Less than three years after implementing a revised rule to help determine an employee's worker status (versus that of an independent contractor), the U.S. Department of Labor (DOL) is rescinding that regulation, reverting to the pre-2021 definition. According to American Society of Travel Advisors (ASTA) SVP and General Counsel Peter Lobasso, “the analysis adopted under the 2021 Rule was superior in that it accorded greater weight to two factors—the degree of control and the worker’s opportunity for profit or loss—that are more probative in determining the worker’s status. The emphasis on control also brought the DOL’s test closer in line with the one used by the IRS, reducing the likelihood of inconsistent determinations at the federal level.”
Going back to an unweighted totality-of-the-circumstances approach, Lobasso says, “is a modest step backward.” And while ASTA is opposed to the final ruling, there is some good news for agencies and advisors. Lobasso adds: “Because, historically, travel agencies have not been the target of aggressive enforcement efforts at the federal level, I do not anticipate this being all that impactful to our industry.”
Travel Nears Pre-Pandemic Levels
U.S.-based travel agency air ticket sales for 2023 totaled $95.3 billion, falling just short of the record $97.4 billion in 2019, according to Airlines Reporting Corp. (ARC). The 2023 total, however, represented a 16 percent increase from 2022.
Looking at other year-long numbers, total passenger trips (+ 9 percent)—including domestic (+5 percent) and international (+15 percent)—were also up over 2022. Ancillary sales, which include fees for products and services, such as upgraded seats, checked bags, an unaccompanied minor, pet-in-cabin, etc., were up 71 percent over last year.
According to the United Nations World Tourism Organization’s “World Tourism Barometer,” released Friday, international tourism ended 2023 at 88 percent of pre-pandemic levels, with an estimated 1.3 billion international arrivals. The unleashing of remaining pent-up demand, increased air connectivity, and a stronger recovery of Asian markets and destinations are expected to underpin a full recovery by the end of 2024, it said.
Helping support those claims is the number of hotel rooms in the final planning and planning stages, which, for December 2023 were up 19.7 percent and 32.7 percent, respectively over the year prior. According to Isaac Collazo, STR’s VP of analytics, “For most of 2023, rooms in construction trailed 2022, but the increases in both the final planning and planning stages point to confidence in travel for the foreseeable future.”
But it’s not just hotels that will rebound in 2024. New data from Squaremouth reveals that the cruise industry will likely set records this year. While the travel insurance marketplace has seen “unprecedented growth” in the cruise sector since travel resumed in 2021, travelers last year bought cruise insurance policies in record numbers. Squaremouth reported a 29 percent increase in cruise sales over 2022 and a 200 percent increase over 2021.
Looking at the microtrends, however, what can we see? WeTravel’s second annual “What’s Ahead for Travel Bookings and Payments Report,” which surveyed more than 600 global travel businesses, found that external factors such as mobile technology adoption, flexible work arrangements and climate and economic conditions are driving consumers to spend more on customized itineraries. It goes on to say that consumers are now customizing itineraries to localize and broaden in-destination experiences—willingly spending more on luxury travel, culinary adventures and wellness escapes, especially in lesser-known destinations.
Tip of the Week
When looking at how consumers are booking travel, a new survey by justfly.com reveals travelers appear to have an open mind when utilizing the technology—artificial intelligence, in particular—for assistance. Just under half (44 percent) of those surveyed said they would be open to exploring AI’s capabilities on future trips. Around half of Gen Z (51 percent) and Millennial travelers (52 percent) are happy to turn to AI for assistance. Those who said they would turn to AI for help with booking travel look forward to discoveries and the potential for greater efficiency.
That said, WeTravel’s report found that 59 percent of businesses offering personalized itineraries noted a 56 percent rise in traveler requests for customization in 2024. Another 36 percent of respondents said that travelers are spending more on add-ons to customize their trips than they did in 2023. AI will not be able to customize a travel itinerary the way a professional can.
It’s not surprising, however, that justfly.com’s survey also discovered that 90 percent of those surveyed, regardless of generation, said having human interaction remains an important aspect of the overall travel booking experience.
Travel Agency Developments
Ensemble continues to expand its footprint in the luxury travel sector via new partnerships with Crystal Cruises and Tully Luxury Travel, plus the launch of its second member community, Luxe Circles. The new partnership with Crystal will include an onboard amenity program for Ensemble-member clients, Ensemble-hosted sailings and access to travel advisor reduced rate voyages. The new Luxe Circle will comprise a select group of members in the luxury sector, along with a group of Rising Stars who are working to grow their business in the luxury category.
Cruise Planners, on the other hand, has detailed more than 25 opportunities for in-person events for 2024. These events range from smaller Bootcamp-type events and Tech Days to its larger Land Symposium, Luxury Forum and Annual Convention, not to mention Signature Travel Network’s regional events and Annual Sales Conference.
Host agency OutsideAgents.com this week announced the hiring of Andrea Wright as vice president, luxury sales. She joins OutsideAgents.com with over 25 years of hospitality experience. Wright has held a variety of positions with Playa Hotels & Resorts and was most recently its vice president of sales, USA. Before Playa Hotels and Resorts, Wright held sales management positions with Club Med.
Good to know: The Travel Institute is kicking off its year-long 60th anniversary celebration with a new Tripkit scholarship fund. Available during Q1 2024 while funds last, the scholarship offers tuition assistance on the education leader’s new advisor training program. The year-long celebration will also include new curriculum programs, like webinars and educational events, reflections from industry leaders, key milestones, a special gift for certified graduates and more.
Your Insight Requested
Travel Agent has launched another edition of its quarterly "Travel Trends & Advisor Insight Survey." We will use these quarterly surveys to learn more about the current state of the travel industry, as well as your business. Please take a few minutes to fill out the survey; following its conclusion, we will publish the findings here, so you will gain insight into the larger travel ecosystem and your colleagues' businesses.
To see the latest survey results, view its eponymous whitepaper, available for download.
Related Stories
Windstar to Position Ships in the Mediterranean Year-Round
Exodus Adventure Travels Announces B Corp Certification
WTTC, Biosphere Join Forces to Standardize Hotel Sustainability