ASTA Agency Sales and Revenue Trends FY 2014/FY 2013

NOTICETOUSERSOFTHISINFORMATION:Copyright©2015AmericanSocietyofTravelAgents(ASTA).Allrightsreserved.Pleasereferenceendofthisdocumentfortermsofuse.

ASTATravelAgencyBenchmarkingSeries

ASTA Agency Sales & Revenue TrendsComparison of Full Year 2014 with Full Year 2013

February2014

©ASTA2015

Slide Contents

2 ©ASTA2015

Introduction 3LargestPercentageofAgenciesReportedanIncreaseinRevenue,TransactionsandNumberofClients 4MostAgenciesSawIncreases“Under10%”orPerformedthe“Same” 5CorporateAgenciesShowMuchVariabilityinPerformance– WhileRetailLeisureRemainsSteady 6RelationofClientsandRevenueIsOppositeforCorporateAgenciesComparedtoIndependentsandRetailLeisureAgencies 7AllEightAgencySegmentsPerformedWellwithMostAgenciesSayingSalesWeretheSameorIncreased 8AgenciesReportedtheLargestIncreaseforInsurance,Tour/GroupSalesandFIT 9IncreasedSalesVariedGreatlyBasedonAgencyType 10MostIndependentAgentsReportedSalesRemainingtheSamewiththeExceptionofInsurance,FITandTour/Group 11MostRetailLeisureAgenciesSawIncreasedSalesforInsurance,Tour/Group,FITandCruise 12AirandHotelSalesIncreasedfortheMajorityofCorporateAgencies 13ReportedProfitsfor2014StrongAcrossAlltheAgencyTypes 14Expectationsfor2015AreVeryPositive 15IndependentAgent’s2015ForecastMorePositivethanRetailLeisureandCorporateAgency 16PercentageofAgenciesReportingSameisIncreasingasThoseReportingaDecreaseShrinksShowingtheIndustryIsStabilizing 17SurveyBackground 18ASTAResearchProgram 19

Introduction

ASTAsurveyedASTAagencymembersinJanuary‐February2015askingthemtocomparetheirfullyear(FY)2014performanceagainsttheirfullyear(FY)2013performance.Agenciesspecificallycomparedtheirrevenue,transactionvolume,numberofclientsandsalespertravelsegmentin2014totheirperformancein2013.Additionally,theywereaskedtoestimatehowprofitabletheywerein2014andestimatetheir2015profits.

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Largest Percentage of Agencies Reported an Increase in Revenue, Transactions and Number of Clients

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Revenue Transactions NumberofClientsDecrease 19% 21% 19%Same 26% 29% 31%Increase 54% 50% 50%

19% 21% 19%26% 29% 31%

54%50% 50%

0%

10%

20%

30%

40%

50%

60%

%ShareofResponses

Agency'sFY2014PerformanceversusFY2013forRevenue,TransactionsandNumberofClients

Decrease Same Increase

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Most Agencies Saw Increases “Under 10%” or Performed the “Same”

Decreased>25%

Decreased10%‐25%

Decreased<10% Same Increased

<10%Increased>10%

Revenue 2% 3% 14% 26% 31% 24%

Transactions 4% 4% 14% 29% 25% 25%

NumberofClients 4% 2% 13% 31% 27% 23%

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Agency'sFY2014PerformanceversusFY2013forRevenue,TransactionsandNumberofClients

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Corporate Agencies Show Much Variability in Performance – While Retail Leisure Remains Steady

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ALLAgencies IndependentAgent(incl.ICs)

RetailLeisureAgency(70%+)

CorporateAgency(70%+)

2012Revenue 52% 45% 54% 52%2013Revenue 55% 44% 56% 65%2014Revenue 54% 54% 57% 41%

52%45%

54% 52%55%

44%

56%

65%

54% 54%57%

41%

0%

10%

20%

30%

40%

50%

60%

70%

%ShareofResponses

ComparisonofIncreased RevenueByAgencyTypeAgency'sFY2014PerformanceversusFY2013

Relation of Clients and Revenue Is Opposite for Corporate Agencies Compared to Independents and Retail Leisure Agencies

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IndependentAgent(incl.ICs)

RetailLeisureAgency(65%+) CorporateAgency(65%+)

Revenue 54% 57% 41%NumberofClients 43% 55% 57%

54% 57%

41%43%

55% 57%

0%

10%

20%

30%

40%

50%

60%

70%

%ShareofResponses

Increased RevenueComparedtoIncreased ClientsByAgencySegment

Revenue NumberofClients

Morecorporateagenciesreportedanincreaseofclientscomparedtorevenuesuggestingthatalargerclientbasedidnottranslatetoonparrevenuegrowthin2014.

All Eight Agency Segments Performed Well with Most Agencies Saying Sales Were the Same or Increased


Insurance 10% 36% 54%Tour/Group 14% 34% 52%FIT 10% 39% 51%Cruise 21% 36% 43%Hotel 14% 53% 34%Air 25% 48% 27%CarRental 25% 59% 16%Rail 28% 64% 8%

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Agency'sFY2014SalesPerformanceversusFY2013SalesPerformanceByTravelSegment

Agencies Reported the Largest Increase for Insurance, Tour/Group Sales and FIT

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54%

52%

51%

43%

34%

27%

16%

8%

0% 10% 20% 30% 40% 50% 60%

Insurance

Tour/Group

FIT

Cruise

Hotel

Air

CarRental

Rail

%ofAgencieswithIncreased FY2014SalesComparedtoFY2013‐ SalesbyTravelSegment

Increased Sales Varied Greatly Based on Agency Type

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Air Cruise Tour/Group HotelALLAgencies 27% 43% 52% 34%IndependentAgent(incl.ICs) 21% 37% 46% 33%RetailLeisureAgency(65%+) 23% 50% 57% 27%CorporateAgency(65%+) 59% 29% 42% 73%

27%

43%

52%

34%

21%

37%

46%

33%

23%

50%

57%

27%

59%

29%

42%

73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

%ShareofResponses

ComparisonofIncreased SalesbyAgency‐TypeFY2014comparedtoFY2013

ALLAgencies IndependentAgent(incl.ICs) RetailLeisureAgency(65%+) CorporateAgency(65%+)

Most Independent Agents Reported Sales Remaining the Same with the Exception of Insurance, FIT and Tour/Group

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Note:IndependentAgentsincludesOwner‐Agents,IndependentContractors(ICs),andHostedAgents.TheydonothaveemployeesorICs.AllagencieswithemployeesorICsareincludedinRetailLeisure.

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Insurance FIT Tour/Group Cruise Hotel Air CarRental Rail

Decrease 7% 12% 14% 20% 10% 28% 23% 27%Same 41% 41% 40% 43% 57% 51% 65% 65%Increase 52% 48% 46% 37% 33% 21% 12% 8%

7%12% 14%

20%

10%

28%23%

27%

41% 41% 40% 43%

57%51%

65% 65%

52%48% 46%

37%33%

21%

12%8%

0%

10%

20%

30%

40%

50%

60%

70%

%ShareofResponses

IndependentAgentsSalesbySegmentFY2014comparedtoFY2013


Most Retail Leisure Agencies Saw Increased Sales for Insurance, Tour/Group, FIT and Cruise

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Insurance Tour/Group FIT Cruise Hotel Air CarRental RailDecrease 9% 13% 7% 19% 14% 25% 24% 26%Same 32% 30% 38% 31% 59% 52% 63% 65%Increase 59% 57% 55% 50% 27% 23% 14% 9%

9%13%

7%

19%14%

25% 24% 26%32% 30%

38%31%

59%52%

63% 65%59% 57% 55%

50%

27%23%

14%9%

0%

10%

20%

30%

40%

50%

60%

70%

%ShareofResponses

RetailLeisureAgencySalesbySegmentFY2014comparedtoFY2013


Air and Hotel Sales Increased for the Majority of Corporate Agencies

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Hotel Air CarRental InsuranceDecrease 23% 32% 27% 26%Same 5% 9% 27% 37%Increase 73% 59% 45% 37%

23%

32%27% 26%

5%9%

27%

37%

73%

59%

45%

37%

0%

10%

20%

30%

40%

50%

60%

70%

80%

%ShareofResponses

CorporateAgenciesSalesbySegmentFY2014comparedtoFY2013


Reported Profits for 2014 Strong Across All the Agency Types

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ALLAgencies IndependentAgent(incl.ICs)

RetailLeisureAgency(70%+)


Realizedprofit 65% 65% 65% 63%Brokeeven 18% 15% 19% 18%Operatedataloss 9% 14% 6% 16%Don'tknowyet/Unsure 8% 7% 9% 4%

65% 65% 65% 63%

18%15%

19% 18%

9%14%

6%

16%

8% 7% 9%4%

0%

10%

20%

30%

40%

50%

60%

70%

%ShareofResponses

AgencyPerformancein2014Comparedto2013

Realizedprofit Brokeeven Operatedataloss Don'tknowyet/Unsure

Expectations for 2015 Are Very Positive

Year AverageProfit% Median% Mode%

2007 8% 10% 10%2008 8% 10% 10%2009 7% 5% 0%2010 6% 5% 5%2011 7% 5% 5%2012 8% 5% 5%2013r 8% 5% 5%2014r 10% 10% 5%2015f 12% 10% 5%

Note:r=revised,f=forecast

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Revised2013 and2014andForecasted2015ProfitsComparedto2012‐2007(profitsmeasuredasapercentageoftotalrevenue)

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Independent Agent’s 2015 Forecast More Positive than Retail Leisure and Corporate Agency

Year ALLAgencies IndependentAgent(incl.ICs)

RetailLeisureAgency


2011 7% 8% 7% 8%

2012 8% 8% 8% 8%

2013r 8% 9% 8% 9%

2014r 10% 11% 10% 9%

2015f 12% 14% 12% 12%Note:r=revised,f=forecast

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AverageRevised2013and2014andForecasted2015ProfitsComparedto2013‐2011ByAgencyType(profitsmeasuredasapercentageoftotalrevenue)

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Percentage of Agencies Reporting Same is Increasing as Those Reporting a Decrease Shrinks Showing the Industry Is Stabilizing

ComparisonofReportedTotalIncreasedSales,FY2012‐ FY2014

FY2012/2011 FY2013/2012 FY2014/2013Revenue 52% 55% 54%Transactions 47% 53% 50%NumberofClients 47% 55% 50%

ComparisonofReportedSameSales,FY2012‐ FY2014


ComparisonofReportedTotalDecreasedSales,FY2012‐ FY2014


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Survey Background

Surveydatawascollectedthroughthe2015ASTAResearchFamily.TheASTAResearchFamilyiscomprisedofarepresentativesampleofASTAmembertravelagencyownersandmanagers.TheResearchFamilyreflectsASTAmembersinkeyagencydemographicsincludingsalesvolume,leisure/businessmix,numberofpart‐timeandfull‐timeemployeesandgeographiclocation.MemberswererecruitedrandomlyandwerecontractedtocompleteasurveyeveryfourtofiveweeksfromJanuary2015throughOctober2015.TheFamily’ssizevariesfromsurveytosurveyduetonon‐response,agencyclosings,mergers,andchangesinmembershipstatus,butisdesignedtoyieldaresponserepresentativeofallASTAagencymembers.

Thesurveydatawascollectedonlineviasurveygizmo.cominJanuary/February2015.Thereplylevelforthesurveyindicatesaminimumof95%confidencewithanerrorrate+/‐4%representingthetotalASTAagencymembership.Thisisconsideredtobeastrongsamplewithreliableresults.

Pleasenote:AlltablesanddatainthisreportaresourceddirectlyfromASTA’sAgencyProfilesurveyunlessotherwiseindicated.

ContactMelissaTeates,DirectorofResearchatASTA,[email protected].

ThisreportisavailablefordownloadfreeonASTA’sResearchPage.

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ASTA Research Program

TravelAgencyBenchmarkingSeries:

ASTAAgencyProfile ‐ DemographicsofASTAmembersincludingsalesandtypeofagents.FinancialBenchmarkingReport ‐ Benchmarkingdataonsales,revenuesources,revenuebytypeoftravel,andoperationalexpensesarethefocusofthisreport.GDSReport ‐ TrendsonGDSusage,contractlengths,contractnegotiations,andincentives/penaltiesarecovered.Also,includesinformationonnon‐GDSusers.LaborandCompensationReport ‐ Detaileddataoncompensationbyregionandagencysizeandtype.Benefitsoffered,turnoverrates,andhiringpracticesarealsoincludedinthisreport.Marketing&CustomerRetentionReport ‐ Marketingpracticesandclientrelationshipsareanalyzedinthisreport.Topicsincludedareleadgenerationandclientturn‐over.NicheMarketingReport– Detailsonimportantagencynichesincludingmarketshareandsalesimpact.ServiceFeeReport ‐ Includessurveydataonaverageservicefeesbytraveltype,servicefeepolicies,servicefeecollectionsandservicefeerevenue.Consultingfeesarealsocovered.Supplier‐TravelAgentRelationshipMarketingReport ‐ Preferredsupplierrelationships,bookingchannelsused,andeffectivenessofincentiveprogramsareanalyzed.TechnologyandWebUsageReport ‐ Thebusinesspracticesofagenciesrelatedtointernetusage,technologyusage,agencyWebsite,andonlinebookingarecovered.

OtherResearchAvailable:2014ValueofTravelAgents ‐ Theprimaryobjectiveofthisstudywastomeasurethevalueofthetravelagencychannelandtoshowwhetherworkingwithtravelagentsenhancesthetravelexperience.Andtheresultsconfirmedjustthat,andmore.IndependentAgentReport ‐ Basicoperationaldataforindependentagentsincludinghostagencyusage,commissionsplits,sales,andrevenuearecoveredinthisreport.ComingSoon:2015TravelerDecisionMaking– Learnabouthowconsumerschosetravelagentsandwhytheychosethetypesoftraveltheydo.

©ASTA2015

MoreinformationonASTAReportscanbefoundontheResearch Papers page.ReportscanalsobepurchasedintheASTA Store.

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