TORONTO — Travel agencies are feeling the heat from suppliers that accept direct bookings from consumers, says anew survey from TRAVELSAVERS Canada.

Conducted among TRAVELSAVERS Canada agency owners and managers from Aug. 12-26, 2024, the survey identified various pain points, the greatest besting competition from suppliers that take direct bookings (54%). Competition from online travel agencies (OTAs) ranked second (33%). Competition from other agencies and AI were not seen as major issues.

“Suppliers who prioritize direct bookings over the travel advisor network are missing the bigger picture,” said Jane Clementino, Senior Vice President and General Manager, Canada. “Those who support agencies understand that clients who book through advisors not only enjoy enhanced travel experiences but also tend to invest more in their journeys. Advisors offer invaluable services, tailor-made itineraries and the reassurance that comes from expert guidance. All that leads to higher satisfaction and loyalty.”

STAFFING WOES

With demand for travel advisor services rising, agencies are facing a shortage of qualified consultants. According to survey results, 43% of those surveyed identified recruiting and hiring advisors as a challenge. 

This scarcity of advisors is creating other challenges for agencies, including concerns about handling client requests and bookings (11%), as well as mental health and exhaustion (9%). 

As such, agencies are increasingly turning to independent contractors (ICs) to bolster sales, instead of hiring frontline staff. A total of 22% of respondents said they will add at least one IC this year, with 37% considering it and 41% saying they will not bring on any. Agencies looking to grow the number of ICs want to add three or four of them, with some saying they will take as many qualified consultants as they can find.

Forty-four percent of agencies surveyed plan to hire more staff advisors this year, with 26% considering it and 30% not planning to hire. The agencies that want to add staff advisors plan to hire 2-3 more.

ECONOMIC MOOD

The current economic climate continues to weigh heavily on the minds of travel agency owners and managers, with 31% of those surveyed saying the rising cost of travel is a challenge and 13% saying they’re apprehensive about a drop in customer spending due to economic concerns.

But despite current market uncertainties, TRAVELSAVERS Canada is still seeing growth for 2024 and beyond, said Clementino.

“As we move through this year, we’re seeing substantial momentum across key segments, with several showing double-digit growth. This builds on an already strong performance in 2023, and our forecast for 2025 is really encouraging,” she said. 

AGENCY SNAPSHOT

The survey also found key findings on the size and location of travel agencies today. Forty-four per cent of agencies have five or fewer advisors, while 7% have more than 20. Seventy per cent are based in a physical location such as an office or storefront, while 30% are entirely home-based. Staff advisors account for 57% of agency consultants, while the share of ICs is 43%. And fifty-four per cent are full-time advisors, while 46% work part-time.