More than half of the travel advisors participating in a recent American Society of Travel Advisors (ASTA) survey said that the travel industry economy was doing better this year, and that their business was doing better as well.
In the survey, conducted in July, 56% of advisors polled said “the financial health” of their business was doing better, and 53% feel “the travel industry economy is doing better.” However, only 47% said they feel the overall economy is doing better.
While ASTA did not draw a direct correlation, it noted that 66% of those travel agents who book cruises several times per week or more “feel the financial health of their business is better than 12 months ago,” compared to 48% of those who book cruises less than weekly.
In the second part of ASTA’s 2019 How America Travels study, the society surveys U.S. travel advisors. The survey, conducted for ASTA by the Institute for Association and Nonprofit Research and sponsored by Carnival Corporation & plc, included 1,062 agents, of which 52% are independent travel advisors and 48% are employees of an agency.
ASTA said 30% of the respondents have gross sales of less than $500,000, while 12% have 25 million dollars or more in gross annual sales, with 76% of travel advisors reporting that 75% or more of their business is leisure bookings.
Some 33.6% of the average respondent’s annual sales come from cruise bookings (more than any other source), while tour packages and all-inclusive resorts represent another 14.1% of gross sales. Air and hotel account for about 10% of total sales each, while travel insurance contributes 6.3% of gross revenues.
As expected, independent advisors have smaller annual revenues than agencies do. According to the ASTA study, some 74% of independent advisors have annual sales of less than a million, with 50% reporting annual sales of less than $500,000.
Among agency owners, 55% have annual gross sales between one million dollars and 25 million dollars, with another 20% reporting more than 25 million dollars in annual gross sales.
Some 85% of the respondents who reported less than 5 million dollars in gross annual sales told ASTA that more than 75% of their business is leisure focused. Conversely, only 53% of respondents reporting 5 million dollars or more in sales report their business is focused heavily on the leisure market.
Despite the positive outlook, the future appears less sanguine, advisors told ASTA. When asked, “Thinking ahead to the next 12 months, do you think each of the following will be better, worse, or about the same?” only 32% of respondents said they feel the overall economy will be doing better, with 48% saying the economy will be about the same. One out of five are concerned the economy will be doing worse.
Some 48% of advisor respondents believe that the travel economy will be about the same next year, while 40% believe it will be better, and 12% are worried it will decline.
In regards to their own agency’s financial health, agents are more positive – 50% feel it will be better, 43% predict it will be about the same, and only 7% feel it will be worse.
Demographic shifts continue
Most respondents (73%) were at least 55 years of age. Only 2% of the survey’s respondents were between the ages of 18 and 34. Slightly more than one in four advisors (26%) responding to the survey have less than six years of experience, with another 18% having 6-10 years of experience.
The survey underscored the way the advisor profession has changed since airline commission caps, as 73% of travel advisors with less than 20 years of experience are independent advisors, versus agency employees.
Agents reveal cruise line booking motivations
ASTA also asked a series of questions to respondents about their satisfaction with selling cruises. According to respondents, the top three factors driving their satisfaction are: Present the best value and experience for their clients (96%); great sales team support to resolve issues (95%); and helpful BDMs (87%). Additionally, competitive commissions were rated as important by 87% of respondents.
When asked, “At the time of sales, how important are each of the following in determining which cruise brand you or your advisors recommend over other cruise brands?” Ninety-three percent of the respondents to the survey said either the client directly asks for it, or the agent assesses the right fit based on the customer’s budget.
Promotions are important in 87% of agent recommendations, followed by “existing business relationship” with a cruise line (84%), familiarity with a cruise line (83%), and personal experience with a cruise line (82%). Commissions and override commissions came in as important to 79% of respondents.
Ninety-five percent of respondents to the survey said that referrals were their most important marketing activity for cruise sales, followed by client appreciation events and email campaigns (60%).
Forty-three percent of agents participating in the survey said that Facebook was important for their cruise marketing, while Instagram was rated important by just 31% of respondents. However, 61% of travel advisors between the ages of 18 and 54 feel Facebook is effective, compared to 36% of those ages 65 and older, ASTA said.