Industry overview
The Travel agency, tour operator and other reservation service and related activities sector across EU27 average comprises approximately 89,345 enterprises employing about 330,000 people and generating €113.0 bn in net turnover in 2013. The average enterprise size is – employees per firm. This is a useful yardstick when assessing whether your own operation sits within the typical scale band of the sector.
Profitability
With a healthy operating margin of 7.2% of revenue in 2013, the sector reports €8.1 bn of gross operating surplus (Eurostat's EBITDA-equivalent, before depreciation). This figure provides the headline benchmark against which an individual operator can sanity-check their own bottom line, values significantly below indicate cost or pricing pressure, those above suggest competitive advantage worth defending.
Cost structure
Cost of revenue dominates the Travel agency, tour operator and other reservation service and related activities P&L at 88.5% of turnover, reflecting the high material and input content of activities in this sector. Personnel costs account for 9.0%, with energy purchases adding –. Procurement efficiency and contract management are therefore the two strongest profit levers for operators in this segment.
Trend & trajectory
Over the period 2011 to 2013 the operating margin moved from 6.4% to 7.2% (+0.8 percentage points), an encouraging upward trajectory. Sectors with stable or improving margins tend to reflect successful pass-through of input costs and disciplined capacity management; declining margins typically point to either over-supply or a structural cost squeeze that warrants strategic review.