Research firm Phocuswright recently released its U.S. Travel Agency Landscape 2024 report, which reveals record sales for travel agencies over the past few years.
According to the survey, travel agency bookings rose 28% in 2023 (following an annual gain of 102% in 2022) due to high prices and strong post-pandemic demand, with leisure bookings accounting for 65% of the recovery. But corporate travel agencies are also on an upward trajectory; by 2027, they will be responsible for 36% of all travel agency sales (up from 35% in 2023).
Editor’s note: Phocuswright is owned by Northstar Travel Group, the parent company of TravelAge West.
Our Analysis: Travel Agency Growth Factors Include New Entrants to the Market
A part of travel agencies’ impressive evolution comes down to recruitment. Although the markers of a “typical” travel advisor haven’t changed over the past year (eight in 10 are female, with the majority over the age of 55), new agents are continuing to replace retirees: 35% of respondents have been selling for under five years, and 6% have sold for less than one year, with personal income increasing with experience.
Another surprising finding? The traditional agency office/storefront is attracting more employees. Twenty percent of those surveyed work in an office or storefront, up from 12% in 2023 (nearly two-thirds remain home-based).
As an industry, we must be committed to attracting new advisors — an effort that should be coupled with campaigns for increased consumer awareness — to ensure that business remains in growth mode.
Fast Facts: More Findings From the Phocuswright Report
- Consumers who use travel advisors are typically older and wealthier than the average traveler, with 73% of clients over the age of 40 (58% have an income of at least $100,000).
- Personal relationships, travel expertise and customer services are selling points for travel advisor services, according to those surveyed.
- Pricing is not a prime motivator for a client to use a travel advisor, according to the report, with just 3% of advisors reporting that travelers primarily come to them for the best price.
- Travel advisors primarily attract new clients via their social media and websites. To keep up relations with current clients, email is the most popular marketing tool.
- Travel advisor specialties include family travel (90%), luxury travel (74%), adventure travel (61%), affinity group travel (47%) and theme parks (39%).
- About three-quarters of agency revenue comes from commissions/overrides.
- Ocean cruising, all-inclusive hotels and air bookings make up the highest share of travel agency bookings (comprising 58% of gross bookings).
- Over the next year, advisors expect an increased cost of travel (72%), higher airfare/fees (61%) and airport hassles/delays (46%). Despite this, 72% of agents have a positive outlook on the future of the landscape.
- The report featured responses from 1,571 travel advisors who either work for or own a travel agency. The study was conducted between Aug. 9 and Sept. 2, 2024.
What They Are Saying: The Channel Is Well-Positioned to Thrive
“We are looking forward to seeing the continued, albeit modest growth, in the next few years for travel advisors, especially as travelers seek luxury and more niche experiences,” said Alicia Schmid, director of research, consumer, for Phocuswright. “As the industry continues to embrace more advanced technological tools, older agents retire, and younger agents come on board this channel is well-positioned to embrace these tools helping them to expand their reach and provide their clients white glove, custom experiences starting at the trip planning stage.”
