Travel Industry Survey 2013I'm sure you've come across those images: At first glance, it appears to be a soft-focus photograph of a familiar subject. But when you look closely, you see that it's a mosaic, composed of much smaller images that are typically connected thematically and merge together into a larger, synthesized portrait.

Hundreds of tiny butterflies might be used to create the impression of a single larger butterfly, or photos of stars, planets and nebulae, reduced and artfully arranged, come together as the image of Neil Armstrong.

Our Travel Industry Survey has a similar mosaic quality. Each year, we ask the travel retailers among our readers to tell us, in significant detail, how they're doing, what they're doing and even how they feel about what they're doing. Each and every one of the 1,500-plus respondents to our survey provides a unique and accurate portrait of travel retailing, and taken together, they compose a literal and figurative "big picture." (Click here or on the image to continue reading the report.) 

The value of the survey is found not only in looking at the overall image that emerges each year but in the way the big picture changes as a result of hundreds of tiny incremental changes in the individual responses. While the majority of the measures of this year's survey closely follow those of last year, there are some shifts that provoke thought and some that perhaps should provoke action.

Data points to ponder

As I looked over the results, I was initially struck by something that stopped changing. Well, perhaps not stopped, but slowed dramatically.

One of the preliminary checkboxes that we present to respondents to our survey asks whether they work at home or in an agency outside the home. We ask not because we expect those numbers to change dramatically from year to year, but because it's useful to compare what differences, if any, exist between the way that home-based agents and brick-and-mortar agents operate, sell and succeed.

But to our surprise, we discovered that from 2010 to 2012, the share of home-based agents among our readers leapt from 31% to 45%, rising almost 50% in just 24 months.

That change in the overall portrait of retailers appeared to be so significant that when I first saw it, I inquired whether someone at Travel Weekly had made a conscious decision to change our pattern of circulation to include more home-based agents. The answer was no; the agents who received the survey in 2010 were, by and large, the same agents who received it in 2011 and 2012. It was our readers who had redefined our audience, not our circulation director.

This year, the go-home movement slowed: The number of home-based agents went up about 2%. But we were sufficiently impressed by the change in the portrait of retailing last year that we decided to explore home-based retailing in more detail this year, complemented with data from the National Association of Career Travel Agents.

Some of the results we saw this year become illuminated in the context of history. The home agent movement picked up a lot of steam in 2002 because, for many agents, going home was the only way to survive. The combination of airline base-commission cuts, Internet competition and the dramatic drop in travel following 9/11 meant that agents had to cut costs dramatically, and being a home-based, hosted agency proved a quick way to reduce overhead.

But now -- 11 years later -- when we asked why agents chose to be home-based, they cited the need for flexible hours and the desires to be one's own boss and avoid a long commute. And almost half of home-based agents surveyed had never known any other operating model; they have been home-based for as long as they have been travel agents.

For additional insight into home-based agents, see the charts and interview beginning here

A call to action?

There are some stats that, taken together, might provoke action rather than thought.

We asked respondents to indicate which support services and incentives from suppliers they valued highly. The top four are fam trips, educational programs, email updates and overrides/incentives.

This, taken in isolation, might lead one to conclude that agents believe that professionalism is strategic to success. The first three could all be considered subsets of training and suggest a belief that, in the long term, service to clients is more important than focusing on supplier compensation. That client-focused approach would appear to be reinforced somewhat by other data showing that service fees account for 22% of gross revenue for agents.

But digging deeper into the numbers, there appears to be some evidence that the most profitable and successful agents pay equal attention to commissions and service fees. Using gross revenue as a measure, the larger the agency, the more likely they are to have a higher percentage of revenue from fees (up to 38% for agencies of $10 million or more, vs. 14% for home agents, who gross, on average, $384,000).

And it turns out that successful agencies focus on fees, but not only fees. When we asked the agents who reported having the greatest revenue growth what they thought had contributed to their success, it turned out the common denominator was a focus on high-commission, high-margin products.

Which raises an interesting, and actionable, question: Is it possible to both focus on supplier commissions and put your clients' interests first? Unless you have foresworn commissions altogether and survive solely on service fees, the answer is clearly yes.

Despite the changes that occur among the individual respondents that result in an ever-evolving "big picture" of travel retailing, the formula for success has not really changed much in decades: Successful agents very carefully select only suppliers they can count on to deliver a top-notch experience and then give them enough business to be able to reach commission override thresholds. And in doing so, these agents become so important to their suppliers that if a client needs special attention or has a complaint that needs immediate resolution, the agent has the leverage with the supplier to resolve the situation in the client's favor (which, in turn, more than justifies the service fee).

There's a lot to chew on in the pages that follow. We've connected some of the dots for you, but the survey data points, like the agents who supplied them, can be viewed in isolation or in aggregate. Connect the dots yourself to create your own sense of "the big picture"; the value of data only increases when it's interpreted by you and filtered through your own experiences and insights. 

Email Arnie Weissmann at [email protected] and follow him on Twitter

JDS Travel News JDS Viewpoints JDS Africa/MI