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Home Business Opportunity Trends: Home-Based Travel Agents

Prior to the terrorist attacks of 911, the travel industry predicted an increase in travel due to reduced family sizes, increased household incomes and an increased number of baby boomers. It was anticipated that boomers, who are healthier and more mobile than persons of past generations, would travel more frequently The inclusion of the Internet for planning and booking travel arrangements, in the 90's, gave travel agents the competitive edge that was needed to compete with airline reservation systems. The events of 911 reduced travel around the world and may have stigmatized air travel for years to come, but air travel is a necessary convenience. As such, the travel industry is beginning to experience a re-growth.

The Consumer: It is expected that the growing and aging boomer population will be responsible to increase growth in leisure travel. William Maloney, executive vice-president, American Society of Travel Agents (ASTA) states, "These boomers are active, vital people that are accustomed to traveling and who expect to travel. Traveling, to a Boomer, is not a luxury, but a necessity". The Bureau of Labor Statistics also projects a 28% growth in the leisure and hospitality industry between the years 2002 and 2012. The Bureau indicates, however, that the growth will stem from increased participation in arts, entertainment and recreational activities. The Bureau projects a decrease in travel activity.

Those persons interested in franchising with travel agents should not be discouraged by this projection. The overall outlook for consumer spending, as measured the by the U.S. Personal Consumption Expenditures (PCE), indicates that consumers have transitioned from spending for both durable and non-durable goods to spending more on services. Travel agents that are able to provide complementary services as well as timely, accurate information in their travel packages are likely to continue to secure clients. Consumer satisfaction, rather than cost, may be the major contributor to repeat business in the travel industry. The inclusion of additional services and information will also assist travel agents in securing business from corporate and government entities that have, relatively, constant travel needs.

Providing potential customers with access to those services and information is also an important factor in the growth of the travel industry. Carlson Wagonlit Travel (CWT), the largest, worldwide, travel agent franchise, indicates that its percentage of U.S. transactions, secured over the Internet, increased from 36% in 2004 to 45% in 2005. In addition, its European clients continue to double the number of Internet transactions while Australia's Internet transactions' growth is 14%. The travel agent that can provide services and timely information via a user-friendly Internet portal has the best chance of growth for the future.

Business Trends: The traditional travel agent was responsible to plan and book travel arrangements. Modern day travel agents must offer traditional services as well as valuable information and advise in order to stay competitive. In addition to travel arrangements, successful travel agents are also offering the following:

• Custom regulations information
• Currency exchange rates
• Weather conditions
• Recommendations for recreational activities
• Dinning recommendations
• Passports
• Visas
• Certificates of vaccination

The capability to provide convenient access to services, information and advise through the Internet has increased customer satisfaction with travel agents and also made them more competitive with the airline industry.

Franchise Trends: Data provided by the Bureau of Transportation Statistics indicates that overall travel had been increasing, prior to 911. Table 1 shows that the number of people, who traveled long distance (in excess of 100 miles), doubled between the years 1995 through 2001 and every mode of transportation had experienced growth.

Number of Long Distance Trips By Mode (in Millions)

The travel agent industry shifted in the 90's, as the Internet became a popular method of handling traveling and accommodations. Travel agents found the Internet to be a cost saver over the costs required for the day-to-day operation of storefront offices. Following the terrorist's attacks on September 11 2001, the amount and frequency of travel in the U.S. diminished, due to fear and anxiety. Since that time travel has seen a re-growth.

The Travel Industry Association of America (TIA) indicates that in the year 2004, 65% of the more than 98.3 million travelers used the Internet to make their travel plans. In addition, 70% of frequent travelers reported using the Internet to make plans. In contrast, 45% of the population of travelers used the Internet to book reservations. This represents an increase of 6% from the year 2003. The TIA also indicates that, of the travelers that book online, 83% booked at least ½ of their travel online, while 40% booked all of their travel online. This represents a 29% increase over the year 2003

With heightened security methods established for airline travel, the public has adjusted to the new way of airline travel. CWT reports a 30% growth rate in the first half of 2005. Net sales were $606 million as compared to 465 million during the same time frame of the previous year. New sales growth for the CWT franchise was 20%, totaling 849 million as opposed to 708 million for the first half of 2004. The company credits its strategic initiatives, which include the consolidation of travel programs for its global clients, securing new clients around the globe and securing and expanding government clients in Australia, Germany and France, as the reason for such growth.

Entrepreneur's annual Franchise 500 ranks the top 500 franchises based on numerous factors, to include financial strength and ability as well as growth rate and size. Table 5 shows the travel agent franchises included in that listing. The table also lists franchises included in the Franchise Times 2004 Top 200, which ranks franchises based on worldwide sales. This listing included only one travel agent franchise.

Entrepreneur's Franchise 500 Ranking

• #184 Carlson Wagonlit Travel
• #188 CruiseOne Inc
• #325 Travel Network

Franchise Times 2004 Top 200 Ranking

• #42 Results Travel

Other successful, travel agent franchises, which are experiencing growth, include Global Travel International, a home based travel agency franchise and Uniglobe Travel, which ranks #357 in the top 500 European franchises.

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