ASTA Agency Sales & Revenue Trends Comparison of Half Year 2013 with Half Year 2012

August 2013

NOTICE TO USERS OF THIS INFORMATION: Copyright © 2013 American Society of Travel Agents (ASTA). All rights reserved.

Introduction

ASTA surveyed ASTA agency members in June-July 2013 asking them to compare their 1st Half 2013 performance against their 1st Half 2012 performance. Agencies specifically compared their revenue, transaction volume, number of clients and sales per travel segment in the 1st Half of 2013 to their performance in 2012. Additionally, they were asked to forecast how profitable they will be in 2013 and 2014.

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Many Travel Agencies Report Increase in Revenue, Transactions and Number of Clients

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Revenue Transactions Number of ClientsTotal Decrease 32% 34% 28%Same 22% 19% 27%Total Increase 46% 47% 46%

32% 34%

28% 22%

19%

27%

46% 47% 46%

0%5%

10%15%20%25%30%35%40%45%50%

% S

hare

of R

espo

nses

Agency's 1st Half 2013 Compared to 1st Half 2012 for Revenue, Transactions and Number of Clients

Total Decrease Same Total Increase

Decreased > 25%

Decreased 10%-25%

Decreased <10% Same Increased

<10% Increased

>10%

Revenue 6% 9% 16% 22% 23% 23%

Transactions 5% 9% 20% 19% 28% 19%

Number of Clients 4% 9% 15% 27% 32% 14%

Source: ASTA's 2013 Financial Benchmarking survey using the ASTA Research Family, a panel of ASTA agencies

Nearly One Fourth Report a Revenue Increase of 10% or Greater

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Agency's 1st Half 2013 Compared to 1st Half 2012 for Revenue, Transactions and Number of Clients

Corporate and Leisure Agencies Show Stronger Revenue Growth than Independent Agents

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ALL Agencies Independent Agent(incl. ICs)

Retail LeisureAgency (70%+)

Corporate Agency(70%+)

Revenue 46% 33% 52% 56%

46%

33%

52% 56%

0%

10%

20%

30%

40%

50%

60%

% S

hare

of R

espo

nses

Comparison of Total Increased Revenue By Agency Type Agency's 1st Half 2013 Performance to 1st Half 2012

All Major Industry Sectors Performed Well

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Agency's 1st Half 2013 Sales Performance Compared to 1st Half 2012 By Travel Segment

Decreased > 25%

Decreased 10%-25%

Decreased <10% Same Increased

<10% Increased

>10%

Air 6% 8% 19% 40% 17% 11%

Cruise 6% 11% 11% 29% 22% 21%

Tour/ Group 7% 8% 15% 28% 24% 19%

Hotel 4% 6% 13% 42% 22% 13%

Car Rental 6% 6% 14% 58% 11% 4%

Rail 8% 5% 9% 60% 9% 8%

Insurance 5% 4% 9% 38% 27% 18%

FIT 3% 3% 10% 42% 29% 13%

Source: ASTA's 2013 Financial Benchmarking survey using the ASTA Research Family, a panel of ASTA agencies

Travel Insurance Sale Exhibits Greatest Growth

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45%

43%

43%

42%

34%

28%

17%

16%

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

Insurance

Cruise

Tour/ Group

FIT

Hotel

Air

Rail

Car Rental

% of Agencies with Total Increased 1st Half 2013 Sales Compared to 1st Half 2012 by Travel Segment

Sector Sales Performance Varies by Agency Type

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ALL Agencies Independent Agent (incl. ICs)

Retail Leisure Agency (70%+)

Corporate Agency (70%+)

Air 28% 14% 30% 65% Cruise 43% 26% 50% na Tour/ Group 43% 31% 47% na Hotel 34% 25% 37% 33% Car Rental 16% 6% 16% 28% Rail 17% 7% 21% 19% Insurance 45% 34% 49% 18% FIT 42% 27% 47% na Source: ASTA's 2013 Financial Benchmarking survey using the ASTA Research Family, a panel of ASTA agencies

Comparison of Total Increased Sales by Agency-Type 1st Half 2013 Compared to 1st Half 2012

Independent Agents Significantly Increased Sales of Insurance and Tour/Group Products

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Note: Independent Agents includes Owner-Agents, Independent Contractors (ICs), and Hosted Agents. They do not have employees or ICs. Al Agents with employees or ICs are included in Retail Leisure.

Insurance Tour/Group FIT Cruise Hotel Air Rail Car

RentalTotal Decrease 23% 34% 24% 38% 33% 36% 31% 37%Same 43% 35% 48% 36% 42% 50% 62% 56%Total Increase 34% 31% 27% 26% 25% 14% 7% 6%

23%

34%

24%

38% 33% 36%

31% 37%

43% 35%

48%

36% 42%

50%

62% 56%

34% 31% 27% 26% 25%

14% 7% 6%

0%

10%

20%

30%

40%

50%

60%

70%

% S

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Independent Agents Sales by Segment

1st Half 2013 Compared to 1st Half 2012

Total Decrease Same Total Increase

Half of Retail Leisure Agencies Increased Sales for Cruise and Insurance

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Cruise Insurance Tour/Group FIT Hotel Air Rail Car

RentalTotal Decrease 26% 18% 28% 12% 20% 30% 21% 26%Same 24% 33% 24% 41% 43% 40% 58% 57%Total Increase 50% 49% 47% 47% 37% 30% 21% 16%

26%

18%

28%

12%

20%

30%

21% 26% 24%

33%

24%

41% 43% 40%

58% 57%

50% 49% 47% 47%

37% 30%

21% 16%

0%

10%

20%

30%

40%

50%

60%

70%

% S

hare

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Retail Leisure Agency Sales by Segment

1st Half 2013 Compared to 1st Half 2012

Total Decrease Same Total Increase

Corporate Agencies Increase Air Sales

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Air Hotel Car Rental RailTotal Decrease 24% 28% 22% 19%Same 12% 39% 50% 63%Total Increase 65% 33% 28% 19%

24% 28%

22% 19%

12%

39%

50%

63% 65%

33% 28%

19%

0%

10%

20%

30%

40%

50%

60%

70%

% S

hare

of R

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Corporate Agencies Sales by Segment

1st Half 2013 Compared to 1st Half 2012

Total Decrease Same Total Increase

Percentage of Those Reporting Increased Sales Slows as Agency Sales Normalize Post-Slowdown

1st half

2009/1st Half 2008

1st half 2010/1st Half

2009

1st half 2011/1st Half

2010

1st half 2012/1st Half

2011

1st half 2013/1st Half

2012

Revenue 12% 47% 53% 50% 46% Transactions 12% 45% 48% 47% 47% Number of Clients 11% 38% 43% 43% 46%

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1st half

2009/1st Half 2008

1st half 2010/1st Half

2009

1st half 2011/1st Half

2010

1st half 2012/1st Half

2011

1st half 2013/1st Half

2012

Revenue 73% 36% 27% 28% 32%

Transactions 73% 36% 28% 29% 34%

Number of Clients 64% 29% 26% 24% 28%

Comparison of Reported Total Increased Sales for Half Year Between 2009 and 2013

Comparison of Reported Same Sales for Half Year Between 2009 and 2013

The amount of decrease or increase in sales is obviously affected by the relative strength or weakness of the previous year. As the market normalizes post-slowdown the amount of “Same” increases.

Source: ASTA's Financial Benchmarking surveys using the ASTA Research Family, a panel of ASTA agencies

1st half

2009/1st Half 2008

1st half 2010/1st Half

2009

1st half 2011/1st Half

2010

1st half 2012/1st Half

2011

1st half 2013/1st Half

2012 Revenue 15% 16% 20% 22% 22% Transactions 15% 19% 24% 24% 19% Number of Clients 25% 32% 32% 32% 27%

Comparison of Reported Total Decreased Sales for Half Year Between 2009 and 2013

Despite Growth, Agencies Project 2013 Profits to be on par with 2012, while Stronger Profits Projected in 2014

Year Average %

Median %

Mode %

2007 8% 10% 10% 2008 8% 10% 10% 2009 7% 5% 0% 2010 6% 5% 5% 2011 7% 5% 5% 2012r 8% 5% 5% 2013p 8% 5% 5% 2014f 9% 10% 5%

Note: r=revised, p = projected, f = forecast Source: ASTA's Financial Benchmarking Surveys using the ASTA Research Family, a panel of ASTA agencies

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Projected 2013 and Forecasted 2014 Profits Compared to 2012-2007 (profits measured as a percentage of total revenue)

ALL Agencies Independent Agent (incl. ICs)

Retail Leisure Agency (70%+)

Corporate Agency (70%+)

2012r 8% 7% 8% 7% 2013p 8% 7% 8% 5% 2014f 9% 9% 9% 6%

Note: r=revised, p = projected, f = forecast

Source: ASTA's 2013 Financial Benchmarking Survey using the ASTA Research Family, a panel of ASTA agencies

Projected 2013 and Forecasted 2014 Profits Compared to 2012 by Agency Type (profits measured as a percentage of total revenue)

It seems most agencies do not expect the stronger revenue and sales in 2013 to increase profits. Perhaps they are seeing a rise in costs. For leisure agencies lower cruise pricing may be affecting their commission revenue.

Survey Background

Survey data was collected through the 2013 ASTA Research Family. The ASTA Research Family is comprised of a representative sample of ASTA member travel agency owners and managers. The Research Family reflects ASTA members in key agency demographics including sales volume, leisure/business mix, number of part-time and full-time employees and geographic location. Members were recruited randomly and were contracted to complete a survey every five to six weeks from January 2013 through October 2013. The Family’s size varies from survey to survey due to non-response, agency closings, mergers, and changes in membership status, but is designed to yield a response representative of all ASTA agency members. The survey data was collected online via surveygizmo.com in June and July 2013. Of the 447 family members, 232 completed the survey. This reply level indicates a minimum of 95% confidence with an error rate +/-5.5% representing the total ASTA agency membership. This is considered to be a good sample with reliable results.

Please note: All tables and data in this report are sourced directly from ASTA’s Agency Profile survey unless otherwise indicated.

Contact Melissa Teates, Director of Research at ASTA, at mteates@asta.org if you have any questions. This report is available for download free on ASTA’s Research Page.

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ASTA Research Program

Travel Agency Benchmarking Series:

ASTA Agency Profile - Demographics of ASTA members including sales and type of agents. Financial Benchmarking Report - Benchmarking data on sales, revenue sources, revenue by type of travel, and operational expenses are the focus of this report. GDS Report - Trends on GDS usage, contract lengths, contract negotiations, and incentives/penalties are covered. Also, includes information on non-GDS users. Labor and Compensation Report - Detailed data on compensation by region and agency size and type. Benefits offered, turnover rates, and hiring practices are also included in this report. Marketing & Customer Retention Report - Marketing practices and client relationships are analyzed in this report. Topics included are lead generation and client turn-over. Service Fee Report - Includes survey data on average service fees by travel type, service fee policies, service fee collections and service fee revenue. Consulting fees are also covered. Supplier-Travel Agent Relationship Marketing Report - Preferred supplier relationships, booking channels used, and effectiveness of incentive programs are analyzed. Technology and Web Usage Report - The business practices of agencies related to internet usage, technology usage, agency Web site, and online booking are covered.

Other Research Available:

2009 Packaged Travel Landscape 2006-2010 - This study sizes the total market, analyzes the structure of the tour operator industry, and maps key product and distribution trends. Tactics for better cooperation between tour operators and travel agents are also covered. Independent Agent Report - Basic operational data for independent agents including host agency usage, commission splits, sales, and revenue are covered in this report.

More information on ASTA Reports can be found on the Research Papers page. Reports can also be purchased in the ASTA Store.

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