MLT University attendees.The year ahead is looking bullish for retail travel.

Retail marketing groups and suppliers who sell primarily or entirely through the agent channel are heading into 2014 with sales that in some segments are up by double digits.

For their part, agents are optimistic that their business will continue to grow. Attendance at retail travel conferences is routinely hitting record numbers.

None of this optimism means that it's going to be easy street for travel agents in 2014. One consortium that had targeted smaller agencies and new agents folded this year, and consolidation continued, with smaller agencies selling to larger agencies or moving in with a host.

Alex Sharpe, president of Signature Travel Group, said that sales trends were positive for 2013, and 2014 was looking even stronger. Signature expected to finish 7% up on preferred cruise and tour sales this year. He said preferred hotels saw double-digit growth in 2013 over 2012. Next year is looking good as well, Sharpe said, with exponential growth in river cruises and strong advance sales for hotels and tours. He said that cruise sales are up overall.

Virtuoso reported that 2013 was up 11.2% over 2012 overall, with hotels up 24.8%. And preliminary figures show Virtuoso's growth is strong for 2014, with cruise up 12%, tour up 11% and on-sites (destination activities) up 12% over 2013.

The host agency Nexion reported that 2013 sales in all sectors except cruise were up by double digits, and cruise was up by single digits.

Ensemble Travel Group members predicted that 2013 would be a banner year, with 60% of members anticipating sales growth over 2012. As for 2014, more than 85% of members forecasted an increase in travel sales.

Ensemble Travel Group's sales in the U.S. are also up going into 2014, said Co-president Libbie Rice. Land vacations have grown significantly, she said, while river cruises are showing double-digit increases.

Tour operators that sell primarily or exclusively through travel agents also reported double-digit increases.

At the end of September, MLT Vacations President John Caldwell told agents attending the opening session of MLT University in Minneapolis that "2012 was our best year ever, and 2013 is on track to be even better."

Meanwhile, attendance at retail events boomed.

Virtuoso drew more than 4,000 agents and suppliers at Virtuoso Week in Las Vegas in August, a new high.

Travel Leaders drew 700 agents to its annual meeting in November, 100 more than in 2012. claimed its largest crowd ever at its annual meeting in June, with 1,300 attendees, including 850 agents.

And MLT University drew about 3,000 agents to the three-day event, a new record.

But retail travel is still a tough business, and not just for agencies themselves.

ARC shuttered Helix, the consortium it had introduced in 2011 to serve smaller agencies and industry newcomers. Edyta Satchell, ARC's director of product management, said that ARC closed Helix due to market and economic conditions.

Jack Mannix, principal of Jack Mannix & Associates and former head of the Ensemble Travel Group, said that shuttering Helix signaled how competitive the consortium space has become.

"The economics of this are not what they once were," Mannix said. "The bottom line is the business is more challenging, and the economics of the business are different from what they were even five or 10 years ago."

Agency business models are changing too, further driving mergers and acquisitions and inducing some agencies to move in with a host -- trends that are sure to continue in 2014 because they make economic sense and take a great deal of administrative, technology and management pressure off agency owners.

For example, agencies with sales of $5 million or less annually can see margins increase by as much as 25% when they become part of a larger entity, simply because of the economies of scale, according to the larger agencies that absorb them.

Larger agencies have staff devoted to marketing, bookkeeping and supplier relations, tasks that can eat up the time of a small-agency owner, who is often also manager, frontline agent and janitor. A larger agency can add a smaller agency and perform these tasks without much extra investment and time.

Bigger agencies also earn higher commissions from suppliers than smaller agencies earn because of the minimum sales goals suppliers set as a requirement for making those higher commissions.

Besides collecting higher commissions, bigger agencies can take costs such as rent and errors-and-omissions insurance out of the equation for smaller agencies. Bigger agencies add value by investing in mid-office and quality-control systems that smaller agencies can't afford, and they offer self-booking tools to smaller agencies catering to corporate travelers.

For many former owners, moving in with a larger agency also puts the fun back in the business. Bob Romano, who sold his agency to Your Travel Center, a member of the Tzell Travel Group, said he talked to several larger agencies before settling on Your Travel Center, and all told him roughly the same thing.

"They all said they were going to take away the pain of running the business and let me get back to the fun of being a travel agent," he said. "And that's exactly what happened."

At the same time, the graying of the travel industry appears to be slowing. It's still a major challenge that the industry has to deal with; according to ASTA, 70% of the agency workforce is older than 55.

But the good news is that younger agents are becoming higher profile in the industry. Two new groups emerged: Young Travel Professionals and Millennials in Travel began opening chapters across the nation that target not just travel agents but young people in other segments of the industry. ASTA's Young Professionals Society is now a full-fledged ASTA chapter instead of a committee. It held a Blue Sky Symposium last summer that addressed the challenges of attracting new entrants and younger agents to retail travel.

Some major players are seeing their demographics change. The average age of agents at Liberty Travel is now about 40, according to Sue Brennan, vice president of human resources at FC USA, which owns Liberty. Other agencies are attracting younger agents; 50% of Montrose Travel's agents are under 50 and 18% are between 31 and 40.

Virtuoso began working on making retail travel a viable path for young people six years ago and formed a NextGen group of agency owners and managers to focus on recruitment, according to Becky Powell, senior vice president of global member partnerships for Virtuoso. That, in turn, has spawned several Innovation teams that have been tasked with developing a strategy for attracting and educating new agents.

Follow Kate Rice on Twitter @krtravelweekly.

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