Digital

U.S. Travel Agencies Trade In Storefronts for Home Offices

@SamShankman

May 09, 2014 1:00 pm

Skift Take

This study looks at the changing proportions of business models without taking into account the actual volume of agencies. The focus on market share rather than hard numbers hides the true health of the industry.

— Samantha Shankman

Free Report: The Changing Business of Extended-Stay Hotels

Andrew O.  / Flickr

The quaintness of high-street travel agent shopfront...remains quaint, and empty. Andrew O. / Flickr


U.S.-based travel agents are closing their storefronts and setting up home offices in large numbers.

The number of travel agency storefronts has dropped by more than 20 percent in the last four years, while at the same time, the number of one-person, home-based agencies and personal offices has jumped by more than 60 percent.

This is according to the latest member profile of the travel agency association ASTA, published in March 2014. The profile is reflective of the demographics of the 105,000 full-time workforce.

There are several drivers behind the shift in agency business model including the mounting cost of storefronts and office space during the economic recession, the rise of digital tools that allow agents to work from anywhere, and the rise of online travel agencies that changed how consumers think about booking travel.

“The first and obvious reason is that, just like any other business, there is an obvious cost savings and flexibility to working from home or telecommuting. There’s lower overhead and fewer liabilities,” an ASTA spokesperson elaborated.

“The second is that becoming an independent travel agent is the perfect career for anyone with an entrepreneurial spirit. There are so many ASTA members who started with one great idea on how to serve a niche market and then turned it into a full-time business.”

Retail Locations Persist

Although the number of retail locations with multiple employees is on the decline, it still accounts for the largest type of business model.

Today home-based agencies and retail locations with one or more employees account for about the same percentage of market share, at 35 percent and 38 percent each.

Current growth rates suggest the proportion of home-based agencies will quickly overcome retail locations.

Mixed Business Models

The fastest growing — but somewhat ambiguous — type of business model today is a mix of offices, retail locations, and home-based work spaces.

There’s been a 298 percent increase in the number of agencies reporting these dual business models, as well as a rise in the number of agencies reporting that they are now mobile and do business from around the country and world.

2010 2011 2012 2013 2014 %Change 10/14
Home-based Agency, One Employee 11% 15% 17% 18% 18% 61%
Home-based Agency, 2+ Employees 16% 13% 15% 13% 17% 6%
Independent Agent w Host Agency Affiliation 3% 4% 5% 5% 4% 29%
One Retail Location, One Employee 5% 65 5% 7% 5% - 2%
One Retail Location, 2+ Employees 41% 37% 35% 36% 33% - 20%
One Office Location, One Employee 1% 2% 1% 1% 2% 61%
One Office Location, 2+ Employees 10% 9% 11% 8% 7% - 30%
Multi-Locations 11% 10% 9% 9% 8% - 29%
Other 2% 4% 1% 5% 7% 298%

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