The New Hosted Travel Agent Report, 2020
35% of hosted agents who completed our 2020 survey were new hosted agents. What do I mean by new? I’m talking about agents with 0-2 year of experience.
That’s a lot. We love newbies, and one of our favorite ways of expressing travel agent love is to write a report about them. New hosted agents . . . this one’s for you.
This report is dedicated to this dynamic and enthusiastic segment of the industry. We’ll look at who they are, what they’re selling, how they operate their business, how much time and money they invest in starting their business.
This report is a fantastic (and I daresay singular) opportunity for industry professionals to take a pulse on the future of the ever-growing hosted agent channel. So let’s not dilly dally!
Infographic: New Hosted Travel Agent Report
Below is a visual overview of our new hosted travel agent infographic. Take a look at the crib notes as you read the article!
New Hosted Travel Agent Experience
Just how new is new? We're talking about agents with 0-2 years experience. But a lot happens in those early years. So let's take a look at how much experience our newbies had. 40% of hosted newbies had one year of experience under their belt. Here’s the entire breakdown:
This distribution is a shift from last year when new agents primarily had <1 year experience (36%) .
Median Age of New Hosted Travel Agents
You can be new to travel yet seasoned in life. The median age of the newbie hosted agent was 48 years, six years fewer than the median of all hosted respondents (54). 1.
The majority of newbies, 53%, were Gen Xers. This is an eleven point increase from last year, when only 42% of travel agents were Gen X. There was also an 8 point bump in the percentage of millennials who entered the industry, 27% compared to 21% last year. These increases were at the expense of a dwindling representation of Boomers who dropped from 29% last year to only 18% this year.
Gender Distribution of New Hosted Travel Agents
84% of newbies identified as women. This is two points lower compared to new agents in 2019 (86%), and equal to hosted agents overall in 2020 (84%).
The travel agent industry is a female-dominated sector. If new agents are an indication of the future demographic landscape of gender distribution, the data suggest this trend won’t change anytime soon.
Ethnic/Racial Background of New Hosted Travel Agents
In 2019, our new agent data indicated that the needle may have been moving toward more diverse representation in the hosted travel agent segment. The data from our 2020 report confirms this trend.
12% of new hosted agents identified as Black/African American compared to 9% of hosted agents overall, and 9% identified as multiracial compared to only 5% overall.
Race/ethnic background of new travel agents diverged from hosted agents’ overall results: Only 69% of new travel agents identified as white/Caucasian, compared to 79% of hosted agents overall.
Following suit, 12% of new hosted agents identified as Black/African American compared to 9% of hosted agents overall, and 9% identified as multiracial compared to only 5% overall.
Below is an entire breakdown of race/ethnicity of new hosted agents compared to hosted agents overall:
This indicates the needle continues to move toward attracting more racial/ethnic diversity to the hosted travel agent channel.
Did New Hosted Agents Work Part Time or Full Time?
When it comes to hours worked, new agents are less likely to work full-time hours right out of the gate compared to their more experienced peers. In 2020, 39% of new agents reported working full-time and 61% reported working part-time.
This trend is a stark reversal of their more experienced hosted peers’, a segment where 74% reported working full-time.
These responses support the fact that it takes time to set up a travel agency and to generate income. Anecdotal evidence (from our 7 Day Setup Facebook Group and 7 Day Setup Travel Agency Challenge) suggests that many who are new to industry don’t exclusively sell until they’re able to develop a sustainable income from doing so.
However, new hosted travel agents moved toward working full-time as they gained experience. Higher percentages of new hosted agents reported working full-time as they approach three years in the business. Below the chart looks at what percent of agents worked full time and part time according to experience:
Between one and two years, the percentage of new hosted agents working full time increased significantly, from 35% to 50%.
Travel Agency Startup Costs for New Hosted Travel Agents
Travel agency startup costs vary A LOT. In 2020, the range of startup costs varied between $0-$20,000. Not so helpful if you're trying to get an idea of what you can expect for an investment.
Startup costs vary depending on how much you're investing in travel education and certification, what type of agency you're running, how fancy a website you want and a ton of other factors.
The good news is that we can give you a pretty good idea of how much you can expect to spend if you're a new hosted agent. Here's new hosted agent startup costs, served 4 ways:
1. Average Startup Costs for New Hosted Agents
The average startup cost for new hosted agents in 2020 was $2,478.
However, there was a considerable range when it came to startup investment, from $0-$20,000. So an average might not be the best indicator of how much you can expect to invest. Let's look at it a few more ways.
2. Median Startup Costs for New Hosted Agents
The median, or middle value 2 offers a very different perspective on what you can expect to invest.
Since the median pulls the middle value, it's not impacted as heavily by outliers (those who invest $15-20K) like the average is. For that reason, the median value, $1,500, may be a more accurate measure of anticipated startup costs for new agents.
While the average startup cost declined, the median startup cost actually increased from last year where the median was $1,000. One reason for this is fewer agents reporting very low startup costs: In 2019, 44% of new hosted agents reported startup costs under $1,000. However in 2020, only 26% of agents reported they spent less than $1,000 on their initial investment.
Confusing? Read below where we’ll chat on the range of startup costs!
4. Percent of startup investment within different ranges
Below the graph indicates what percentage of new hosted agents invested among different investment ranges in 2020:
You can see from this graph, that most new hosted agents (40%) invested $1,000 - $2,000.
But we have one more tool to help you figure out what you can expect (because we're literally just serving up a data buffet here).
3. The Mode Startup Costs for New Hosted Travel Agents
Mode is a fancy statistical word for the startup cost that new hosted agents reported with the highest frequency. This is another good way to look at the most common startup cost. The mode this year was $1,000.
None of these data are too surprising. Looking at startup costs from these angles will offer a pretty clear idea of how much you can expect to spend to start your agency.
Income Data for New Hosted Travel Agents
Now, for a little sad news: We had a glitch in our survey this year. What this means is that we lost too much potential income data from new hosted agents to offer an accurate reflection of hosted newbies.
In 2019, hosted travel agents with two years experience earned nearly 4x more than those with one year of experience.
I’m verklempt. Please enjoy this brief intermission while I shed a few tears over the lost data . . .
Now for a little good news: While we’re unable to offer reliable income data for this segment, in our past surveys, income has increased exponentially in the first few years. Just for funsies, let’s take a walk down memory lane and take a brief look at past data.
In our 2019 survey, hosted travel agents with two years experience earned nearly 4x more than those with only one year of experience ($12,492 compared to $3,250). The year prior, agents with 2 years earned over 5x more than those with one year experience ($9,845 compared to $1,817).
Back to our regular programming. But before I move on, I want all cat lovers to know that I did search for a “sad cat” but cats apparently don’t experience sadness according to sites with free images.)
Client Volume Increases in First Two Years for New Hosted Agents
Another indicator of growth (besides income) is the increase in client volume as new hosted agents gain experience.
Below, the graph look at how many clients new agents reported having in 2020:
The percentage of new hosted agents with more than 50 clients increased consistently in the first years of starting an agency. This is an indication of steady growth in the early stages of starting an agency.
When it came to travel agent certifications and membership in travel associations, new hosted travel agents were in step with their more experienced peers.
Travel Agent Certifications
58% of new hosted agents had at least one certification overall. This is a decrease from last year’s results when 64% of new agents reported having a certification.
However, new hosted agents with one or two years experience were more likely to have a certification. Here’s how it broke down:
Travel Association Membership
59% of new hosted agents reported belonging to at least one travel association:
There is a significantly higher percentage of new hosted agents who reported having membership to a travel association compared to the previous year when only 26% reported the same.
Association membership became more likely as new agents gained a foothold in the industry. Below is a breakdown of new hosted agents with at least one association membership according to experience level:
The percentage of new agents with association membership jumped from 47% to 66% between zero year’s experience to two years of experience.
What Drove Participation Among New Hosted travel Agents?
Association membership significantly increased among the new hosted agent channel in 2020. But why?
Of the new hosted agents who belong to an association, 52% belong to ASTA.
While we don't ask motivations for joining associations, we have a few ideas on why membership is becoming more commonplace among new hosted agents. The American Society of Travel Advisors (ASTA) made huge strides to advocate to protect hosted agents' independent contractor classification in 2019 (California's AB-5 bill).
This helped amplify the importance of larger organizational support for independent agents. In the wake of this advocacy, ASTA also continued to voice the impact of COVID on the travel agency in early stages of the 2020 CARES Act.
ASTA’s support to exempt independent travel advisors from California’s AB 5’s employee classification and their industry advocacy during the unfolding pandemic strengthened relationships with the hosted agent channel.
ASTA has strong representation for membership among new agents: Of the new hosted agents who belong to an association, 52% belong to ASTA.
New Hosted Agent Niche & Products
For the first time, we asked agents if they were generalists, had a niche, or were working toward a niche.
Overall, a lower percentage of new hosted agents are generalists compared to hosted agents overall, 28% compared to 38% respectively.
Here’s how new hosted agents replied:
14% of new hosted agents have a niche, and 58% were working toward a niche. Overall, a lower percentage of new hosted agents are generalists compared to hosted agents overall, 28% compared to 38% respectively.
This suggests that entering the industry with a niche may be becoming more common practice.
Among the 14% with a niche, the top three reported in 2020 were:
- Ocean Cruise: 18%
- Family Travel: 17%
- Destination Specialist: 17%
Below, the chart indicates all niches new hosted agents reported:
What Products Did New Hosted Travel Agents Sell?
In addition to niche, looking at products sold offers another angle to look at what new hosted agents were selling in 2020.
The top products in 2020 were:
- Ocean Cruises: 26%
- All Inclusive: 25%
- FIT: 19%
Below, the chart indicates all niches new hosted agents reported selling:
How does this compare to their experienced hosted counterparts? Experienced hosts reported the same top three products as new hosted agents.
New Travel Agent Job Satisfaction
Though the survey reviews income from 2019, advisors took our survey in 2020, in the middle of a pandemic . . . not exactly the easiest time to be launching or growing a travel biz. These circumstances would likely impact respondents’ attitudes at the time they took the survey.
That said, half of new hosted agents were either “super happy and satisfied” (14%) or “happy and satisfied” (35%).
Here’s how it broke down:
What were the woes of new hosted agents? Not surprisingly, the number one challenge for new travel advisor entrepreneurs is finding new clients.
But new hosted agents also reported many rewards to selling travel. Here’s what the hosted newbies love about their jobs:
The top answer was “job flexibility/owning my own business”, followed by “making peoples’ dreams come true” and a third-place tie for “gratitude/relationships” and “I love everything about my job.”
3 Key Takeaways on the New Hosted Travel Agent Segment
1. A comparable percentage of new agents took the survey this year (compared to last year)
35% of agents who responded to our income survey were new. This is comparable to last year, when 37% of agents who responded to our survey had 0-2 years experience.
2. New agents may diversify the hosted advisor channel
A higher percentage of new hosted travel agents identified as BIPOC (Black, Indigenous, people of color), registering a higher percentage of responses in all non-white/Caucasian categories when compared to hosted agents overall.
3. New hosted agents transition to working full time
While only 32% of hosted agents in their first year of business reported working full time, this number jumped up to 36% in the 2nd year, and 47% in their 3rd year. The takeaway? New agents steadily transition to working full time in the first few years of starting their agency.
A Huge THANK YOU
In order to get this great data, we rely on industry partners who support our work and push the survey out to their networks. Who are these fabulous host agencies, franchises, and travel organizations?
A colossal thank you to these hosts and franchises: ASTA, CCRA, Travel Leaders Network, Ensemble Travel Group, Destination Wedding University, Gifted Travel Network, KHM Travel Group, Nexion Travel Group, Travel Planners International, Travel Quest Network, and Uniglobe Travel Center.
This data doesn’t just materialize in my brain. Far from it! Huge thanks to this year's data whisperer, Bridget Lee, who endured a barrage of Slack messages from me in the middle of the night. April Oliveira created all the snazzy images and infographics for all our survey reports this year. (Let’s face it, it’s the part that really gets your attention).
Steph Lee, HAR’s founder, is the brainchild of this whole survey project. Without Steph, you’d be by your lonesome without this leading industry data.
The Method to Our Madness
HAR’s income survey was conducted in July and August of 2020. This report includes all new hosted travel agents with 0-2 years experience. A total of 176 new hosted travel agents fit the criteria for this report.
THE NITTY GRITTY
We know some of you may be seriously loving our data and looking for a few more details on the process.
Here's an overview of how we arrived at our numbers:
1. Respondents had to fit criteria to be included in this income report:
2. Income data is pre-COVID. HAR’s income survey was conducted in July and August of 2020. For this reason, the data on startup costs are not reflective of a post-COVID industry.
3. Hosted agents who also had their own accreditation or owned a franchise were included in this data. A fraction of a percentage of new hosted agents also had their own accreditation (1% ) or owned a franchisee (1% ). We included these agents in our hosted agent report.
4. We round to the nearest percent or dollar. What can I say? It's easier on the eyes when you're wading through so much data. (Sorry, decimal points. We still love you.)