Identifying Geographic Markets for Travel Agencies

Despite low levels of profitability, the number of travel agencies in the United States is expected to grow by about 1000 agencies per year. In this highly competitive environment, the location of the travel agency is a critical factor to its success. This paper develops a model to help entrepreneurs select a geographic market to enter. Three demand-related variables population size, median income, and proportion of the population 65 years of age or older were found to influence the number of travel agencies in a geographical region. This model was used to identify areas that displayed unmet demand. These are the markets in which entry of a new travel agency may be most successful.