Companies in this industry arrange travel and traveler accommodations and include travel agents, tour operators, and other travel services like time-share exchanges, visitors bureaus, and ticket offices. Major companies include Expedia, Priceline, and Sabre Holdings (all based in the US), as well as Kuoni Travel (Switzerland), Thomas Cook (UK), and TUI Travel (Germany).
Annual revenue from worldwide tourism, which includes travel agency services, is about $1.2 trillion, according to the World Tourism Organization. Travel agency services are prevalent in the countries that spend the most on tourism; tourist receipts, which includes travel arrangements and reservation services, are highest in the US, Spain, France, China, and Italy.
The US travel services industry includes about 17,000 companies with combined annual revenue of about $40 billion.
Demand is driven by business and leisure travel, which depends on the economy. The profitability of individual companies depends on marketing. Large companies have an advantage in being able to provide a wider range of services, especially to corporate customers, and to afford sophisticated websites. Small companies can compete effectively by providing service to a few large customers, specializing in a service niche, or serving a local market. The industry is concentrated: the 50 largest companies account for about 60 percent of revenue.
Two major factors have shaped the industry in recent years: sophisticated pricing schemes developed by the airlines to maximize profitability, and the emergence of the Internet as a widely available information and...