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NOTES


INTRODUCTION

This publication presents results, in respect of the 2003-04 financial year, from an Australian Bureau of Statistics (ABS) collection of businesses whose main activity was the provision of travel agency services. This is the third ABS collection on travel agency services. Previous collections were conducted in respect of the 1986-87 and 1996-97 financial years.

COMPARISONS WITH PREVIOUS SURVEY RESULTS

Historical comparisons with previous surveys are not made due to a number of changes in scope and collection methods since the conduct of the last collection:

• Travel agencies operating solely in the Northern Territory were in scope of the 1996-97 survey but are outside the scope of the current collection.
• Tourist bureaux were in scope of the 1996-97 survey but are outside the scope of the current collection.
• In 1996-97 data obtained from the Travel Compensation Fund (TCF) were supplemented by a sample survey of travel agencies, but the current collection uses data only from the TCF.

COMMENTS

The ABS welcomes comments and suggestions from users regarding future surveys of Service Industries. These comments should be addressed to the Director, Service Industries National Statistics Centre, Australian Bureau of Statistics, Locked Bag 10, Belconnen, ACT 2616.

ROUNDING

Where figures have been rounded, discrepancies may occur between the sum of component items and the total.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Gabrielle Robbie on Canberra (02) 6252 6133.

MAIN FEATURES


INTRODUCTION

This publication presents results, in respect of the 2003-04 financial year, from an Australian Bureau of Statistics (ABS) collection of businesses whose main activity was the provision of travel agency services. This is the third ABS collection on travel agency services. Previous collections were conducted in respect of the 1986-87 and 1996-97 financial years. Businesses such as domestic and international airlines which carry out travel agency activities, but are mainly engaged in other activities (e.g. providing airline transport services) were excluded from this collection.

The collection included travel agency businesses, licensed with the Travel Compensation Fund (TCF) and classified to Class 6641 - Travel Agency Services (part), of the Australian and New Zealand Standard Industrial Classification (ANZSIC).

Travel agencies operating solely in the Northern Territory are not required to be licensed with the TCF and were therefore outside the scope of the current collection. Agencies classified to Standard Institutional Sector Classification of Australia 3000 - General Government were also outside the scope of the current collection. However, government-owned or majority-owned public trading enterprises whose main activity was the provision of travel agency services were within the scope of this collection.

TYPE OF BUSINESS

At the end of June 2004 there were 2,640 businesses whose main activity was the provision of travel agency services. These businesses are categorised into three broad types: retailers, wholesalers/ticket consolidators, and inbound tour operators. Businesses mainly engaged in the retailing of travel products (2,396) accounted for 90.8% of these businesses, of which 1,987 (82.9%) were mainly retailing travel products for leisure purposes. There were 119 wholesale businesses of travel products and 109 inbound tour operators. The remaining 16 businesses were ticket consolidators. For a description of these activities refer to the Glossary.

INCOME

Total income generated by travel agencies in 2003-04 was $2,108.9m, 91.8% ($1,935.1m) of which was earned directly from the sale of travel products. The major contributor to income from travel products was ticket sales of $1,822.7m. Commissions from the sale of travel insurance amounted to $52.7m, while commission income from the sale of travellers cheques was $3.4m in 2003-04. The major source of non-travel income was interest, dividends and profit on sale of assets of $87.7m.

Retail travel agency businesses accounted for almost three-quarters (72.8% or $1,534.9m) of income generated by all travel agencies, followed by wholesalers/ticket consolidators (21.4% or $450.6m) and inbound tour operators (5.9% or $123.4m).

The major source of income for retail travel agencies was ticket sales of $1,334.4m, which represents 93.5% of their travel income of $1,427.6m and 86.9% of their total income of $1,534.9m. Wholesalers, who received their income from selling travel products to retailers, earned 87.8% ($395.8m) of their income from the sale of travel products.

EXPENDITURE

Total expenses incurred by businesses providing travel agency services in 2003-04 were $1,775.9m. Labour costs of $945.1m (53.2% of total expenses) was the largest single expenditure item for businesses, averaging $43,400 for each employee. Other major expenses were advertising and brochure expenses of $132m, rent, leasing and hiring expenses of $129.6m, telecommunications services of $63.6m, other management services of $59.1m, depreciation and amortisation of $49.3m, computer reservation system costs of $25.3m, and paper, printing and stationery expenses of $25.1m.

PROFITABILITY

Businesses providing travel agency services recorded an operating profit before tax of $333.1m for the 2003-04 financial year, which represented an operating profit margin of 17%. This profit margin varied by type of travel agency. Retail travel agencies had an operating profit margin of 14.1%, whereas wholesalers/ticket consolidators recorded an operating profit margin of 28.7% and inbound tour operators had an operating profit margin of 13.1%.

EMPLOYMENT

At the end of June 2004, total employment in travel agencies was 22,609 and was predominantly female (16,236). Full-time employment (17,969 persons) represented 79.5% of total employment. Part-time workers represented 16.7% (3,786 persons) of employment, and they worked primarily for retail travel agencies (3,141 persons) and wholesalers (425 persons). Working proprietors and partners comprised 3.8% (854 persons) of all persons employed, and they mainly worked in retail travel agency businesses.

Retail travel agencies had employment of 17,534 persons, representing 77.6% of total employment. Wholesale travel agencies and ticket consolidators had employment of 3,766 persons (16.7% of total employment) and inbound tour operators had employment of 1,309 persons (5.8%).

Wholesale travel agencies and ticket consolidators had the highest proportion of employees working full-time (88% of employment) and also the highest proportion of full-time female employees (86.9%).

BUSINESS SIZE

At the end of June 2004, 95.4% (2,518) of travel agency businesses employed fewer than 20 persons. These businesses accounted for 45.1% of employment and 32.4% of income for all travel agency businesses. There were 1,776 businesses each employing fewer than five persons. These very small businesses represented 67.3% of all businesses and accounted for 18.9% of total employment and 12.4% of total income, and were mainly retail travel agencies (1,677 businesses). In contrast, large businesses employing 100 or more persons accounted for 0.6% of all businesses and contributed 37.5% to total employment and 48.2% to total income.

The operating profit margin for travel agencies, which was 17% overall, differed considerably by size and type of business. Travel agency businesses employing 100 or more persons recorded the highest operating profit margin of 21.1% for the 2003-04 financial year followed by businesses employing 20-49 persons with an operating profit margin of 20.5%.

The operating profit margin of retail travel agencies with employment of less than five persons (11.8%) was affected by the presence of a large number of working proprietors and partners in this business size grouping. The drawings of these working proprietors and partners were not included in business expenses and thus were not deducted in calculating profit, resulting in an operating profit margin higher than would have been the case if they were an incorporated entity and receiving a wage or salary from the business.

SUMMARY OF OPERATIONS
			Retailers	Wholesalers/ticket consolidators	Inbound tour operators	Total
Businesses at end June		no.	2 396	135	109	2 640
Employment at end June		no.	17 534	3 766	1 309	22 609
Income
	Ticket sales	$m	1 334.4	379.2	109.1	1 822.7
	Other travel	$m	93.2	16.6	2.6	112.4
	Other	$m	107.3	54.8	11.7	173.9
	Total	$m	1 534.9	450.6	123.4	2 108.9
Expenses
	Labour costs	$m	719.8	165.9	59.3	945.1
	Rent, leasing and hiring	$m	110.5	11.4	7.7	129.6
	Other	$m	500.0	159.4	41.7	701.2
	Total	$m	1 330.3	336.8	108.7	1 775.9
Operating profit before tax		$m	204.6	113.8	14.7	333.1
Operating profit margin		%	14.1	28.7	13.1	17.0
Industry value added		$m	912.4	238.0	69.7	1 220.0