A closer look at agency earnings
The travel agency community has faced a persistent problem in recent years, one far preceding the pandemic: the aging out of the trade (see chart on Page 17). And while today only 8% of respondents reported being younger than 35, there is evidence that agencies are bringing new advisors into the fold: Almost half of respondents have worked in travel for 10 years or less. In 2019, that figure stood at less than one-quarter, or 21%.
Throughout the pandemic, host agencies in particular have reported influxes of new-to-industry advisors. The Travel Institute said attendance at its introductory web-inars are up 50% since 2019. Those gains have to be couched with the loss of advisors who left the industry during the pandemic, but many indicators point toward a more youthful trade going forward.
— Jamie Biesiada
The survey also found that while nearly one-quarter of traditional agencies, 24%, have been in business more than 30 years, 23% were founded in the past five years. In 2019, that figure stood at just 10%, indicating more new entrants to the agency community.
It takes time to develop a book of business — many agents don’t start making significant income for at least the first year of their business and sometimes more. Fully 69% of respondents working two years or less reported making less than $25,000 annually. For agents in the business more than 30 years, only 26% reported making less than $25,000 annually.
Income levels indicate that lower earners are less likely to be full-time advisors: Most respondents reporting annual incomes of $100,000 or more are full-time agents, and it’s their primary or secondary income source. Those who reported being part-timers are much more likely to earn under $50,000 annually. This highlights a paradigm in the industry: Part-timers are often viewed more negatively than those advisors who devote themselves fully to their travel careers. But in most cases, to earn what many would consider a livable income, advisors need to work for at least a few years to build up their clientele.
One of the fastest-growing segments in the industry has been that of independent contractor (ICs). ASTA has been tracking the growth of the IC segment, which makes up a key part of the Society’s membership base, numbering some 7,000. While many are affiliated with a host agency or consortium, though, they tend to think of themselves as “independent.” In total, 34% of respondents identified themselves as hosted ICs, down 20 percentage points from last year, while 28% identified as fully independent agents, compared with 17% in 2021. But, of that 28%, 66% reported being affiliated with a host agency and 80% reported being members of a consortium.
Regardless of how they self-identify, the home-based segment of advisors is enjoying record sales. Respondents reported their highest gross book-ings yet in 2021, clocking in at $920 million. The previous high was $899 million in 2018.
No matter an advisor’s tenure, income level or sales numbers, though, members of the trade seem to be reaching the kind of clients they want. The majority of respondents, 33%, said their clients book with them for their customer service, followed by personal relationship (31%) and the advisor’s expertise (30%). Only 3% said clients book with them because they offer the best price.