The number of new home-based agents appears to be on the rise this year: The number of home-based sellers who have been in business for two years or less jumped eight percentage points, to 27%, according to the Travel Industry Survey. Meanwhile, the number of traditional, brick-and-mortar agencies in business for more than 30 years has also increased, by five percentage points. Senior Editor Jamie Biesiada talked to Debbie Fiorino, senior vice president of World Travel Holding's Cruise-One and Cruises Inc., about the trends.
Q: This year, the Travel Industry Survey indicates there are more new home-based travel agents in business now. Do you think this could be attributed to more opportunities for home-based agents, a lower entry barrier or something else entirely?
Debbie Fiorino
A: For a small amount of time, people thought that the age of the travel agent was somewhat over, basically when they came out with the introduction of online [booking]. But it's been reported, and we see it in our business, that people may research online, but they want to use a travel agent to book their experiences. ... And travel's a great thing to sell -- to sell experiences. So yes, I think [considering] the more opportunities for home-based agents ... we're finding people outside of the travel space coming into the travel space.
Q: You mentioned it seems like it's becoming a more popular career because people are realizing that the Internet is not the answer to everything. Do you think more people are being attracted to becoming travel agents now versus in recent years?
A: Yes, I think so. I think in years past, people came from mom-and-pop retail brick-and-mortar, and ... they moved over to franchises and host agencies. And now we're seeing a lot more people outside of the industry coming in. We see people from real estate and banking and teachers and military ... so I think you're seeing a lot more of that now than you used to see in travel.
Q: So you think new agents are coming from people who are new to travel entirely?
A: It's a little bit of both... [It] also comes from those who have been on their own in what you would call traditional agencies coming into home-based agencies and joining a larger company in order to get industry-leading commissions.
Q: Will the number of home-based agents continue to rise going forward?
A: I can only look at my own company that I run, and we're growing every year. ... We're seeing that growth, and as we go into our planning for 2016 and our three-year plans, our plans are [to] continue that significant growth based on what we're seeing in the marketplace.
Q: Home-based agent sales have been decreasing: While 2011 saw $414,000 in average bookings for home-based agents, that number was reduced to an average of $328,000 for calendar year 2014. Would you attribute this to the new entrants in the field?
A: Pricing in the past -- and this is why there may have been a decline -- the average selling price was much lower. But this year, in 2015, as you probably know, the cruise lines in particular have really shifted their philosophy, and our average selling price is up considerably in all areas of our business ... So from our perspective, this decline that overall you're seeing could have had to do with pricing in the past.
Q: Traditional travel agencies are graying, with 41% in the business for more than 30 years, while only 4% have been in business two years or less. Is this a less desirable channel for new agents?
A: More and more people are looking for flexible job opportunities. Owning a business and working from home can provide that flexibility. In addition, technological advances have made it possible for people to operate their businesses from anywhere, and the money they save by not having overhead costs can be invested back into their business.
Q: Will traditional agencies continue to see enough new entrants to remain a viable part of the industry?
A: I think it will remain a viable channel. I think that whether they're on their own or through a larger company, again, it's good for the industry, and we have the support of the suppliers. Within the home-based channel, however, I think that you see traditional agencies coming there as well and opening up retail locations and brick-and-mortar [agencies]. So the mix might change a little bit, but I think ... all areas are going to grow, and I believe that traditional agencies will continue to be a strong part of our industry.