Travel advisors are the most trusted source of information, as news surrounding COVID-19 and subsequest travel regulations change regularly.
That's according to a new survey, conducted by Strategic Vision, a consultancy specializing in the luxury travel and lifestyle industries, which found that more travelers in the survey said they are satisfied with the information they’re getting from their travel advisors (64%) than from airlines (59%), hotels (45%), or other suppliers.
Additionally, 32% of respondents said they’re now more likely to use a travel advisor as a result of the pandemic. “The constant changes in rules and restrictions is worrisome and frustrating,” said one client. “This reality makes using a travel professional more important than ever.”
But many travel advisors spent 2020 booking, rebooking, and cancelling trips, which, for many, meant no commissions.
“I can’t tell you how many advisors told me about the countless hours they spent rescheduling trips, figuring out quarantine rules, and pleading for refunds. But if the trip ultimately didn’t happen, they didn’t receive their commission,” said Peter J. Bates, president and founder of Strategic Vision. “More work for less pay is not going to cut it in the future. The consulting model, where clients pay travel advisors a set retainer, is only going to become a greater necessity.”
The study found that almost all (94%) said their 2020 revenues were down over the previous year, with the vast majority reporting decreases of 70% or worse. More than three-quarters (76%) of advisors said they had reduced the hours and/or pay of their employees, while 55% resorted to layoffs and/or furloughs.
According to Strategic Vision, 41% reported increasing their number of independent contractor (IC) advisors, which suggests that full-time employees were replaced by (or converted to) freelancers.
With one in three advisors saying that maintaining staffing levels is their biggest challenge in 2021, the appeal of non-salaried IC’s will continue to grow. “The pandemic has made clear that the host agency model — where an agency can expand or reduce the number of IC’s on its team as demand fluctuates — provides the flexibility that travel management firms need to succeed,” said Bates. “For better or worse, this is the way the industry is going.”
Stimulus funds helped the travel advisory industry survive the pandemic, with more than 82% of firms in the survey took advantage of PPP funds or other programs last year, and 78% said they would do so again.
“I’m concerned about maintaining staff if travel does not improve quickly enough and if significant government funding is not available,” said Liz Sutton, president of Alabama World Travel, told Strategic Vision. “I’m hopeful government funding will carry us through next year, because I believe travel will begin to pick up by the second half of 2021, and we need a way to retain our trained travel team despite low revenues.”
The respondents largely see 2021 as a recovery year, with 76% expecting to increase their revenues over 2020, according to the survey, with only 12% said they estimate revenues returning to 2019 levels this year, compared with 51% in 2022 and 35% in 2023 or beyond.
“International travel will take longer to recover, so there will be fewer high-margin, ‘big-ticket’ trips this year,” said Bates. “In addition, travel has become more complex, so advisors will spend more time managing a booking — which also impacts profitability.”