Travel Agencies & Services Industry Trends

Consolidation

The number of travel agencies has decreased in recent years as large agencies have grown through acquisition. Navigant was initially formed out of a merger of four companies, and it acquired 33 additional agencies from 1997 to 2000. In the retail and distributor industry segments, larger size is valuable for distributing travel products that the company can buy at discounted prices, much like stock brokerages. As agencies grow, they often enter into arrangements with hotels, cruise lines, and airlines to promote and favor their services.

Computerization

Most operations of travel agencies are now computerized, whether an agency works directly with the large reservation systems like Sabre and Galileo/Apollo, with proprietary or licensed software that hooks up to these systems, or with Internet versions. So far, most agencies operate their own Internet websites mainly for promotional and informational purposes, but many allow customers to search for cruise and tour packages and book reservations.

Service to Upscale Customers

An increasing number of agents serve upscale clients, offering services that come with added fees. Travel agents who cater to higher-income consumers may receive commissions of about 15 percent from companies that create vacation packages and other expensive travel services.