Travel Weekly's Travel Industry Survey 2016

Agency employment

Since 2008 the Travel Industry Survey has asked traditional agencies to break down the status of their employees. Over the years, the average number of full-time employees has fallen from 29.3 to 19.6. This year, Travel Weekly added a category to the survey, independent contractors (ICs), and found that the average agency employs 11.8 ICs.

Eben Peck, ASTA's senior vice president of government and industry affairs, spoke with news editor Johanna Jainchill about these numbers and what they say about the agent sector.

Q: Do the TIS numbers correspond with your own data?

A: According to our most recent ASTA agency profile report, the overall average number of full-time employees is 10, part-time is two and ICs is 10. This is a survey of all ASTA members, not just "traditional agency locations." This may explain some of the discrepancy. For retail/office locations only (excluding home-based and independent) it's seven full-time employees, 2.1 part-time employees and 13.3 ICs.

Q: Is this breakdown indicative of a healthy industry?

A: It's indicative of an evolving industry. In terms of overall industry health, you would have to look at revenue growth, etc. This is notoriously hard to pin down, but we are seeing positive signs all around. Last year, 70% of our members reported realizing a profit, up from 54% in 2012. Further, our consumer research study found that in the past 12 months, 22% of consumers booked through a travel agent, the highest share reported in the past three years.

Q: I know that in 2015 you found that travel agency employment had reached a five-year high. What do you attribute that to?

A: We think the industry has reached a tipping point, to the benefit of the travel agency community. At this point, consumers have tried it all: they've booked online, they've gone direct and they've used a travel agent. Our consumer study dispelled once and for all the myth that booking direct with suppliers or spending hours online yourself gets you a better deal or gives you a happier travel experience. In short, if consumers want a better travel experience, they should use an agent. Consumer awareness campaigns from ASTA and the consortia have driven home this message with great results.

Q: ASTA created a new membership category for independent contractors this year. Does that have to do with a rise in ICs?

A: It does. In mid-2016 ASTA [created] a new independent-contractor membership category of $199 per year for ICs who are affiliated with an ASTA Premium Agency member and who sign a two-year agreement or who are already a National Association of Career Travel Agents member.

For the past two years ASTA's large consortia members have been showing an enhanced commitment to the association by subsidizing and mandating membership. We believe a tiered membership structure is the best way for members to pay according to their ability based on sales, and the new IC category is another way to help those agents who want to join ASTA to do so. Engaging this growing part of the industry is key to ASTA's future growth.

Q: Considering recent regulations regarding ICs, do agencies have to be more adept at learning how to properly employ them?

A: Yes, agencies have to be careful in terms of how they engage ICs. We recommend that agencies look carefully at the totality of the circumstances of their relationship with ICs and engage the worker as an entity, as opposed to as an individual.

We also recommend agencies direct ICs to provide their own access to software and booking tools or pay the agency for access. It is also advisable to pay the IC on a straight commission basis, as opposed to hourly, and having a written fixed-term contract in place with the IC.

The stakes are high. If an agency is classifying workers as ICs and they are reclassified as employees by the Department of Labor, agency owners would be responsible for back payroll taxes that were not deducted. There is also some potential liability for overtime and minimum-wage requirements and possible penalties and fines.

ASTA has a number of member-only resources available that provide guidance to agencies seeking to ensure their IC relationships will pass muster. 

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