The New Hosted Travel Agent Report, 2019
Here at HAR, we're all about bringing newbies into the fold. 37% of respondents of our latest Travel Agent Income Survey were new agents. That's a lot. This unique segment of hosted agents faces specific challenges when it comes to starting a thriving travel agency.
This report is tailored to help newbies benchmark their business while it's still budding.
What We'll Cover
Here's a few of the questions this report will answer:
- What can agents expect in terms of startup costs?
- What type of industry engagement is most effective for those in the early stages?
- Who is coming into the industry?
- How do new agents run their businesses differently than their more experienced counterparts? Where do trends align? Where do they diverge?
- What are they selling?
Whether you're a new agent here to compare your income and investment to your peers or a travel professional who wants to take a pulse on the direction of the hosted agent segment, you've come to the right place!
Here's a visual of some of the data we'll be mining on the new hosted agent segment:
Demographic Data: Who Are These Newbies Entering the Industry?
First things first: When we say "new agents" (henceforth referred to as "newbies"), we're talking about hosted travel agents with 0-2 years of experience. 1
Why does it matter that newbies have less experience? To give a little perspective, the overall average experience reported in our survey was 7 years. This matters because our data indicates that a lot of good things happen in those 5-7 years in terms of earnings and income (and I'm talking income-increases-steeper-than-the-Empire-State-Building kind of good things).
Among the 37% of new agents who responded to the survey, the responses were fairly evenly distributed when it came to years of experience:
However, just because newbies may have less experience selling travel as a hosted agent, it doesn't necessarily mean they don't have any industry experience. Some may have worked in a different sector of the industry, or have moved from selling travel as an employee to selling on their own.
Being a "newbie" also doesn't mean they lack life experience. The average age of the newbie hosted agent was 48 years, four years fewer than the overall average (52). In fact, reporting at 21%, Millennials are the minority generation among the 2019 new hosted travel agent segment. Newbies were primarily Gen Xers, reporting at 42%, followed by Baby Boomers reporting at 29%.
GENDER & the income gap
86% of newbies identified as women—4% higher than hosted agents overall.
Compared to our subset of experienced agents, the income gap between men and women was even wider, where men reported 38% more income than their female counterparts. Ouch. This is ¢72 to the dollar of their male peers, whereas experienced women earned ¢79.
We're not exactly sure why this income gap exists. However, we threw out a few (data-driven) ideas here in our article, "Who Is the Hosted Agent, 2019."
Race/ethnic background of new travel agents diverged from overall results: New agents identified as white/Caucasian at a 12% lower rate in comparison to overall hosted agent results (70% versus 82%).
Those who identified as Latinx/Hispanic and Multi-Racial also reported at a higher rate than experienced agents (3% and 1% respectively). 1% fewer hosted agents identified as Asian. Below is graph that compares ethnic backgrounds of new and experienced agents:
This indicates the needle may be moving toward more diverse representation in the hosted agent segment.
Travel Agent Income for Newbies
For travel agents, income can take even more time to generate than your average small business. Why? Income from commissions is (typically) not remitted until after a client travels (more on travel agent commissions here!). It takes time for new agents to develop their business and attract clientele, and even when they do start booking travel, the money may take a year or more to land in an agent's bank account since travel may be booked out 4-12+ months.
For this reason, experience has a huge impact on income (especially during the earlier years). In fact, our previous income reports unilaterally indicated that experience had one of the strongest correlations to higher income (if not the strongest).
Agents with 2 years of experience reported almost 4x more income than agents with 1 year of experience.
This trend was reflected in our new agent data as well. Even in its earliest stages, experience plays a primary role in income potential. While the average income for all new agents was $7,106, this number fluctuates between the first and second year of business.
The average income among agents with one year experience registered at $3,250, whereas agents with 2 years reported an average income of $12,492, almost 4x more.
Not only that, but the news gets even better for new full-time agents. Read on, spring chicken.
full-time vs. part-time average income breakdown for new agents
In addition to experience, hours worked had a significant impact on earnings for new agents. New agents who worked full time reported earning an average of $12,000, compared to $3,305 reported by their part-time peers.
Income increased drastically for agents in their second year, regardless of whether they worked full-time or part-time. Here's a breakdown of what new hosted earned in their first year and second year, taking into account their work hours:
Not only do agents earn significantly more from year to year, but full-time agents also enjoyed considerably more income than their part-time peers. But the news gets even better, this upward-earning trend continues as agents become more rooted in the industry.
Do newbies enjoy sales increases? It's tough to say.
On our survey, we ask agents if their sales increased from the year prior. With newbies, this question is a little trickier since only newbies with 2 years experience could reasonably respond to the question. Agents with less than one year experience were not asked about income, and agents with 1 year experience wouldn't have had a full prior year of sales to compare it to.
This is why 50% of new agents responded "N/A" when asked about sales increases.
However, 44% of new agents reported a sales increase from the previous year, and only 6% reported there was no increase from the previous year.
Time and Money. How Much Are Newbies Investing?
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 2019, 63% of new agents reported working part time and 37% reported working full time. In comparison, experienced agents reported at a 25% higher rate that they worked full time. Here's a look:
These responses support anecdotal evidence that newbies often sell travel as supplemental income and/or work a second job as they get started.
However, our data also indicates that new agents move quickly into working full time: From the first to second year in business, there was a 16-point jump of newbie agents who reported working full time (40% among agents with one year experience compared to 24% among those with less than one year of experience). This momentum continues, with a 9-point jump to 49% of agents in their second year working full time. This trend indicates that a considerable number of agents moved toward selling travel full time in their first few years of business.
Money (Startup Costs)
The average startup costs for newbies in 2019 was, $3,083. This is slightly less than last year, when agents reported investing $3,170.
However, there was a considerable range when it came to startup investment, from $0-$30,000. For this reason, the median2 value—$1,000—may be a more accurate measure of anticipated startup costs for new agents.
Here's a breakdown of how much new hosted travel agents invested in their agencies in 2019:
When it came to travel agent certifications and membership in travel associations, new hosted travel agents were in step with experienced travel agents.
travel Agent Certifications
While 64% of new agents reported having at least one travel certification, it had a nominal impact (+6%) on income potential. The percentage of agents with some type of certification is 2% higher than their experienced peers (66%).
Travel Association membership
New agents also followed in step with experienced agents when it came to travel association membership: 26% of newbies reported membership to at least one travel association. Participation rate among new agents jumped 20% between their 1st year and 2nd year—from 18% to 38% respectively.
Like their experienced peers, new agents who reported they were an ASTA (American Society of Travel Advisors) member—15% of 1st-year agents and 30% of 2nd year agents—enjoyed an income average 37% higher than their newbie peers without membership.
New Travel Agent Business Basics
Niche is another area where new hosted agents have fallen into step among overall trends. While the top three niches were the same for new agents as it was for hosted travel agents overall, new agents had a slightly higher rate (+2%) of family travel specialization, falling in a dead heat with ocean cruises.
- Cruise (Ocean), 25%
- Family Travel, 25%
- Destination Specialist, 14%
Here's a long list of niches, ranked in order of their response rate among new hosted agents:
In the graph, "Other" includes a combination of Wellness, Corporate, Medical Tourism, All-Inclusive, and General (all of which received a 1% response rate. Golf, LGBT, and Tours received 0 responses.
New Travel Agent Job Satisfaction
For nearly 1/3rd of new agents, "Finding Clients" is the biggest challenge. This is followed by "Learning the industry" (17%), and "Income is too low/ Hard to make ends meet" (15%). The top two challenges aren't isolated to the new agent segment, with agents overall reporting identical challenges.
"Finding Clients" was overwhelmingly the biggest challenge among new agents. This hardship is reflected the number of clients new agents reported having 2019.
At 72%, the overwhelming majority of new agents reported they had <50 clients. This is in contrast to experienced agents whose number of clients were more evenly distributed:
When it comes to the favorite parts of their job; 28% of new hosted travel agents "love everything about [their] job," 22% enjoy "making people's dream come true" and 22% appreciate "job flexibility/ owning [their] own company."
A breakdown of response rate for challenges and rewards can be found in the infographic above!
Overall, new agents are still happy with their life choices: 96% reported that they'd become an agent again if they could have a do-over; 93% would choose the same niche and; 72% feel fairly compensated. These response rates are within 1% to how hosted agents responded overall.
New agents rated their job satisfaction levels accordingly:
- 34%: "Super Happy & Satisfied"
- 39%: "Happy & Satisfied"
- 24%: "Somewhat Happy & Satisfied"
- 4%: "Don't Ask, It's Depressing"
Overall, new agents generally have the same level of optimism about their career as agents do overall. Like the majority of hosted agents, the majority of new agents felt "Happy and Satisfied" with their job.
But we gotta cut them some slack! They are going through the wringer of starting a new business, possibly learning a new industry, and likely juggling multiple jobs. Hang in there, newbies. We're here for you!
5 Key Takeaways on the New Hosted Travel Agent Segment
1. A smaller percentage of new agents took the survey this year
37% of agents who responded to our income survey were new. While that number is considerably lower than last year—an 11-point drop—they still comprise a significant portion of respondents to our survey.
2.The hosted travel agent sector is becoming more diverse.
There was a 10% increase in hosted travel agents who identified as black/ African American among the new agent segment compared to their experienced counterparts. Other non-white categories—including Latinx/Hispanic, Multi-Racial and "Other"—also received a higher response rate among new agents compared to their experienced counterparts. This indicates the needle may be moving toward more diverse representation in the hosted agent segment.
3. A little experience goes a long way
Our data indicates that while new agents earn significantly less than their experienced counterparts, income drastically increased for hosted agents from their 1st to 2nd year of business. Agents in their 2nd year earned almost 4x more than those with 1 year experience.
4. Many newbies transition into working full time in first few years of business
While only 24% of brand new agents (in their first year of business) reported working full time, this number jumped up to 40% in the 2nd year, and 49% among agents in their 3rd year. The takeaway? New agents move quickly toward transitioning from part-time to full-time hours.
5. New hosted travel agents are happy despite lower income levels
While new agents don't enjoy the same income levels as experienced hosted travel agents, they're still satisfied overall with their profession.
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: Cruise Planners—American Express, Dugan's Travel, KHM Travel Group, Nexion, Outside Agents, Travel Planners International, Travel Quest and our industry partners, Travel Research Online, Destination Weddings University, and Travel Weekly. (Want to join the fun with our future surveys? Drop us a line: hello [at] hostagencyreviews.com)
Past Income Survey Results & Data
Wow. Are you having an information hangover after this huge data party? No? You want more?! You animal, you. Take a look at an entire archive of our income survey results here!
The Method to Our Madness
The travel agents we polled for article were new hosted agents. If this segment is unfamiliar to you, check out this article, "What Is a Host Agency," which will give you a foundation for this unique sector of the travel industry.
Let's dive into the geeky nuts-and-bolts stuff about how we arrived at such a fabulous frenzy of travel agent data.
Dr. Maga Gei helped us crunch numbers for our survey. By "help," I mean she did all the heavy lifting when it came to finding numbers. We know some of you may be seriously loving our data and looking for a few more details on the process. For this article, it's relatively simple:
1. For this article, we tallied new hosted agents: Just how new are newbies? Well, for the purposes of this survey, we consider travel agents with fewer than 3 years experience "new."
2. Income data in article is for agents with 1-2 years of the experience: Anytime we breathe even a word about income in this article, we're only tallying data from agents with 1 or 2 years experience? Why did we leave out those with 0-1 year experience? Any data from agents with <1 year experience would be incomplete. With agents starting at various points in the year, you wouldn't get a complete picture. Not to mention selling travel is a unique business, and it's unlikely for agents to earn much income in their first year. Why? Commissions from travel (which represent the lions share of travel agent income) don't land in a bank account until travel is complete. That can be a long time. Since it takes time to generate a clientele and start booking travel, and even more time for income to generate since agents tend to book trips 8+ months out, we decided to cut some slack to agents with 0-1 year experience.
3. We round to the nearest percent: 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.)
- Another important note is that we only collected income data from agents with 1-2 years of experience, since it typically takes at least a year for commissions to land in an agent's bank account. (Read more about this above where we talk about our survey methods). ↩
- The middle value in a range of values rather than an average of all values, which is a more accurate reflection of the “majority” of agents invested. ↩