Agency Revenues Rise in 2013, But ICs Lag
by Andrew Sheivachman /More than half of travel agencies reported stronger revenue, increased transaction volume and more clients in 2013 compared to 2012, according to ASTA’s latest member survey.
The results mark a trend, with two straight years of improved business results for agencies, ASTA said.
“A second year of strong growth shows that agencies are connecting with consumers who want to work with a travel professional,” said ASTA president and CEO Zane Kerby.
The findings are based on a January online poll of 449 ASTA members regarding their sales and revenue trends.
Two-thirds are profitable
For 2013, 55% of ASTA agencies reported an increase both in revenue and in number of clients, while 53% saw an increase in number of transactions.
Nearly two-thirds of respondents, or 64%, saw a profit in 2013, while less than a third of agencies broke even or operated at a loss. Average profits were 9% of total revenue, up from 7% in 2012.
Corporate agencies were most likely to realize a profit, and independent agents least likely to do so, ASTA found.
Among corporate agencies, 72% turned a profit in 2013, and just 4% operated at a loss.
Among retail/leisure agencies, 62% were in the black.
But just 57% of independent agents ended the year with a positive balance sheet, and 22% operated at a loss; 17% broke even, according to the survey.
Agents said they expected stronger profit in 2014, with retail/leisure agencies forecasting an 11% profit, independent agents a 13% profit and corporate agencies a 10%.
Corporate business strong
In terms of revenue and number of clients, corporate agencies also fared the best.
Sixty-five percent of corporate agencies reported increased revenue, and 57% reported increased clients last year. The fact that revenue growth exceeded growth in numbers of clients “suggests that individual corporate customers are traveling more,” ASTA said.
Air sales increased the most for corporate agencies, followed by insurance and hotel sales.
Sales by segment
Agencies saw sales rise for every travel segment rise.
Growth of tour and group sales was strongest. More than half of all agencies reported increases.
This was followed by insurance sales, which were up for 47% or respondents. Forty-four percent said they sold more cruises in 2013 compared to 2012.