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Travel industry salary increases projected at 3% for 2015: Conference Board

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  •   11-14-2014  10:18 am

Travel industry salary increases projected at 3% for 2015: Conference Board

Canadian travel industry employees can expect a 2015 pay increase in line with the national average, according to a new report by the Conference Board of Canada.

Nicole Stewart, senior research associate with the Conference Board, said the Canadian travel industry, classified in the report under the Services/Accommodations sector (which would include everything outside of the transportation aspect of travel), is anticipated to see a 2015 base pay increase of three per cent. This is slightly above the national average of the 2.9 per cent projected across all industries for non-unioized employees in the coming year, as described in the Conference Board's 2015 Compensation Planning Outlook. That national average increase remains unchanged from estimates made for 2014.

Nicole Stewart, senior research associate, Conference BoardAccording to the Canadian Tourism Human Resource Council’s 2012 Canadian Tourism Sector Compensation Study, travel agents were found to earn either a median salary of $31,377 or an hourly wage of $13.28, with hourly wages being the more common form of payment for the position. That same study found that the national median salary for agency managers, generally a salaried position, was $46,600.

Western Canada's current economic boom, attributed largely to the region’s vast energy and natural resources, is having a ripple effect on other industries, said Ian Cullwick, the Conference Board's vice-president of leadership and human resources research, with the transportation and accommodations sectors in those provinces being two of the closest beneficiaries as workers travel across the country for employment.

“Those provinces, from an economic perspective, are going to enjoy higher rates of hotel and transportation requirements,” Cullwick said. “I spend a fair bit of time in Calgary and the in-bound flight is half-full of Atlantic Canadians going out west to work. For business-related travel, Western Canada is continuing to drive a lot of activity, especially in places like Calgary, Saskatoon, Fort McMurray and Vancouver.”

Overall, the Board's report is very similar to its 2014 edition – albeit with some key differences, Cullwick noted.

“There’s some big geographic differences,” he said. “The Conference Board of Canada has been doing this report for more than 40 years and this is the first time that Saskatchewan has the dubious distinction of leading the country from a geographic point of view, with a forecasted average base pay increase of 3.6 per cent. Alberta is projected at 3.5 per cent while Atlantic Canada is at 2.3. Western Canada continues to be a really strong labour market and because the demand is still strong, the region is experiencing higher growth rates of pay.”

Ian Cullwick, VP, leadership & human resources research, Conference Board

According to Cullwick, 2016 is being seen by the Conference Board as a peak year for the exit of the baby boomers from the workforce (allowing them to pursue other interests such as travel, Cullwick noted), which will require businesses to act sooner rather than later in developing more sophisticated attraction and retention strategies within their human resources departments to draw new workers.

As for the impact of that shift on compensation rates, Cullwick said the Board predicts increasing rates – and leverage – for top employees in those sectors requiring highly-skilled workers, while other industries may see increased amounts of turnover in the years to follow.

“Our view is that for select industry sectors who truly rely on skilled, talent and knowledge workers, the compensation rates will likely creep up in 2016 through 2018,” he said. “The other hypothesis we have, which may apply more broadly, is that generally speaking there will be higher levels of turnover. There’s a real cost to that; as companies become more sophisticated with their HR strategies, and elevated expectations of the boards and CEOs, there’s going to be a need to put in more progressive HR and compensation programs to attract and keep better people. If they do that, they’ll have better business success.”