Online-only players have forced brick-and-mortar establishments to find niche markets.
(PRWEB) June 24, 2014
The Travel Agencies industry is growing once again, albeit slowly, as traditional brick-and-mortar travel agents reinvent themselves to remain relevant in an industry now dominated by online bookings. The rise of online travel websites such as Expedia and Priceline completely revolutionized the industry. Consumers can now research locations, compare prices, book travel and manage reservations without the assistance of an expert, negating the role of traditional travel agencies. This trend has been amplified since the recession, as consumers have remained price conscious and more likely to seek affordable travel packages online. Consequently, many brick-and-mortar travel agencies have been forced to find new markets and niches, such as serving the corporate sector or luxury travelers. As a result, the Travel Agencies industry is expected to grow just 1.2% per year on average to $34.2 billion over the five years to 2014, including growth of 0.8% in 2014.
About 60.0% of industry revenue is derived from sales of international travel packages to US residents. This figure has grown substantially over the past decade, as it has become more common for Americans to take international trips. International trips, especially those to exotic locations, generally involve more complicated arrangements that require the services of professional travel agents. According to IBISWorld Industry Analyst Andy Brennan, “The industry has benefited from an increase in travel to emerging economies, as consumers are more inclined to have their plans organized by a professional when there is uncertainty surrounding their destination.” The number of international trips made by US residents has increased 3.1% per year on average to 103.0 million over the past five years.
Continual improvement in the broader economy will boost the industry's prospects over the next five years as travel rates lift. “Growth in per capita income, rising consumer sentiment and declining unemployment will lead to growth in domestic and international travel,” says Brennan. However, consumers will continue to remain price conscious and more likely to book travel online. Many consumers are comfortable making their own travel reservations online and will be aided by improved web interfaces that allow for seamless transactions. This presents a significant challenge to the industry's thousands of traditional travel agencies, and online booking sites will continue to outpace brick-and-mortar operators. Overall, the industry is expected to grow during the next five years.
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IBISWorld industry Report Key Topics
The Travel Agencies industry includes businesses that sell, book and arrange travel, tour and accommodation services for the general public and commercial clients. The industry also encompasses companies primarily engaged in providing travel arrangement and reservation services, including online-only booking systems.
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