Travel agency air sales are strong and growing, according to new findings from the Airlines Reporting Corporation (ARC).
Airline tickets sold in September 2019 by U.S.-based travel agencies increased 3.7% to $7.8 billion, compared to $7.5 billion in September 2018, ARC revealed earlier this month.
The total number of passenger trips using either direct or connecting flights during the same period also increased by 3.7%, to more than 24 million people. Meanwhile, U.S. domestic trips increased 4%, while international passenger trips grew 3%.
ARC found the average U.S. round-trip ticket price in September 2019 decreased to $496 from $498, compared to September 2018. During that time, sales of ancillary services, such as premium seats, preferred seating, checked bag fees, lounge passes, and early check-in privileges, jumped 23% to more than $6,682,000.
These results are based on monthly sales data ending Sept. 30, 2019, from 11,996 U.S. retail and corporate travel agency locations, satellite ticket printing offices, and online travel agencies.
ARC's success has been directly linked to that of the travel agency community, according to a recent white paper that explores the state of air travel distribution via the travel agency channel, in collaboration with Phocuswright.
The “Air Sales and the Travel Agency Distribution Channel” report is based on research and insights from Phocuswright's “2018 U.S. Travel Agency Distribution Landscape: 2016-2021,” which ARC both contributed to and supported.
“Air sales by agents are up and rising, and air remains the largest product category for travel agents. The number of agents charging fees continues to increase, providing another source of revenue on air sales along with commissions,” the report said.
Travel agencies are the dominant sales channel for airlines, generating 44% of air segment sales. Corporate travel agencies continue to sell significantly more air than leisure agencies, accounting for 26% of air sales versus 18% of air segment sales generated by leisure agencies.
On average, air sales comprise 65% of gross bookings for corporate travel agencies and 51% of gross bookings for leisure agencies, according to combined research data from Phocuswright and the Airlines Reporting Corporation (ARC). While just over half of leisure agency sales are airline tickets, the next largest segment is cruise (21%) followed by tour (16%).
According to the report, continued growth is likely over the next few years, with agent air sales volume expected to reach $71.2 billion in 2021.
“All of this spells out opportunity for airlines to increase sales through the travel agency distribution channel, particularly on the leisure side.”