New Report: Travel Agencies See 28% Growth, $109 Billion in Bookings

For travel industry watchers and insiders, it's no secret that travel agencies are thriving.

To say that they've experienced a resurgence would be an understatement. But now, there's even more data to back up this development.

A newly released report from Phocuswright titled U.S. Travel Agency Landscape 2024 confirms that the travel agency market is booming due to strong demand, rising prices, and an evolving advisor landscape.

Underscoring this point, gross bookings in 2023 surged 28 percent to reach $109.7 billion, continuing the post-pandemic rebound, says the report. 

While the pace of growth is expected to moderate somewhat moving forward, travel agency sales are projected to rise another 9 percent in both 2024 and 2025, with leisure agencies leading the way and corporate travel agencies regaining ground.

Leisure vacation planning remains the strongest and most lucrative segment, accounting for 65 percent of agency sales, with high-end experiences, cruises, and tours fueling growth. 

Cruise sales, meanwhile, saw a staggering 152 percent increase in 2023, with travel agencies responsible for two-thirds of all bookings. 

And there's still more good news on the horizon for travel agencies: By 2027, agencies are projected to represent one-quarter of all U.S. travel sales.

Shifting Travel Advisor Landscape

In tandem with agencies reporting booming sales, the industry is also undergoing a shift in travel advisor demographics.

New entrants to the field are increasingly replacing those who are aging out and retiring, according to Phocuswright.

Also noteworthy is that home-based independent contractors continue to dominate, yet traditional agency offices are regaining their share. 

Technology and the Travel Advisor Industry

When it comes to the promotional efforts of travel agencies, marketing strategies continue to favor digital engagement, with email, Facebook, and Instagram leading the way. 

TikTok, a platform that was thought to be on its way out, is experiencing growing adoption, but it continues to remain secondary to other forms of social media. Meanwhile, generative AI awareness is high (86 percent), but adoption among advisors remains limited.

The Future Looks Bright

Looking ahead, the travel agency segment remains optimistic. Despite concerns over rising travel costs and airfares, 72 percent of advisors have a positive outlook on the future, according to the Phocuswright report. 

"With a growing market share, a resurgence in corporate travel, and a strong foothold in high-value segments, the U.S. travel agency market is well-positioned for sustained success," says the report.

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