Travel Agents Continue to Dominate Cruise and Tour Sales

by Richard D’Ambrosio

While online travel agencies (OTAs) and supplier websites are increasingly growing their share of overall travel bookings, traditional travel agents maintain a significant share of cruise and tour bookings, and that share will increase over the next three years.

Traditional travel agent tour and package sales increased 4 percent in 2017 to nearly $9 billion and now represents 68 percent of total sales, according to Phocuswright's recently released U.S. Cruise and Packaged Travel report.

Travel agency share drops when Phocuswright adds in OTA dynamic packaging (e.g., Expedia bundles), but even then, agent market share still registers “a respectable” 46 percent of all packages sold in the U.S. (both online and offline).

When combining traditional vacation package and cruise sales, agency’s own 67 percent of the market, and Phocuswright expects that share to grow to 69 percent in 2021. “That's good news for a business that's constantly under threat from the growing forces of tech, and was once deemed obsolete,” Phocuswright said.

Travel agent cruise sales increased 5 percent in 2017, according to Phocuswright, “outpacing the overall travel market to reach $11.5 billion. Despite OTAs' earlier attempts at selling cruise, two thirds of cruise sales still go through traditional travel agents – and that's not expected to change much through 2021,” Phocuswright said in its report.

In comparison, traditional travel agencies and travel management companies own a 27 percent share of all U.S. travel sales, where 52 percent of all U.S. travel was still booked offline. “While this percentage is waning year after year, in some segments, offline isn't just the majority – it's dominant,” Phocuswright said.

Phocuswright said “travel agencies are thriving in two sectors that are leisure-only and more complex to sell. This indicates that consumers aren't making their purchasing decisions based just on channel, but on personal service and advice as well.”

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