The so-called "law of averages" is easy to misconstrue. A gambler sitting at the roulette table assumes that if a red number has come up three times in a row, it's black's turn the law of averages would so dictate, right?
The roulette wheel, of course, isn't keeping track and trying to even things out; the odds of coming up red or black are exactly the same each time the wheel spins. In the long run, red will come up as often as black, but to assign short-term predictive power to averages can be costly.
I thought about that when reviewing the 2017 Travel Weekly Travel Industry Survey. What struck me is how irrelevant "average" can be when it comes to travel agencies because of the tremendous number of models in existence today. Corporate vs. leisure, home-based vs. brick-and-mortar, online/offline/hybrids, call centers, destination specialists, lifestyle specialists, cruise specialists, all-inclusive specialists, luxury specialists, consolidators, hosts, wholetailers on and on.
And many of these have sub-specialities. OTAs may focus on hotels, metasearch or full-service offerings, and this year, in categorizing home agents, we divided them between independent home-based agents and ones who work full time for a brick-and-mortar agency but who are based out of their homes.
So when we see in our results that the average gross dollar bookings for 2016, even when limited to the category "traditional travel agencies," stands at $6.7 million, I don't really know what meaning to assign to that, because there is no longer any such thing as an "average" travel agency.
Similarly, the average number of employees and average industry sales per location have less meaning than they would have a decade ago.In certain categories, the median is much more interesting than the average. The average gross revenue of an independent home-based travel agent appears to have jumped to $747,000 last year, but the median amount the amount which, above and below, has approximately the same number of people was $218,000, which is more in keeping with previous trendlines and less likely to be thrown off by a few exceptionally high responses.
I do see the value in looking at long-term trends, and to me the most meaningful shifts have shown up not as sharp increases or decreases in various categories, but in a leveling off of previously rising and falling lines, such a flattening of the growth in proportion of home-based agencies, the decreasing share of air bookings and the increasing share of international bookings.
In the pages that follow, our reporters take measure of the statistics and trends that could help agents, agency owners and suppliers make better decisions.
Although there is a strong competitive spirit in the industry (and plenty of sharp elbows), the data collectively suggests that travel is not a zero-sum industry: The vast majority of retail businesses are growing and optimistic about the future.
Combining what one is seeing in one's own business with the changes that are occurring industrywide will likely lead to better decision making. And as diverse as travel retailing has become, there are likely no "average" conclusions to be drawn there will be as many different business decisions coming out of this data as there are travel businesses.