Travel Industry Survey 2014
The value of the survey is found not only in looking at the overall image that emerges each year but in the way the big picture changes as a result of hundreds of tiny incremental changes in the individual responses. While the majority of the measures of this year’s survey closely follow those of last year, there are some shifts that provoke thought and some that perhaps should provoke action.
This, taken in isolation, might lead one to conclude that agents believe that professionalism is strategic to success. The first three could all be considered subsets of training and suggest a belief that, in the long term, service to clients is more important than focusing on supplier compensation. That client-focused approach would appear to be reinforced somewhat by other data showing that service fees account for 22% of gross revenue for agents.
But digging deeper into the numbers, there appears to be some evidence that the most profitable and successful agents pay equal attention to commissions and service fees. Using gross revenue as a measure, the larger the agency, the more likely they are to have a higher percentage of revenue from fees (up to 38% for agencies of $10 million or more, vs. 14% for home agents, who gross, on average, $384,000).
It turns out that successful agencies focus on fees, but not only fees. When we asked the agents who reported having the greatest revenue growth what they thought had contributed to their success, it turned out the common denominator was a focus on high-commission, high-margin products. They cited the need for flexible hours and the desires to be one’s own boss and avoid a long commute. And almost half of home-based agents surveyed had never known any other operating model; they have been home-based for as long as they have been travel agents.