A shift in sales focus

Showing the ramifications of the global cruise shutdown during the pandemic, ocean and river cruises plummeted in terms of agency channel sales. In 2020, cruises fell from 77% to 56% of what agencies sold compared with 2018, and river cruises to 29% from 54%. The fall was precipitous among all agency sizes and types. 

The impact of closed borders was clear, as tours lost as much share as cruise, falling from 55% to 31%, and destination-focused travel also lost 15 percentage points. The winners were vacation types that held their own — resorts, vacation packages and luxury travel — and travel that could be done domestically: Theme parks gained 5 percentage points, while vacation rentals jumped from just 5% to 13%.

Prior to the pandemic, travel advisors were seeing growth in the all-inclusive market, and Covid-19 appears to have boosted their appeal. In 2018, all-inclusive resort bookings made up 13% of travel advisor revenue. This year's survey shows all-inclusive resort bookings grew to constitute 21% of agency revenue in 2020, the top category for the year, moving ahead of air travel and ocean cruises, which fell by 6 and 4 percentage points, respectively. And as travel rebounded in 2021, all-inclusive resorts reflected the second-biggest sales revenue gain, compared with 28% in 2020. 

It makes sense: The bubble-friendly, full-service and close-to-home qualities of all-inclusives, many of them in visitor-friendly Mexico, made them an attractive pandemic choice. Hotels also fared well relative to other products advisors sell. Their share of agency revenue climbed 4 percentage points in 2020, to 13%, and from 2020 to 2021 hotel sales increased 22%.

75% of agencies — those that survived — reported a decrease year over year in overall sales in 2020. In the entire history of the Travel Weekly Travel Industry Survey, only once, at the height of the Great Recession, was it higher: In 2008, 80% of agencies reported decreased sales. Since 2013, the number had never gone above 10%, and only three years prior, in 2017, it reached a low of 8%.

There are few surprises about which products saw the most dramatic drops in sales between 2019 and 2020: cruises of all kinds by about half, air by 43%, tours by 41%. The more resilient travel products were the ones people could do domestically, traveling in small groups, like hotels, theme parks, resorts and vacation rentals.

When it comes to planning travel in such tumultuous times, perhaps no trip component has risen in importance as much as travel insurance. Travel advisors saw travel insurance sales boom in 2021, up 35% over the year prior. Insurance also grew exponentially in terms of share of sales, with 77% of traditional agencies and 79% of home-based independent agencies reporting a travel insurance sales increase from 2020 to 2021.

Part of that is because the major travel insurance providers have adapted to provide more comprehensive Covid-related coverage. For example, Travelex now categorizes Covid as a covered sickness in its standard travel insurance policies, and Allianz formalized the addition of epidemic coverage to its products. Insurers also offer more flexibility, allowing travelers to shift their policies forward to cover a trip that had to be rescheduled.