Agents in West See Growth

As 2003 comes to a close, indications suggest an upturn has taken hold in the travel industry

By: Lisa Jennings

In one of the strongest signs yet of the improving travel market, agents in the West say they expect 2003 sales to top last year’s, and the outlook for next year is even better.

In an exclusive TravelAge West survey conducted by NTM Research, 53 percent of all respondents said they expect year-end agency sales to top 2002 figures, with nearly half of those saying sales would be up 10 percent or more.

And nearly 75 percent of respondents said next year’s sales would be even higher as a gradual recovery in travel gains momentum.

The agent forecasts mirror dozens of national economic and industry indicators suggesting that after two years of turbulence, the travel industry is poised for strengthening growth, particularly in the West.

American Express’ annual travel survey in October found that Western travelers plan to spend $2,990 on average on long pleasure trips next year, up more than $400 from this year and higher than the national average.

The signs are welcome relief for travel agencies in the West, who, after bucking a nationwide drop in agencies in 2001, appear to have felt some ripple effects of the Sept. 11-related decline in travel the following year.

According to the most recent data available, 2002 revenues nationwide for agents dropped 12 percent; in the West, they dropped about 16 percent, to $38.8 billion.

The Harris Interactive survey also found that the number of agencies nationwide dropped 11 percent; in the West, they also dropped about 11 percent.

The data, while among the first available reflections of the turmoil agencies in the West have experienced, does not reflect a relative stabilization that some in the industry say has occurred since 2002.

And because the survey only tallied ARC-appointed agencies, it does not reflect the rapidly growing number of home-based independent agents in the West, as well as those agents and agencies who simply have stopped selling airline tickets or have found alternative technologies to ARC for air ticket sales.

Even without those two positive notes, the survey demonstrates the relative strength of the Western ARC-appointed agencies that were tallied.

Agencies in the West accounted for just over 30 percent of total agencies in the nation in 2002, and their total revenue accounted for more than 31 percent of the total nationwide agency revenue of $119.7 billion.

As 2003 comes to a close, there are no firm numbers yet available on how agencies in the West have fared, but the general belief and indications suggest that after a tough first seven months, an upturn has taken hold.

At ASTA’s annual conference in Miami in October, the mood was optimistic among agents and suppliers who attended, many of whom reported an upswing in business in recent months.

Ed Fioravante, sales executive in marketing for the Las Vegas Convention and Visitors Bureau, said visitors to the city are nearing pre-Sept. 11 levels.

Hotel occupancy rates are above 90 percent in Las Vegas, and the average room rate in September was $78, up from $73 the same month a year ago. New service from Song, JetBlue and other airlines also has boosted arrivals.

For agencies in the West, many have grown stronger, adapted wisely and are poised to capitalize on the growth ahead.

In the recent TravelAge West survey, 40 percent of agents in the West said they have added features to their Web sites this year; 36 percent have increased service fees.

About 33 percent said they reduced staff, while 18 percent said they have added staff; and 17 percent said they have formed strategic alliances and partnerships.

The TravelAge West e-mail survey, conducted Nov. 10 to 17, questioned 18,000 agents who read TravelAge West. A total of 385 agents replied, for a response rate of slightly more than 2 percent.

As the industry recovers, however, experts warn that its health remains tied to continued economic growth and no further terrorist acts.

John Hawks, president of the Association of Retail Travel Agents, said agencies in the year ahead will continue to need to focus on specialization, marketing and constant improvement.

“The great unwashed middle ground of sales seems to be fading as big online agencies and others get more bold,” he said.

“For their future preservation, two, three, four years from now, it has to be this year that agents really put this into action,” Hawks said. “They’ve got to become a local expert in something.”