The global travel and tourism industry has been growing at a rapid pace inviting new businesses and providing a fertile space for the existing travel businesses to thrive. In fact, it is estimated that travel agents collectively would generate a revenue of $17.3 billion by 2020. This is because almost half of the population around the world rely on travel agents to plan their trips so as to leverage experiential travel while avoiding costly mistakes and wastage of time. Therefore, for every business owner pondering over the question ‘I Am Planning To Launch A Travel Agency, Is It Profitable In 2020’, here are a few trends that would answer your question.
- The market of global tours and activities is expected to reach $183 billion while the travel industry is expected to reach $17.3 billion by 2020.
- About 43% of travelers prefer booking their air travel through travel agents.
- The online travel sales in the US have increased to $180 billion and expected to rise to $213 billion by 2020.
- 55% of travelers refer to various sources for information before making their bookings.
- 33% of Millenials are expected to hire travel agents in these two years for their travel bookings.
How Do Travel Agencies Earn?
Reports by the American Society of Travel Agents suggest that the number of travel bookings through agents has been growing and in the last three years, the highest number of people booked their travel through agents. This implies that the revenue of travel agencies has been increasing. So how do the travel agencies generate income?
On average, travel agencies earn 78% of their revenue through commissions and 22% of revenue through service charges. Further, the major sources for travel agents to earn the service fees are international air being 51.5%, domestic air being 55.7%, air-inclusive packages being 15.3%, FIT being 28.7% and, rail being 15.9%. Moreover, travel agencies also earn revenue by increasing fare prices or earning compensation by achieving sales goals.
The above stats would give you a slight idea about how the travel trends are shaping up the future of the travel industry. However, it is essential for every travel business to get a travel portal developed so as to increase their visibility and access a wider customer base.
Why Should You Go For An Online Travel Agency?
As per forecasts, the online travel market is expected to grow to $1,091 billion by 2022. The success of the online travel market can be credited to the increased use of smartphones and the huge dependence of people on their devices to make their travel bookings. Many argue that travel agents are better than online travel portals, however, that may not be very true. Online travel portals prove to be better than merely having a travel agency for various reasons. And therefore, having an online presence is imperative for every travel agency. Here are a few reasons why!
- Convenient & Time-Efficient – A large number of travelers are shifting to online travel portals to make their travel bookings as they can do it at their convenient time and also save on travel costs.
- Wider Options – Online travel agencies integrate travel APIs and GDS with their system which provides access to customers to view a wider inventory of air tickets, hotels, cruises, etc. Travel agencies may find it difficult to provide such options to customers without GDS integration services.
- Deals & Discounts – Online travel agencies provide better deals and discounts to customers and also provide booking credits to loyal customers. Customers tend to book online using these deals rather than asking travel agents for discounts on their prices.
- 24*7 Customer Support – Providing a 24*7 customer support to travelers even when they are traveling is easier when the customer has your travel app installed on his phone. The customer service can be provided through chatbots or even real agents.
- Reviews – Travelers may find it difficult to trust the service quality provided by travel agents, however, the reviews and ratings provided for each listing on a travel portal give travelers the confidence and ease in completing their bookings.
Will Your Travel Business Be Profitable in 2020?
If you are planning to launch your travel agency and are wondering if it is profitable in 2020, the answer would be affirmative. However, whether your business will succeed and generate profits depends on certain factors. Apart from having an idea and a few strategies, you need to also grab the right market opportunities at the right time.
- Enter a Unique Niche – As a startup, you shouldn’t try to be all over the place. This would make you enter a competition with businesses that are already performing very well and have a stronghold in the market. Research and analyze the market as well as the travel behavior to offer something unique and a more experiential travel service to your customers. For instance, many travelers are inclined towards Eco-travel and prefer booking accommodation or eating at restaurants that are Eco-friendly.
- Get A Travel App – Having a travel application for smartphones and web is essential for an online presence, to increase traction and customer base. A travel application will facilitate your customers with an easy booking process and provide them the convenience to book their trips from the comfort of their location. Hire a travel application development company to create an outstanding app for your business.
- Use Social Media – One of the best ways to increase your brand visibility is through customer engagement of social media platforms. Post regularly on social media, promote your business by offering exciting deals and offers, and campaigns. A large percentage of people et influenced by what they see on social media and make travel plans accordingly.
- Learn tips from the best – Look into the strategies and techniques that the leading brands in your domain have been using to attract or retain customers. You can experiment with these tips or apply your own strategies as per the business needs.