The Takeoff Episode 02: How Startups Can Adapt and Pivot Sponsored This content is created collaboratively with one of our sponsors.
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.
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.
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.
|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%|