New data: Reports of the demise of travel agents were premature

|
Diana Duran, team leader in Montrose Travel’s loyalty division.
Diana Duran, team leader in Montrose Travel’s loyalty division.

Despite the lingering stereotype of a slowly dying sector, a recent ASTA study and interviews with agents across the country revealed that travel agencies are hitting new highs in employment and compensation.

ASTA’s 2014 Labor & Compensation Report found that 74% of the Society’s members, accounting for about 24% of all U.S. agencies, had at least one employee or independent contractor, up from 72% in 2011. ASTA’s survey found that compensation for experienced agents, including benefits, had risen 17% in the past five years, from an average of $29,000 in 2009 to $34,000 in 2014, topping out at $105,000.

Some frontline agents earn more; one agency interviewed for this article said one of its agents made as much as $120,000 a year. Compensation for managers with sales responsibilities averages $46,500, maxing out at $175,000, ASTA found. The Society said that its members, which include online agencies such as Expedia, account for 84% of travel agency sales in the U.S.

Agencies are getting increasingly creative about where they find agents and how they pay them, testing, rejecting and tweaking the candidate search and compensation process in order to adapt to a constantly changing employment marketplace.

For the most part, agencies are hiring for three reasons: to get help handling business coming in the door; to grow their businesses by hiring agents who generate repeat and referral business; and to replace agents who leave.

While most owners and managers said they liked the idea of hiring experienced agents, many find they are limited to new entrants. Conversely, some make zero retail travel experience a job requirement.

Interviews with agency leaders revealed that the new hires come from all age groups, from millennials to empty-nesters. Among new entrants of whatever age, two common denominators are a love of travel and comfort with technology.

The search process is idiosyncratic, with smaller agencies tending to search on an as-needed basis and larger agencies running ongoing recruitment efforts. Frequent sources for new agents are recommendations from current agents, customers who want to join the business and online ads.

‘I can’t afford mediocrity’

Whatever the process, quality hires are key.

“I can’t afford mediocrity,” said Philip Banks, president of Legacy Travel, an agency in Plano, Texas.

He was voicing a common theme.

To make sure they find good people, even among those who lack experience, agency heads said they look for certain traits in their hires.

Chris Minoletti, operations manager of Bay World Travel in Half Moon Bay, Calif., said he’s been successful finding people with sales and customer service experience, then training them to sell travel. One of these new entrants started in January 2014 and is a “rock star” who ramped up fast, swiftly becoming adept at selling vacations costing $10,000 to $20,000. Minoletti said that what really stood out was the speed with which this agent mastered the details of complex travel planning as well as her ability to sell beyond her own pocketbook.

Banks has made zero industry experience a prerequisite for job candidates.

“I’m looking for fun personalities and being likable,” he said. Because his agency focuses on vacation travel, its agents don’t need to know how to use a GDS, he said, adding that makes it “easier to get people trained and up and running quickly.”

His main source of new hires, he said, is the agency’s website, which uses video and a description of the company’s training and compensation plan to paint an attractive picture of Legacy’s work style. Even interviews are done online, using a downloadable interview app.

Susie Leib, owner of Ambassador Travel in Oshkosh, Wis., finds herself hiring new entrants, as well.

“My hires come from people who are interested and have a passion for travel and customer service,” she said. “We bring them on from the ground up.”

Larger agencies like Montrose Travel in Montrose, Calif., advertise online.

Unlike Legacy, Montrose — No. 41 on the 2014 Travel Weekly Power List — looks for experienced agents. But because it is competing in a tight job market, it offers job security, “great compensation plans” and benefits to attract talent, said Andi McClure-Mysza, co-president of the agency and president of Montrose’s host agency, MTravel.

McClure-Mysza said Montrose does take new entrants for the call center, which handles fairly simple air, car and hotel bookings for loyalty programs.

It also cultivates younger employees; 22% of Montrose staff are under the age of 40, and 29% of those hired in the last two years are younger than 30. New entrants can start in support roles, then move into sales and other areas. The agency has more than 200 employees.

Salaries, benefits on the rise

As demand rises, so does compensation for both salaries and incentives. The ASTA study found that roughly three- quarters of agencies it surveyed pay a straight salary, but many agency heads who were interviewed used some type of incentive-based pay, and a few have introduced it in just the past few years.

Robert Joselyn, president and CEO of Travel Agency Management Systems, the agency benchmarking and best-practices group, said he has been seeing a shift toward incentive-based pay for quite some time. Agencies use incentives in a variety of ways, he said. Some do a combination of base pay with incentives added; others do straight commission.

Legacy Travel’s Banks does straight commission, but he bases pay on the average of the last 12 months of sales to even out the peaks and valleys of the Texas vacation travel seasons. He laid out the economics of agency pay on the agency website, asserting that the typical vacation Legacy Travel sells generates $250 in commission and the agent share is 35%; an agent who averages seven sales a week would get a gross monthly paycheck of $2,450.

But many of his agents make much more than that, with their pay going up as they get better at doing their job. Like many agencies, he also offers a 401(k) and health insurance. On top of that, however, he pays for employees’ membership in Massage Envy, which means agents get one free massage per month and discounts on additional massages.

Interviews revealed that many agents see their pay rise when agencies move to incentive-based compensation. Leib said that when she switched to incentivized pay a little more than two years ago, her top agent doubled her income. 

Dave Lovick, co-owner of seven Travel Leaders locations in Minnesota and Wisconsin, said his agencies’ shift to commission-based pay two years ago has also increased his agents’ earnings.

Agencies that don’t use incentive-based pay are increasing the salaries they pay. For example, Minoletti pays his agents straight salaries but has increased them by about 30% in the past five years. The agency is paying more because it is asking its agents for more, and in return, Minoletti said, they are producing. He has floated the idea of incentive-based pay, but so far the staff prefers a guaranteed salary rather than the stress of making target numbers.

Largay Travel in Waterbury, Conn., uses an incentive plan that awards bonuses based on sales performance. It also has a profit-sharing program. As a result, Largay advisers are earning more, said the company’s president, Amanda Klimak.

Although some owners are concerned about where the industry will find talent in the future, several also pointed to travel’s widespread appeal.

Like many agents interviewed for this report, Leib said that people tell her several times a week, “You have the best job in the world,” or “I’d love to do what you do.”

McClure-Mysza said Montrose gets many applications from agent wannabes.

Among agency owners interviewed for this report, Jay Johnson, president of Coastline Travel Advisors in Garden Grove, Calif., was the most bullish. He said he had never had any trouble finding good talent, and he’s not concerned about finding it in the future.

“If anything, it seems as though the talent pool is getting even better,” he said. “You should see some of the resumes that come into my office from applicants around the world.”

Comments
JDS Travel News JDS Viewpoints JDS Africa/MI