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$10+ Million Home-Based Agencies See Significant GrowthMarch 4, 2009 By: George Dooley
A recent survey of ASTA members found that there has been a steady shift in both the size and location of travel agencies in recent years. The 2009 ASTA Agency Profile report found a significant increase over time in the number of agencies with sales of either less than $1 million or greater than $10 million, up almost 69 percent and 127 percent respectively since 2002.
ASTA reported that at the same time, since 2003 the percentage of agencies located on “Main Street” and in strip malls is decreasing (down 31 percent and 35 percent, respectively), while the number of agencies located in homes (295 percent increase) and high-rises (24 percent increase) is on the rise.
“Even though the travel industry has been battered by the economy and a host of other factors, this report lends proof to the fact that travel agencies are resilient and quick to respond to market factors, be it moving from a storefront to a home-based location, or joining forces with other agencies to increase market share,” said Chris Russo, ASTA president and chair.
Other data of note from ASTA include:
• The oldest agency in the survey was established in 1920 and the newest was established in 2008.
• The average agency has been a member since 1990; ASTA’s oldest member agency joined in 1930.
• The vast majority of agencies still operate with one or two employees. Overall, agencies average 9.3 full- time employees, 5.9 part-time employees, 28.5 independent contractors.
• Between 2002 and 2009, the percentage share of average air sales dropped 30.1 percent. Car rental also saw a similar decrease in percentage share during the same time period.
• Only 39.1 percent of ASTA agencies realized a profit in 2008, a decrease of 13.6 percentage points compared to 2007.
• ASTA agencies report that leisure products make up an average of 75.8 percent of total sales while domestic travel makes up an average of 50.1 percent.
• 84.4 percent of ASTA members belong to a consortia and/or franchise.
• The majority of business communications with clients is conducted by phone. However, the trend clearly shows the percentage of phone communications dropping as the percentage of business conducted by Internet increases.
The ASTA Research Family is comprised of a representative sample of ASTA member travel agency owners and managers. The report indicates a 95% confidence with an error rate +/- 3.8 percent. The ASTA Agency Profile report can be downloaded at no charge.