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MAKING TOUGHBUSINESS DECISIONSIndispensable Research for MeasuringTravel Agency SuccessPresented by2014 Benchmarking Research HighlightsDecember 2014

Table of CONTENTS1. Introduction: GROWING Your Bottom Line in 2015Successful travel agents have always been passionate about theirwork. But today’s climate demands more than passion. To thrive in2015, retail travel professionals need to make tough businessdecisions based in up-to-the-minute business intelligence.2. The Bottom Line: PROFITABILITY3. The PRODUCTIVITY Equation4. Sales Focus: Where’s your SWEET SPOT?5. GETTING PAID By Suppliers6. GETTING SMART About Fees7. Is SOCIAL MEDIA paying off?8. Making Money ONLINE: Travel Agency Sales via the Web9. The COSTS of Doing Business10. Getting Paid: HOW MUCH Do Agents Earn?11. GDS Trends: USAGE & REVENUES12. DEFINITIONS & Methodology

Introduction: GROWING Your Bottom Line in 2015To support travel agents in their success, Travel Market Report has partnered with ASTA to deliver theagency industry’s latest, most-relevant research.We have what no one else has: exclusive, must-have data on what you need to know to be successful.This report details 10 key business metrics drawn from ASTA’s 2014 Travel Agency Benchmarking Series.Each benchmark sheds light on a critical aspect of travel agency profitability, including:1Agency profit margins6Social media ROI2Frontline agent productivity7Online sales3Sales by segment8Operating expenses4Supplier commission levels9Agent compensation5Trends in service fees10GDS usage and costsIn the pages that follow, you’ll also find links to ASTA tools and resources, along with links to TravelMarket Report stories providing the kind of news and commentary, advice and analysis that you won’tfind anywhere else.It’s all designed to give travel agents the indispensable tools, insights and information they need to growtheir profits in 2015.Like most industries today, the travel agency business is dynamic, fast-moving and subject to externaland internal forces that can feel overwhelming.In this environment, the pathway to continued success is to adopt an eyes-wide-open stance, stay opento change and maintain a keen focus on the business basics that will drive profits and keep yourcustomers coming back for more. The information in this report promises to guide you along the way.Voice of the Travel ProfessionalAboutThe ResearchA NOTE ABOUT ASTA’S BENCHMARKING SERIESASTA’s Travel Agency Benchmarking Series is a collection of detailedresearch-based reports available as a benefit of membership. The benchmarkingreports give ASTA agents access to key data that they can use to measure theirbusiness practices and results against those of their peers.1

The Bottom Line: PROFITABILITYAverage Agency Profits by Business Model: 7%7%8%IndependentAgent (incl. ICs)Retail LeisureAgency (70% )CorporateAgency (70% )2015Forecast2014Projected2013Revised2012More travel agencies enjoyed solid profit margins in 2014 than in recentmemory. Nearly nine in ten––88%––expect to register a profit whenthey crunch the year’s numbers. And most anticipate stronger returnsin 2015. But while agents’ average profit margin will be a healthy 9% in2014, many agencies still exist on theedges of profitability. What will you do“Most travel agencies have successfullyin 2015 to grow your agency’s marginsevaluated their product mix over the pastand secure your future?few years, determined where they excel,and adjusted their sales focus to maintainlong-term profitability. ASTA membersare bullish about a continued increase inprofits for 2015.”Zane Kerby, ASTALearnMoreASTAAgency Sales & Revenue TrendsTravel Market ReportA Business Action Plan for Your Agency8 Tips for Building a Profitable Niche2

The PRODUCTIVITY EquationAverage Sales & Revenues* per Frontline Agent 1,119,155Avg Annual Sales 714,077per Fulltime AgentAvg Annual Revenue 388,684per Fulltime Agent 90,717 90,713 47,502Independent Agent (incl. ICs)Retail Leisure Agency (70% )Corporate Agency (70% )Running a profitable travel agency requires keeping close tabs onyour sales-to-revenue ratio in addition to total volume. While theproductivity of frontline agents is obviouslykey, other factors come into play. In managed“In today’s highly competitivecorporate travel, high technology expensesretail travel arena, successcoupled with the need to contain clients’means much more than simplytravel costs exert downward pressure onmaking the sale. Top travelagencies’ bottom lines. For leisure agencies, aprofessionals must have a solidfocus on customer service affects agents’grasp of the business-profitsales productivity, making it essential toangle behind every transaction.”charge appropriate service fees.Libbie Rice, Ensemble Travel GroupFootnotes* Revenues include: commissions, overrides, markups, transaction or service fees, GDS incentives and “other.”LearnMoreASTATravel Agent's Management ToolkitTravel Market ReportWant To Boost Sales? Take a Tip from Improv TheaterRestaurants Offer Valuable Lessons on Profitability3

Sales Focus: Where’s your SWEET SPOT?Share of Sales per Segment in 2014Overall23%26%11%3%33%5%Independent Agent (incl. ICs)16%27%13%4%35%6%Retail Leisure Agency (70% )19%29%8%3%37%5%Corporate Agency (70% )61%AirlineCruise8%HotelCar rental15%Tour/Packages6%9%1%Other*Ever since leisure travel agents stopped focusing on selling air travel,tours and packages have been their single largest product segment,followed by cruise. Tour and package sales first surpassed air sales asa percentage of leisure agents’ business in 2005. For corporateagents, airlines sales still predominate. The mostsuccessful agencies are deliberate about their“Cruise has always been mysales focus. They weigh factors such as consumerbread and butter, but recentlydemand, changing supplier distribution tacticstours have jumped from 5% toand their own passions, then write a business plan30% of my business. There’sand review it annually. Is your product mix thean explosion of peoplemost profitable it could be? If not, perhaps it’swanting in-depth experiences.”time to update your business plan.Michelle Duncan, Odyssey TravelFootnotes*Other includes travel insurance, services such as passport photos, and merchandising, such as luggagesales, etc.Percentages are averages, based on agents’ projected sales for 2014.LearnMoreASTABusiness PlansSales and Marketing CourseTravel Market ReportSurf Or Turf? Move Into Selling ToursCruise Agents Embrace All-Inclusives4

GETTING PAID By SuppliersCommisson Levels by 5%12%12%% of Agencies That10%Report %Travel InsuranceCruisesToursHotel36%37%Air-Corporate Agencies Air-Leisure Agencies81%56%Car RentalRailAs supplier commission levels fluctuate, agents need to track thetrends, paying close attention to their own commission earnings aswell as to the big picture. What products and services are likely toyield the highest returns over the long-term? Are certain segments orsuppliers pulling away from the travel agencydistribution channel? Is it time to redirect your“Advisors will choose thesales efforts? As Nolan Burris of Future Proofproducts they represent andTravel Solutions says, “Agencies must take chargesell more than ever before.of their own financial future and not place it in theSuppliers are taking note ofhands of a disinterested group of shareholders.”that. We are advisors, ratherthan agents, and thatdistinction grows every day.”Colleen Gillette, New Paltz TravelASTACommission Resources in ASTA’s E-LibraryLearnMoreTravel Market ReportSelling Cruises: Does It Still Pay?How to Boost Your Commissions on Cruise SalesSelling Travel Insurance: A Missed Opportunity for Agents?5

GETTING SMART About FeesAverage Fee by Travel Type 118% of Agencies that Charge a Fee61%Trip planning (FIT) 5423%Tour packages 5342%Air-inclusive packages 41Cruises 3921%70%Air- corporate 3888%Air-leisure 33Shore excursions 3120%45%Accommodations only 28Rail tickets 28Booking ancillary services 20Car only64%16%36%Most travel agents stopped giving away their services years ago.Today the majority of ASTA agents charge fees when booking air andrail travel and when planning FIT vacations. More than four in tencharge for hotel-only bookings and for air-inclusive packages. Themost striking recent development is a trendtoward charging fees when booking cruises. More“Do something worth paying forthan one in five agents (21%) now charges anand charge for it. If you haveaverage of 41 to plan a cruise, and the number oftaken the time to get to knowagents who charge for cruise is growing.someone as a person—theirAgents have steadily increased the dollar amountlikes, dislikes, desires, dreams,they charge too—up from a median fee of 25 forthe reasons behind theirair bookings in 2005 to 38 in 2013.Agents reserve their highest fees for their FITtrip-planning services, charging an average 118.Their lowest average fee is 20 forcar-only bookings.trip—you’re doing much morefor them than the booking. Feesare for all the wonderful thingsyou do for your customers.”Nolan Burris, Future Proof Travel SolutionsLearnMoreASTATravel Agency Consultancy Fee CourseTravel Market ReportTo Reduce Your Risk, Charge FeesDon’t Gamble With Your Bottom Line6

Is SOCIAL MEDIA paying off?% of Agencies Using Social Media68%55%74%72%80%76%79%53%UseSocial Media47%45%32%2007200828%200926%2010201124%2012% of Revenue Derived from Social Media20%21%2013201429%2%Do Not UseSocial venue10-15%Revenue20 %Revenue26%30%Are you wasting time on social media? Despite steady growth intravel agents’ social media presence, it’s still tough to see a tangibleROI. Fully 30% of agents active on social media say they derive zerorevenue from their efforts, and 80% say their time online yields justfive or fewer new client leads monthly. But agrowing number are finding a payoff. For 13%,“People naturally want to buysocial media activity now generates upwards offrom people they trust. Online20% of revenues. You need to have a plan, commityou build trust by answeringto spending the time, follow through, then trackquestions, networking andyour results.offering valuable informationto your target customers.”Sophie Bujold, social media strategistASTASocial Media WebinarsLearnMoreTravel Market Report4 Ways to Avoid Sabotaging Your Social Media Efforts3 Keys to Measuring ROI on Social Media MarketingIs Social Media Pulling You Off-Course?7

Making Money ONLINE: Travel Agency Sales via the WebAgency Revenue Earned via Online Tools*Online Customer Requests for Assistance27%12% of22%Total Revenue18%16%16%9% ofCorporate Agency (70% )8%Total RevenueRetail Leisure Agency (70% )12% ofIndependent Agent(incl. ICs)Total RevenueRetail Leisure AgencyCorporate Agency(70% )% of Total Requests via Agency Website% of Total Revenue Generated From OnlineRequests for AssistanceIndependent Agent (incl. ICs)Sales booked via travel agency websites have risen slowly but remainrelatively low. For the 34% of travel agencies that offer an onlinebooking tool, those tools generate an average 10% of revenues.Corporate agencies earn the most viaonline tools. For service-oriented"For most agents, online bookings areleisure agencies and independentnot necessarily a big factor, but onlineagents, branded websites are moreshopping is critical. Website content iseffective at spurring online requestskey. A combination of unique contentfor assistance, which agents thenabout the agency’s expertise and value,service directly and convert to sales.plus supplier content and an easy call toThese online requests yield 18% ofaction, provides a robust, content-richrevenues for independent agents andshopping experience. This is proving to16% for retail leisure agencies.Footnotes*Base: Agencies with online booking toolsbe a highly successful online and offlinesales scenario."Marilyn Macallair, Passport OnlineLearnMoreASTASales and Marketing CourseTravel Market ReportBuilding Agency Websites That Work in a 2.0 World8