Agency numbers on the wane

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8/11/2006

Agency numbers on the wane
Melissa Hadley

he number of retail travel agencies has dropped significantly in Australia in the past 10 years, according to the latest Australian Bureau of Statistics (ABS) figures.

The ABS has completed a total study of the travel agency sector in Australia based on figures from the 2003/04 financial year.

The results showed a drop in the number of agencies across Australia, in particular in the leisure retail sector, which fell from 2393 agencies in 1997 to 1987 in 2004.

The ABS used data from the Travel Compensation Fund (TCF) to compile the report, which is the third study on travel agencies, with previous collections done in the 1986/87 financial year and the 1996/97 financial year.

TCF chief executive Glen Wells said the decline in agency numbers since 1997 reflected a difficult period for the travel industry, with the collapse of Ansett and subsequently Traveland agencies, SARS and terrorist attacks such as September 11 and Bali.

Wells said the difficulties experienced by travel agency proprietors over the past 10 years had resulted in a lot of “mum and dad” operators who were attracted to the industry for travel opportunities exiting their agencies.

In contrast, he said, the remaining agencies were becoming stronger, with a heightened awareness of the need to improve business and operating skills in order to survive.

“There were certainly a lot of people who just thought it was a great way to get cheap travel and see the world; it doesn’t offer that lifestyle anymore,” Wells said.

“The franchise groups are getting stronger, but the drops in commission rates have changed and they’re competing against other forms of booking, such as online,” he added.

“But we’re seeing there are some very good business people out there.”

Despite reports of business travel booming, the number of corporate agencies is also down since the last study, with 325 corporate agencies registered in 1997 compared with 306 in 2004.

However, the number of conference-based agencies is up from 50 in 1997 to 70 in 2004.

The number of wholesalers is down from 158 in 1997 to 119 in 2004, but the number of ticket consolidators in the market has remained the same.

The biggest income for retail agencies was ticket sales, which amassed more than $1.3 billion for retailers in 2004.

Other travel income, such as insurance, travellers cheques and travel-related services, accounted for $93.2 million, while sundry income such as interest, dividends and profit on the sale of assets gave agencies another $107 million.

Total income for travel agencies across Australia added up to $1.5 billion in 2004.

“We see a very strong, viable travel industry and that augers well for consumer confidence,” Wells said.

“We’re seeing less agents defaulting and putting claims in on us, and we’re not seeing as many collapses anymore.”

8 November 2006

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