Travel agencies analysis and their functions. I wrote about the differences between a travel agent and a travel professional in an earlier blog. I explained how the role of travel agencies have changed because of the internet. In this edition I will focus on the different types of travel agencies. There are approximately 64, 000 travel agencies operating in the US, according to IBIS World. That number comprise of the Independent Travel Agencies or traditional agencies, host or chain agencies, consortium-affiliated and home-based agencies.
Types of travel agencies
The independent agencies are unaffiliated with any larger institution. They are the mom and pop brick storefront. These agencies can be large or small and are usually very familiar with their community. The smaller agencies are at a serious disadvantage because of their size. They have no bargaining power with their suppliers. Therefore, they are unable to obtain lower prices. Their numbers have dwindled significantly and presently represent about 35% of the travel industry.
Chain agencies are very popular and do have a regional and national presence in North America. The number of agencies that make up the chain varies in the travel industry. They vary from dozens in some cases to hundreds in different geographic locations. Some of these agencies are well known. They can negotiate favorable rates from suppliers. In addition, they have power because of their large numbers. Theses chain agencies sell franchises which helps in the distribution of their name brand.
The consortia affiliated agency is a blend of the independent and chain agency. It provides a lot more independence than the affiliated agency but is a part of a big organization. The significant difference is these agencies operate independently of the consortium and are governed by their own rules. Being part of a large organization, they benefit from the preferred supplier relationship of the consortium. They are also able to get assistance with training, marketing support, financial advice and sometimes a 24-hour backup reservation service.
Home based agencies
From these agencies evolve the home-based agencies. One of the biggest changes the industry has experienced is the advent of the home base agent. There were many traditional agents who became home based agents to reduce the cost of production. Presently, the home-based agent has become very popular in the industry. I must complement the early pioneers who overcame the taboo of the industry and were not accepted by their colleagues. In fact, the biggest resistance came from the traditional agencies who felt threatened by these new agents. The early home base agent persevered and was gradually accepted into the fold of travel agents. Now, home base agents have not only grown in numbers but are fully recognized by the industry. There are several reasons why the home base agent is so popular.
They include but not limited to:
- Setting their own work hours •
- Working from the comfort of their home •
- Being available 24/7 to their clients •
- A significant reduction in overhead cost (reduce rent, utilities etc.)
It appears that the home base agent is here to stay as they provide a service that is not available from the large travel agencies in a very competitive travel market.
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