What has been going on in the nation's travel agencies?
We can thank ASTA for adding another variation to this question with its finding that travel agencies have been reducing their reliance on independent contractors and hiring more traditional employees.
According to ASTA research director Melissa Teates, the latest data from the Agency Profile Study show that for the first time in several years, full-time employees outnumber independent contractors (ICs).
In fact, the latest data put the average number of employees at 12 and the average number of ICs at eight, very nearly the reverse of where these numbers were as recently as 2009.
If this is a trend -- and more tracking needs to be done before we can call it that -- there are a number of interesting things that could be causing it.
One possible culprit, of course, is the tax man. Federal and state governments have a long history of paying close attention to the tax status of individuals classified as contractors, and it could be that the cumulative effect of aggressive auditing over the years has resulted in the reclassification of many of these workers.
It could also be that, with business picking up, employers are holding on to valuable contractors by hiring them rather than hosting them.
This theory is one of our favorites, given that ASTA's data also show that the number of profitable travel agencies in the U.S. is on the rise again. According to ASTA, 55% of agencies reported making a profit in 2011, up from 53% in 2007.
Melody Fee, vice president of the Outside Sales Support Network, has a different theory about contractors: that many entrepreneurial ICs, after getting some experience in a hosting relationship, are striking out on their own.
What's good about these theories is that most of them are good news and reflect well on the retail industry's ability to adapt to changing circumstances.
That adaptability is also evident in ASTA's latest data about agencies' business mix, particularly these two facts:
First, air travel, a product that was once the driver of this business, now accounts for 24% of sales, down from 34% a decade ago. Second, international travel now accounts for 56% of total sales at the average agency.
All of these trends suggests to us that travel agents are rational businesspeople. They're going where the money is, whether it's in the products they sell or the way they organize their business and meet their staffing needs.
Trends don't get much better than that.