Agencies affiliated with American Marketing Group networks report their greatest challenges today are combating the competition posed by suppliers who accept direct bookings from consumers as well as online travel agencies. A new survey of TravelSavers, NEST and The Affluent Traveler Collection agency owners and managers has identified their greatest pain points. Competition from suppliers who take direct bookings was named by 46 percent of those polled, while OTA competition was named by 35 percent. However, competition from other agencies and from AI were not seen as major issues.
“Suppliers that try to entice travelers to book directly with them and bypass the travel advisor channel are short-sighted,” said AMG Chief Sales Officer Kathryn Mazza-Burney. “Suppliers who are strong agency supporters consider the overall health of the industry. They know that clients who book through advisors spend more and are more satisfied with their travels. Those travelers also receive the superior service, personalized itineraries and peace of mind that advisors provide.”
Economic Mood
Consumers are grappling with multiple financial challenges, including the growing cost of travel, inflation in general and economic uncertainty during this presidential election year. Some travel agency owners and managers are concerned about the impact of the economy on their business. Thirty percent of those surveyed say the rising cost of travel is a challenge and 19 percent are apprehensive about a drop in customer spending due to economic concerns.
“In spite of the economic headwinds, we’re seeing growth in bookings for 2024 and into 2025,” said Mazza-Burney. “For the rest of this year, we’re pacing up in a variety of categories, including some double-digit increases. Those gains are on top of an exceptionally strong year in 2023. Our projections for 2025 are looking even more positive.”
Staffing Woes
At a time when the travel industry is growing and demand for the professional services of a travel advisor is rising, agencies are facing a shortage of qualified consultants. Thirty percent of those surveyed identified recruiting and hiring advisors as a challenge.
The scarcity of advisors is creating other challenges for agencies. Nineteen percent of respondents are concerned about handling client requests and bookings while short-staffed. Twelve percent worry about the mental health of advisors, specifically exhaustion.
Agencies are increasingly turning to independent contractors to bolster sales, instead of hiring frontline staff. Twenty-four percent say they will add at least one IC this year, with 28 percent considering it and 48 percent saying they will not bring on any. Agencies looking to grow the number of ICs want to add three to four of them, with some saying they will take as many qualified consultants as they can find.
Just 17 percent of agencies surveyed plan to hire more staff advisors this year, with 28 percent considering it and 55 percent not planning to hire. The agencies that want to add staff advisors plan to hire two to three of them.
Agency Snapshot
The survey also gathered information on the size and location of travel agencies today, which align with industry movements towards home-based businesses with more ICs:
- Sixty percent of agencies have five advisors or fewer, while nine percent have more than 20
- About two-thirds are entirely home-based while one-third is based in a physical location such as an office or storefront
- ICs account for 50.5 percent of agency consultants, while the share of staff advisors is 49.5 percent (according to The Travel Institute, ICs represent 71 percent of advisors today)
- Fifty-six percent are full-time advisors, while 44 percent work part-time
Owners and managers of TravelSavers, NEST and Affluent Traveler Collection affiliate agencies in the U.S. and Canada took the survey August 12-26, 2024.
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