Online Travel Agencies
Overall, the travel agency industry hasn’t fared well during the recession, but IBISWorld estimates revenue among online agencies grew at an average rate of 3.9 percent over the past five years, and expects revenue to grow another 6.1 percent in 2013. Storefront travel agencies are being replaced by online services, which offer a relatively high-profit, low-cost way to handle transactions.
But major operators have been acquiring global, regional and local websites to improve revenue and capture a larger market share, which presents both a risk and an opportunity for start-ups. As major operators grow through economies of scale, competition and barriers to entry in the industry increase. On the other hand, new entrants that have a successful site can leverage their success to secure an attractive deal with a larger firm. While IBISWorld expects industry growth in the next five years, they forecast an annualized rate of only 2.2 percent.