All Signs Point to Another Banner Year for Agency Community
by Dori Saltzman /If 2023 was a banner year for the travel agency community, 2024 is shaping up to be even banner-er.
In our third-annual six-month check-in series, we’ve never heard as much optimism as we did this year when speaking to executives from seven travel agency consortia, hosts, and franchise organizations. The year got off to a bottle rocket start, and while growth may be leveling off – a little – the general consensus is bookings, revenue, and advisor recruitment will all be well above last year’s highest-ever numbers.
(This is part one in a series based on conversations with seven franchise, host, and consortia executives. Read part two: Travel Agency Execs Expect a ‘Leveling Off’ but Say There Will Be No Plateau and part three: We Can Survive Anything, Travel Agency Execs Say.)
“We are coming off a banner year and we’re having a really good year,” Jackie Friedman, president of Nexion Travel Group told TMR. “We’re definitely seeing good, steady, solid growth. Our advisors are certainly busier than ever.”
Michael Johnson, president of Ensemble called it “growth upon growth.”
Avoya Travel is seeing the same thing, said the host’s chief sales officer Phil Cappelli. TMR spoke to Cappelli in early June and he told us, “Even just today, we’re running plus 12% over this day last year in total revenue.”
“The first four months were amazing for American Marketing Group,” said Kathryn Mazza-Burney, chief sales officer at TRAVELSAVERS [an AMG company]. “TRAVELSAVERS and NEST saw very nice growth in all segments of the business.”
Michelle Fee, CEO and founder of Cruise Planners echoed the others, while also expressing her surprise that business has been as good as it has.
“We really did think that demand for travel was going to somewhat slow down after an exceptional 2023,” she said, adding that the franchise turned the corner from 2023 into 2024 70% ahead of where they were the previous year.
Despite that, she reported that “…the book side of our business has not slowed down. It’s above where it was last year.”
Drew Daly, senior vice president and general manager of Dream Vacations agreed.
“It’s hard to believe where we are at in ’24. We are seeing the momentum continue from 2023… We continue to see impressive growth for both cruise and non-cruise products,” he said, adding that the growth over last year is “outstanding” as 2023 was Dream Vacations’ best year.
“I thought at some point the customer’s going to tap out and we haven’t see that,” Johnson added.
Signature Travel’s president and CEO Alex Sharpe told TMR he’s always optimistic at the start of each year, but this year, his optimism was guarded.
“It’s like comparing something to Michael Jordan,” he said. “Last year was pretty good. It was a record year.”
He said he’s particularly surprised at the speed and velocity with which cruise bookings have come back.
“I didn’t expect it to come back the way it has,” Sharpe told TMR. “It wasn’t that I wasn’t optimistic, but people were saying, will new-to-cruise ever come back after they [the cruise industry] has been vilified all this time.”
More high-sellers & higher-priced trips
Among the signs that executives pointed to as emblematic of 2024 as a banner year, is the growing number of top sellers. The number of Millionaire Club members at Cruise Planners, Fee said, has tripled since 2019.
Avoya is seeing similar growth. “Based on year to date data, Avoya is on pace to have a nearly 20% increase in Independent Agencies doing one million or more in global net sales by year’s end compared to 2023,” Cappelli said.
At Ensemble, the number of members earning more than they did the previous year keeps growing, Johnson pointed out. In 2022, 73% of Ensemble members earned more than they had in 2019. In 2023, 90% of members earned more than they had in 2022, and there are no signs of this number going down for 2024, Johnson said.
Virtuoso’s executive vice president, David Kolner, didn’t tell us about the number of the consortia’s top producers, but did comment on the growth in bookings of more than $50,000.
FIT bookings of more than $50,000 are up 86% compared to the same time last year. More astonishingly, cruise bookings of more than $50,000 are up 102%.
“On the cruise ide, it’s not just selling more World Cruises… it’s people buying longer itineraries, people buying more expensive cabins, and buying multiple cabins in the same boking.”
Growth curve slowing, some segment softening
Several of the executives we spoke with cited a slight lull in business in April. They also pointed out that the steep incline in growth is leveling out a bit.
Cruise Planners, Fee said, is not growing “as the same percentage rate that was in the year before, which makes sense. We were growing at 30 to 50%. It was crazy, so obviously we aren’t keeping that up.”
As for what’s leveling off, however, the executives shared different experiences.
TRAVELSAVERS and NEST is seeing plateau in contemporary cruise bookings, according to Mazza-Burney, as is Signature Travel, said Sharpe.
Mazza-Burney posited that some former contemporary cruisers are making the jump to premium brands because the pricing gap between the two segments has never been narrower.
But others said their contemporary cruise bookings are strong, particularly with short-break options coming online like Utopia of the Seas.
“We’re seeing an impressive percentage of business for travel within the next 90 days,” Daly said. “The short cruise product, there’s growth there.”
Friedman said that she’s noticed “Mexico fatigue” when looking at Nexion’s booking trends, and pointed out that corporate air has been down, citing the uncertainty around NDC as the cause.
While Daly didn’t cite a drop-off in Mexico or all-inclusive bookings, he told TMR he is seeing price softening in this segment.
“It’s not a big number… it’s still up over last year, but it’s softening,” he said.
Election worries?
When asked to look into their crystal balls for what they expect over the next six months, we specifically asked executives about how the see the election impacting travel buying. Just about everyone we spoke to was bullish.
“I expect that we could see some Q3 pressure based on political and global climate, however we are not seeing that play out right now,” Cappelli said.
“As we get towards Q4, we do expect a greater softening,” Daly said, but emphasized he still expects to see the year end higher than 2023 “Consumers that buy travel in October and November traditionally buy travel in October and November. So they’re going to be in that mindset.”
Virtuoso’s Kolner told TMR historical data shows the industry shouldn’t be worried.
“We have seen over the previous three election cycles, non-pandemic related, that growth is usually a little bit lower in the election year than it was in the year preceding the election. What’s important about this, is that although growth is lower, it doesn’t mean that sales are always negative in the election year. Only one of the three previous cycles was actually negative growth… So, no reason not to have a growth year in an election year.”
If there is going to be any impact, executives all agreed it will be felt in late Q3 and Q4, but none predict more than a minor – and fleeting – bump in the road.
“Even if there’s going to be a little bit of a valley because of an election, the peak will happen right after,” Fee told TMR.
Only Ensemble’s Johnson and Avoya’s Cappelli expressed the slightest concern over the election’s potential to slow down travel sales.
“The election is the 800 pound gorilla in the room… in the U.S. it’s anybody’s guess what’s going to happen,” Johnson said. “We know that there’s a relationship between how the Dow performs and what happens in luxury. And travel is very similar from a behavior perspective. Right now, we’re optimistic but we know it’s potentially out there.”
“I don’t want to guess that there’s going to be softening, but if we’ve been in this business a long time, it would make sense that there would be,” Cappelli added.
Johnson also pointed out that if there’s an election-related slump in the U.S., that could be mirrored in Canada as well.
“When the United States of America sneezes, Canada catches a cold. If there’s disruption in the U.S., it will absolutely impact what happens in Canada,” he said.
Future sales
One reason executives are so bullish, despite what the fall’s election might bring is the number of future sales already on the books.
“The most interesting fact about the first half of the year is future sales,” said Kolner. “For 2024 compared to 2023, our sales [for one to two years out] are up 49% year over year, which is an enormous amount. The number for cruise sales is actually up 52% for that same period.”
Cruise Planners is seeing similar future booking numbers, Fee said.
“At this point we typically would be booking 40% to 50% based on the week for the next year. And we’re like 60% for 2025.”
Dream Vacations’ Daly agreed. “We are outpacing where we were going into ’24 at this time. That’s strong and solid.”
So too, did TRAVELSAVERS’ Mazza-Burney. “If our numbers today are any indication, ’25 will be if not stronger, equal to ’24,” she told TMR.
Sharpe told TMR that any fears of the election have actually been “a bit of a blessing.”
“What I think the election has done is … everybody’s kept their foot on the gas a hundred percent to try and accelerate the position they’re in now… so that if there is a lull and distractions as a result of the election, we’re not trying to figure out in January how we sell q1, q2.”
Kolner pointed out that the strength in future bookings mirrors a trend towards longer booking windows that Virtuoso advisors are also seeing.
“In 2023, the average [booking window] was 102 days and in 2024 the average is 112 days.”