Are Travel Sellers Ready to Hire?

A year ago, the retail travel business was defined by postponement of hiring and expansion plans, not to mention wage freezes and even cutbacks. Are staffing plans different now?

Last week, in an online poll, Travel Market Report asked agents if they planned to hire in the coming year: 20% said the tax credit was a nice incentive and in fact, they would hire new personnel; 7% said they were hiring but the credit had nothing to do with it; 40% said that they were very busy but not yet profitable enough to hire and 33% said business was too slow to hire. 

On the one hand, some agents told Travel Market Report that there has been no substantive improvement in the bottom line. However, many reported volume has been so strong this winter that they’re struggling to keep up. Said one veteran agent: “In my own case, I sure do need to hire people, as we have done attrition for the past two years. Now, we now don’t have the customer service capabilities. I’m out doing the selling, and my administrative work is not getting done.”

All agents say they’re watching the big-picture economic situation. Consumer confidence fell to a 10-month-low in February. As for overall employment, even the Federal Reserve Chairman said the jobs market is expected to remain weak.

Job Stimulus Bill a Plus

Hence, the Senate recently passed a jobs stimulus bill that includes a provision to give businesses hiring the unemployed a one-year break from payroll taxes and a $1000 tax credit if those workers stay on the job for a full year. It will also exempt employers who hire the jobless from paying the 6.2 per cent Social Security tax in 2010.

How will this bill affect the typical travel agency? “It would weigh in my decision making; but it’s not make or break in hiring,” responds Scott Kertes, Hartford Holidays, Williston Park, N.Y. “If I had a need and the right person came along, that’s what is decisive — the legislation is a factor, an important consideration, but not a decisive factor.”

Luxury Business Up — But Not Enough

Kertes noted that his luxury business is picking up. “From where I sit, primarily on the luxury side, although I remain cautious, 2010 is showing strong recovery.”

Kertes explained that he’s not alone, citing a surge of activity overall with luxury travel now, saying, “The luxury traveler was cautious about spending before, but now they’re relatively confident that the economy has already hit bottom. It’s a matter of pure economics. The budget-and medium-spend travel markets have statistically lost the most number of jobs, lost the highest percentage of their retirement savings. They’re going to be the last section of the population to recover. The recovery of the high end is already happening.”

Of course, the ability of any small business to resume hiring depends on the bottom line. “I’m not looking this second to go out and hire more people, but it’s always a possibility depending on how fast business grows,” Kertes said. “I’ve observed that qualified people are willing to work for less money because many agents have been laid off or fired by other companies that have either been bought or closed down.”

But even in this day and age of independent contractors, the last thing anyone wants to do is respond to a spurt of sales activity by hiring someone, only to let them go after three months, if business slows once again.

Annette Youngbauer, Travel Leaders, Delafield, WI has a more corporate-oriented model than Hartford Holidays, but, like Kertes, observed that whatever the model, the hiring situation in the travel business is mainly one of uncertainty.  “Though these are cloudy days, we’re seeing patches of sun,” she noted. “In terms of the employment situation in our industry, that doesn’t mean that the bill recently passed by the Senate combined with the increase in business means we’re going to say, ‘Wow! Let’s run out and hire a whole new slew of employees.’ I do think the legislation helps, and I do think the travel business is moving in the right direction, but while volume is up, from a standpoint of a typical travel agent gross income is still down, because overall pricing is still down.”

More Work; Less Income

And there are other complicating factors. “It’s a really tough job right now,” said Youngbauer. “The amount of time it takes to do a booking is greater than it used to be, because we’re doing so many things now that we didn’t have to do before.”

Conventional wisdom says the Internet saves time, but the truth is the reverse in other aspects of the agency job. “There’s more in terms of pre-registering customers, as we get the TSA information and the like,” Youngbauer cited as one example. “Plus, the general public is doing more shopping, so we field more inquiries. It’s kind of a strange push/pull thing; it takes us more work to do the job so we inherently need the bodies, but there’s less income because prices are down.”

Youngbauer emphasized: “It is very stressful for our agents now. They’re trying to be competitive, but they’re stretched and pulled a little thinner. They have issues they didn’t have to do before. We have less airline lift, less airline seats, way more airlines making frequent schedule changes that affect their customer. We’ll have customers booked, with seat assignments, and the airline will say, `No we’re not flying that flight.’ Or, if the plane has not been cancelled, airlines more routinely change the flight number and equipment than in the past, and clients lose that seat assignment.”

One agent said that the main way the jobs stimulus bill will affect hiring is to give a slight edge to the applicant who has been without a job over the one who is changing companies.