III. Industry Analysis
In recent years, many travel agency franchises have grown primarily due to their specialization in selling cruises and other complex travel packages that often cannot be booked directly online. Also, over 60% of travel agents are now home-based, a trend that has increased industry profit, as home-based operators have less expenses than traditional brick-and-mortar businesses. The industry’s key drivers include:
– International trips by US residents: The departure of US residents to international destinations is a key driver of this industry. US residents use travel agencies to book airfare, cruise ships, accommodations and tour packages, driving industry growth.
– Consumer spending: Changes in consumer spending affect how much individuals spend on travel-related expenses. As consumer spending increases, travel spending is likely to increase as well, which bolsters demand for the travel agencies that book those trips.
– Domestic trips by US residents: Trends in residents traveling within the United States on overnight trips for vacations, business or other purposes are key factors influencing revenue for this industry. An increase in domestic trips by US residents typically benefits travel agencies, since they may use travel agencies to book those trips.