Future of travel agencies: both small and large expected to dominate
The future of the travel agent business: increasingly dominated by one or two employee agencies though four large groups now dominate the industry and control three-quarters or 75% of the market.
So says research firm IBIS World.
Those four are Carlson Cos., American Express, Expedia and Priceline.com, said the report called "Travel Agencies in the US."
The top four industry agencies "tend to dominate the domestic and international business and holiday travel business at the national, and increasingly international, level," the report said.
But the report found strong growth in agencies at the other extreme, or with less than $5 million in annual revenues.
After a slowdown in recent years, the industry is set to return to growth. The report says that growth will be driven by internet technology as consumers increasingly choose online travel agencies for flexibility and efficiency.
"The era of storefront travel agencies is entering a long-term decline and being replaced by online services, which offer a relatively high-profit, low-cost way to handle transactions," the report said.
However, IbisWorld also found that travel agency profit margins are low, at 7.6%, "reflecting the high level of competition in the industry."
By David Wilkening
David
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