Travel Agencies & Services Industry Profile

Companies in this industry arrange travel and traveler accommodations and include travel agents, tour operators, and other travel services like time-share exchanges. Major companies include Expedia and Sabre Holdings (both based in the US), Carlson Wagonlit (France),Transat AT (Canada), and TUI Travel (Germany).

Worldwide tourism revenue, which includes travel agency services, is about $1 trillion, according to the World Tourism Organization. Travel agency services are most prevalent in the countries that spend the most on tourism, including China, France, Germany, the UK, and the US.

The US travel services industry includes about 17,000 companies with combined annual revenue of about $40 billion. Moderate growth is forecast for the next two years. Consumer income and business activity are key growth drivers.

Travel agencies frequently mention their sales volume or "bookings," the value of the tickets they purchase for customers, a figure much higher than the revenue they receive in commissions.

COMPETITIVE LANDSCAPE

Demand is driven by business and leisure travel, which depends on the economy. The profitability of individual companies depends on marketing. Large companies have an advantage in being able to provide a wider range of services, especially to corporate customers, and to afford sophisticated websites. Small companies can compete effectively by providing service to a few large customers or by serving a local market. The industry is concentrated: the 50 largest companies account for about 60 percent of revenue.

Two ...