Direct bookings, OTAs among “greatest challenges,” say TRAVELSAVERS agencies in Canada

Travel agencies affiliated with TRAVELSAVERS Canada have named their “greatest challenges” in a new survey that was shared Monday (Sept. 30).

The report sheds light on pain points, and how agencies are combatting the competition posed by suppliers who accept direct bookings from consumers, as well as online travel agencies.

On challenges, competition from suppliers who take direct bookings was named by 54 per cent of those polled, while OTA competition was named by 33 per cent.

However, competition from other agencies and from 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, in a press release.  “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

Agencies also continue to face a shortage of qualified consultants. Forty-three per cent of those surveyed identified recruiting and hiring advisors as a challenge, says TRAVELSAVERS.

The scarcity of advisors is creating other challenges for agencies. Eleven per cent of respondents are concerned about handling client requests and bookings while shortstaffed. Nine per cent worry about the mental health of advisors, specifically exhaustion.

Agencies are increasingly turning to independent contractors to bolster sales, instead of hiring frontline staff, the survey shows. Twenty-two per cent say they will add at least one IC this year, with 37 per cent considering it and 41 per cent saying they will not bring on any.

Agencies looking to grow the number of ICs want to add three to four of them, with some saying they will take as many qualified consultants as they can find.

Forty-four per cent of agencies surveyed plan to hire more staff advisors this year, with 26 per cent considering it and 30 per cent not planning to hire.

The agencies that want to add staff advisors plan to hire two to three of them, the survey says.

Economic mood

Travel agency owners and managers are concerned about the impact of the current economic climate on their business, according to the report.

Thirty-one per cent of those surveyed say the rising cost of travel is a challenge, and 13 per cent are apprehensive about a drop in customer spending due to economic concerns.

"Even in the face of current market uncertainties, we are 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."

Agency snapshot

The survey also gathered information on the size and location of travel agencies today:

● Forty-four per cent of agencies have five advisors or fewer, while seven per cent have

more than 20 advisors

● Seventy per cent are based in a physical location such as an office or storefront while 30

per cent are entirely home-based

● Staff advisors account for 57 per cent of agency consultants, while the share of ICs is 43

per cent

● Fifty-four per cent are full-time advisors, while 46 per cent work part-time

Survey Results

Greatest challenges facing agencies

● 54% competition from suppliers who take direct bookings

● 43% recruiting and hiring advisors

● 33% competition from online travel agencies

● 31% rising cost of travel

● 13% drop in customer spending due to economic concerns

● 11% handling client requests and bookings while short-staffed

Number of advisors at agency

● 44% 1 to 5

● 31% 6-10

● 17% 11-20

● 2% 21-50

● 5% More than 50

Advisor headcount compared to 2019

● 41% up

● 22% the same

● 37% down

Staff advisors compared to ICs

● 57% staff advisors

● 43% ICs

Agency location

● 70% office-based

● 30% home-based

Advisor schedules

● 54% work full-time

● 46% work part-time

Agencies planning to add staff advisors this year

● 44% yes

● 26% maybe

● 30% no

Agencies planning to add ICs this year

● 22% yes

● 37% maybe

● 41% no

Owners and managers of TRAVELSAVERS Canada affiliate agencies took the survey from August 12 to 26, 2024.

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