The industry has struggled over the past five years due to the rise of internet travel booking.
New York, NY (PRWEB) May 31, 2014
The Travel Agencies industry has continued to struggle over the past five years as the traditional core services of the industry have been negated by the rise of internet travel bookings. The industry has been tipped on its head as consumers have increasingly flocked to online travel websites to research and book travel. According to IBISWorld Industry Analyst Andy Brennan, “Online booking agents now play a much larger role within the industry alongside traditional brick-and-mortar travel agents.” While revenue from travel websites is included in this industry, internet-based operators earn a significantly lower commission from their sales than brick-and-mortar travel agents. While the Canadian economy has recovered steadily since the recession, traditional travel agents have struggled as consumers and businesses remain price conscious. Overall, the industry has declined 0.2% per year on average to $1.8 billion over the five years to 2014. This decline is expected to continue in 2014, with industry revenue declining 0.9%.
Brick-and-mortar travel agents have been forced to reinvent themselves to remain relevant and competitive over the past five years as online booking engines have expanded their role. The number of brick-and-mortar establishments has declined over the past five years as consumers book online travel in droves. For this reason, many agents have sought to specialize in certain destinations or forms of travel to showcase the value they provide to travelers. Moreover, many forms of travel, especially complicated packages with multiple connections, are still best suited to traditional travel agents. For example, over 60.0% of cruises are still booked through traditional travel agents rather than online, according to travel analysts PhoCusWright.
Growth in per capita income, rising consumer sentiment and declining unemployment over the next five years will fail to boost the total output of the Travel Agencies industry. “To remain in business, brick-and-mortar operators will need to keep pace with consumer expectations and attempt to capture greater online reservations,” says Brennan. However, this will present a significant challenge as many consumers are now used to making their own travel reservations and will be aided by improved web interfaces that allow for seamless transactions. Over the five years to 2019, IBISWorld projects industry revenue will decline.
IBISWorld expects that the industry has a medium level of concentration. There are a number of large firms in the industry that control significant market share and earn billions in revenue annually. However, small independent and privately owned companies serving niche markets comprise the majority of players. Market share concentration has increased over the past five years as industry consolidation has intensified, especially with the growing online booking engines segment. Smaller players have banded together to use their combined knowledge to better serve new and existing clients.
For more information, visit IBISWorld’s Travel Agencies in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld industry Report Key Topics
The Travel Agencies industry acts as agents for tour operators, transportation companies and accommodation establishments in selling travel, tour and accommodation services to the general public and commercial clients.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.