliers seeking to distribute effectively across the agency channel must understand which segments of the agency landscape are relevant for their business, and what are the key dynamics driving product selection and booking within those segments.
PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 takes an in-depth look at those key segments of the agency community, including leisure agencies, corporate agencies and home-based agents, and discusses the critical dynamics shaping this complex market. Key findings from the report include the following:
- Travel agents' market share by major product segment (air, hotel, car, cruise, tour operator) with projections through 2009.
- The total population of travel agency locations, including non-ARC agencies.
- Travel agents' booking methods—GDS, supplier Web sites, the phone—and how they vary by leisure agencies, corporate agencies and home-based agents.
- Travel agency business models and sources of revenue.
- Sizing and analysis of the surging home-based agent segment.
Report Methodology
Research for PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 was conducted in the second half of 2007 and consisted of three concurrent, rigorous phases:
- Market Sizing: In-depth interviews from more than 60 travel suppliers, technology companies, travel agencies, travel agency organizations and industry associations representing the full spectrum of the travel agency landscape in the U.S. PhoCusWright used this data to develop market size estimates, acquire supply-side perspective and generate trend analysis.
- Travel Agency Survey: Nationwide survey of travel agents to acquire agent and agency profile information, sales volume and business mix, and product research and booking behavior. PhoCusWright fielded the survey in partnership with the American Society of Travel Agents, Airlines Reporting Corporation, Cruise Lines International Association and Performance Media Group. PhoCusWright also acquired an additional database from IATAN (International Airlines Travel Agents Network).
- Comprehensive Data and Research Review: PhoCusWright undertook a review of all relevant travel industry research to assist and corroborate results from the market sizing and survey components, including filings from public companies and data from government agencies, leading travel industry associations and other third-party research.
PhoCusWright's Travel Agency Distribution Landscape: 2006-2009 is available for individual sale. Order by Friday, April 25 to save US$300 off the regular price.