People in travel are a significant source of employment, yet the industry has not yet reached pre-pandemic levels of employment.
According to the World Travel and Tourism Council, travel and tourism prior to the pandemic accounted for 1 in 4 of all new jobs created across the world, and 10% of all jobs (334 m)1.
In 2023, global employment in the sector is forecast to grow to 320m. While this reflects an 8.5% increase versus 2022 it is still 4.2% below the 2019 pre-pandemic level2.
Travel is a people business and relies on an exceptionally skilled workforce in order to provide high-quality services and experiences to travellers Yet, it continues to face labour shortages.
Why are there still staff shortages in the travel industry?
There are 3 core reasons:
- The legacy of the COVID-19 pandemic. The pandemic caused a significant disruption to the industry, leading to mass layoffs and furloughs. Many workers left the industry altogether, and many others are now hesitant to return due to concerns about job security.
- A reduction in the wider available supply of labour in developed economies due to:
- An ageing population. The developed economies in aggregate have seen a decline in the 20–64 age population since 20143.
- Adverse international migration flows. Migration flows in many developed economies have reduced the supply of labour. In the US, the slowdown in immigration and rise in emigration since 2016 have resulted in net international migration dropping from around 1.05 million in 2016 to nearly 477,000 by 20204. In the UK, labour availability has also been compounded by the stricter immigration laws imposed by the government as a result of Brexit in 2020.
- Higher levels of economic inactivity. Higher economic inactivity in the UK has been driven by a surge in early retirements and long-term illness since the onset of the pandemic. By 2022, over two-fifths of 55-66 year olds had taken early retirements5 and the number of economically inactive people with a long-term illness in 2023 is at its highest recorded level since records began in 19936.
- Competition from other sectors. The travel industry is facing competition from other industries which are offering higher wages and better benefits. Additionally, the travel sector in some areas has more stringent and costly training and certification requirements, making it difficult to attract talent. For example, pilot training in the UK costs £70-130k8 and prospective commercial pilots typically log at least 250 hours of flying time to earn their licence, including 50 hours of cross-country flying and 100 hours of pilot-in-command time.
What are the impacts of staff shortages?
These are significant. For example, many airlines are still not operating at pre-pandemic seat capacity levels. Additionally, customers are experiencing longer wait times and more frequent service disruptions. The staff shortages are also putting a strain on the mental and physical health of workers. To address these, the travel industry is beginning to take effective action including:
- Active lobbying of governments to facilitate talent mobility within countries and across international borders.
- Embracing flexible and remote work, thereby widening its appeal to job candidates.
- Improved employee pay and benefits and training/certification support.
- Enhanced provision of training and development opportunities.
- Investment in digital solutions to alleviate pressure on existing staff while improving the user experience.
By addressing staff shortages, the travel industry can improve its competitiveness and long term vitality. Despite all the automation and digital innovation since the pandemic, there is still a strong need for human engagement. It is not simply about booking the transaction, there is a need amidst all the technological advancement for emotional connection and for personal support especially when the travel environment has become more complex and also more prone to disruption.
What is Key Travel doing to attract and retain staff?
Key Travel is an international travel management company that is exclusively dedicated to reducing the cost, complexity, risk, and carbon-impact of travel for non-profit organisations so that they can direct more of their resources on delivering their missions. After significant downsizing due to the pandemic, we rebounded post-pandemic and have more than doubled our colleague numbers worldwide by the end of 2022. To help us attract and retain staff, we have driven a number of initiatives:
- We reinstated pay reviews and enhanced benefits.
- We adopted a remote and hybrid office attendance model with most colleagues working 3 days at home with 2 days in the office.
- We put into place personal development plans for every employee which are reviewed twice yearly.
- We are investing in staff training both internally and where appropriate with outside help.
- We established a strong staff engagement programme involving regular, open communication.
- We established a 3 year technology investment programme to automate manual repetitive tasks and encourage customers to self-service online for simple bookings, reserving the more complex queries for our team of expert agents.
- We have representation on the Board of the Business Travel Association (BTA), the UK’s trade association for managed travel providers, and work with industry peers to lobby the government on more flexible labour mobility policies.
The good news is that we are filling vacancies effectively and our staff turnover is half the industry average. This has helped us create a workforce with an average of 8 years of tenure which is highly motivated. We run Annual Listening Surveys. In our latest survey, our colleague engagement score was 75% versus a global average benchmark7 for engagement of 41% for all industry sectors (across 160 countries involving 80m responses).
The importance of people in travel conclusion
The travel industry is a significant employer. While its employment levels are recovering from the pandemic, they still lag 2019 levels and the industry continues to grapple with staff shortages. The industry is taking action to address the root causes. Key Travel, the world’s leading travel management company focused on non-profit organisations, has driven multiple initiatives to attract and retain staff with encouraging results. While much of travel needs to focus on the travellers and guests, the people employed in the industry are just as important, as it is they who define the experience a traveller can have, As Richard Branson says “If you look after your staff, they’ll look after your customers. It’s that simple”.
2 https://www.statista.com/statistics/1268465/number-of-travel-and-tourism-jobs-worldwide/
3 https://publications.parliament.uk/pa/ld5803/ldselect/ldeconaf/115/115.pdf p33
4 https://wttc.org/Portals/0/Documents/Reports/2022/WTTC-Staff%20Shortages-August22.pdf
6 https://researchbriefings.files.parliament.uk/documents/CBP-9366/CBP-9366.pdf