After the pandemic brought travel and tourism to a screeching halt, it comes as no surprise that advisors experienced a precipitous drop in revenue in 2020: Home-based independent agencies saw their average revenue fall from $899,000 in 2018 to just $346,000 last year, erasing several years of marked progress.
Many traditional agencies made less money in 2020, with 67% reporting revenue under $1 million, up from 48% in 2018. In addition, the number of agencies reporting revenue of $10 million to $50 million dropped from 11% to 5%.
This dramatic loss in business prompted many advisors to introduce fees of different kinds for the first time, to build a more sustainable and consistent revenue stream.
Although service fees, generally speaking, had been trending downward prior to the pandemic, dropping from 22% of revenue in 2016 to 18% in 2018, they appear to be back on the upswing. For 2020, service fees accounted for 13% of total revenue across all agency types, but a category of "other fees" — newly added to this year's study — made up 14% of total revenue, consequently growing the total fees category to a sizable 27% of revenue. Those can include fees for cancellation and rebooking, retainers, membership and concierge services, among others.
Leisure travel has always dominated in this survey, but it took an even larger piece of the pie in 2020 than in 2018, jumping from 84% to 91% of sales. The high concentration on leisure travel products was primarily generated by home-based agencies, while traditional agencies making more than $3 million continued to focus the most on business travel, representing about a third of their revenue.
Overall personal income from selling travel has plummeted. In 2019, 31% of all travel sellers made less than $25,000 per year selling travel; this year it's 60%. Most of those are home-based advisors, but a full 45% of traditional agency advisors also made less than $25,000, surging from only 21% in 2019. And overall, advisors making more than $100,000 plummeted, from 19% in 2019 to 4% in 2020.
