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New study shows how Independent Contractors are changing the face of the retail travel industry

Tuesday, June 12, 2018

New study shows how Independent Contractors are changing the face of the retail travel industry

Key findings from a new study called ‘The Changing Face of Travel Agents’ show a dramatic 10-year shift from travel agents working primarily as employees (71% in 2008) to working primarily as independent contractors, or ICs (62% in 2017). Not only that, but 92% of ICs and 22% of employees now say they work from home.

While The Travel Institute surveyed U.S.-based agents, the study has implications for the Canadian market too as travel industry trends in the U.S. echo on this side of the border as well.

The Travel Institute says its research analyzes how agent roles and motivations have changed over the past decade and also identifies key parameters that define successful travel agents.

The study, to be released in two phases, also looks at the correlation between certification and success and the positive career outlook among travel professionals. But the most eye-opening stats focus on the “explosive growth” of the independent contractor (IC) demographic.

TTI President Diane Petras, CTIE, says The Changing Face of Travel Agents zeroes in on the four ‘Cs’ of an ever-changing agency community: composition, certification, contentment, and compensation.

“What a difference a decade makes when it comes to this comprehensive look at the changing dynamics of our industry,” says Petras. “While we certainly wanted specific certification analytics measured, The Changing Face of Travel Agents is much bigger than that. These metrics are meant for our entire industry to analyze and filter through to what means the most to them.”

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Petras notes there has been “a significant change” in several key indicators related to the makeup of the travel agent community over the past 10 years.

Agents have shifted from working primarily as employees (71% in 2008) to working primarily as independent contractors or ICs (62% in 2017).

The workplace itself has also changed with 92% of ICs and 22% of employees working from home in 2017.

Although all ICs are technically ‘business owners,’ the majority (57%) identify themselves as travel agent “counselor” or “consultant” rather than “business owner.”

Analysis into the background and aspirations of the current IC community also reveals sharp differences from the traditional travel agency employee.

  • ICs tend to be much newer to the industry than employees, with 47% having worked less than three years in the travel business. At the other end of the spectrum, 46% of employees have more than 20 years’ experience in the industry compared to 18% of ICs.
  • ICs are much more likely to be part-timers who are pursuing a new career in travel with 36% working 20 hours per week or less compared to 8% of employees. At the other end of the time clock, 46% of employees work more than 40 hours, compared to 22% of ICs.
  • While both employees and ICs indicated the opportunity to travel as the top draw to the industry (76% and 75% respectively), among the other factors attracting ICs to the business were ability to work from home (69%), be my own boss (61%), flexible hours (58%), and financial opportunity (44%).
  • Four in five ICs belong to a host agency, looking to their host for support, training and education, access to suppliers, and higher commission levels.
  • ICs (69%) are significantly more dependent than employees (17%) on “commission only” for their compensation.
  • Just 10% of ICs receive any remuneration for the cost of professional education, compared with 46% of employees.
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