According to a new PhoCusWright report, travel agencies’ share of the cruise market will fall from 68 per cent in 2009 to a projected 64 per cent by 2013, or about one percentage point per year. The study, titled “Travel Agency Distribution Landscape 2009-2013,” is a wide-ranging body of research touching on all aspects of travel agent sales across product segments.
The report says that while sales of cruise products by traditional travel agencies have grown slowly in recent years, while agents’ share of total cruise sales has been falling. The study suggests there are several reasons for this. First, the number of agents has remained flat at a time when the growth of ship capacity has accelerated, forcing cruise lines to broaden their distribution channel, according to a report by Johanna Jainchill on Travelweekly.com. And second, the report suggests that a significant part of the reason for the decline in share is a direct result of the fall-off in agent compensation as a result of both lower fares and increases in noncommissionable fees (NCFs). Both have served to reduce agents’ incentives to sell cruises and to encourage them to look for ways to expand the range of travel products they offer, PhoCusWright said. In part, this is because a greater number of cruises are being sold directly to consumers by the cruise lines as well as through online travel agencies (OTAs), the report said. This trend is not exclusive to cruises. The report found that while travel agency sales will grow through 2013, exceeding USD 100 billion, their share of overall travel product sales will drop to 32 per cent in 2013, from 35 per cent in 2008. Cruises currently account for 40 per cent of total sales for leisure agencies and home-based agents, PhoCusWright found. But that dependency is changing, the study found. Many of those agencies are trying to diversify their product mix to depend less on cruises. This includes increasing focus on air, hotel and car rental, the market segment that corporate agencies dominate. “After years of adapting their business models to reduce their reliance on air tickets and to focus instead on complex leisure (cruises and vacation packages), leisure agencies and home-based agents are now booking more individual air and hotel components,” the report said.
Click here to see the original article>The report says that while sales of cruise products by traditional travel agencies have grown slowly in recent years, while agents’ share of total cruise sales has been falling. The study suggests there are several reasons for this. First, the number of agents has remained flat at a time when the growth of ship capacity has accelerated, forcing cruise lines to broaden their distribution channel, according to a report by Johanna Jainchill on Travelweekly.com. And second, the report suggests that a significant part of the reason for the decline in share is a direct result of the fall-off in agent compensation as a result of both lower fares and increases in noncommissionable fees (NCFs). Both have served to reduce agents’ incentives to sell cruises and to encourage them to look for ways to expand the range of travel products they offer, PhoCusWright said. In part, this is because a greater number of cruises are being sold directly to consumers by the cruise lines as well as through online travel agencies (OTAs), the report said. This trend is not exclusive to cruises. The report found that while travel agency sales will grow through 2013, exceeding USD 100 billion, their share of overall travel product sales will drop to 32 per cent in 2013, from 35 per cent in 2008. Cruises currently account for 40 per cent of total sales for leisure agencies and home-based agents, PhoCusWright found. But that dependency is changing, the study found. Many of those agencies are trying to diversify their product mix to depend less on cruises. This includes increasing focus on air, hotel and car rental, the market segment that corporate agencies dominate. “After years of adapting their business models to reduce their reliance on air tickets and to focus instead on complex leisure (cruises and vacation packages), leisure agencies and home-based agents are now booking more individual air and hotel components,” the report said.