VOLUME III – December 2022
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Major Factors Affecting Employee Turnover in the Tourism Industry: With Special Reference to Travel Agencies and Tour Operators of Pune City


 Tourism is a labor-intensive industry having a major dominance of service sector. There is a cut throat competition due to the number of traditional tourism products like cultural tourism, leisure tourism, religious tourism etc and the contemporary ones like medical tourism, film tourism, creative tourism etc which are piling up each day.

Tourism is a ‘multiproduct’ industry and the different sectors of tourism offer a wide range of occupations with a diversity of human capital requirements; Hence, we can say that tourism is one of the major categories of service industry that attracts international trade giving employment to a large number of people ranging from the unskilled to the highly skilled. Not to forget the pandemic havoc like COVID-19 in 2020 which has brought the entire tourism industry in the world into major economic crisis and more unwanted circumstances are yet to come. In this situation and the never-ending competitive market, there is and will be demand of human recourses in tourism who can deliver best service quality which is an important antecedent of the customer satisfaction (Tomar &Tomar, 2013). There is an intense need to have specialized skills to not only revert back the business but also brand the products in a unique way. Hence Human Resource Management (HRM) is vital to the tourism field for several reasons including increasing demand for high quality staff and increasing consumer demand for high end services, etc, (Bagri, Babu & Kukreti, 2010).

The planning and management of human resources like training opportunities, budget allotted for training, levels of skills, opportunities for career advancement and overall motivation varies from a large tourism operator to a small one (Gruescu, Nanu & Pirvu, 2008)

Travel agencies and tour operators are an integral part of the tourism industry. They have various departments like leisure, outbound, visa, ticketing, marketing, foreign exchange, accounts which require specialized personnel to handle the job. The small and medium sized enterprises, unfortunately, do not have a dedicated Human Resource department to meet the needs of the organization. The tourism sector, thus, faces major talent problems, due to high staff turnover and leakage of talent to other sectors. This has resulted in demand – supply disparity with respect to manpower in the tourism industry. Thus, the tourism firms, with no option left have to fill the void with untrained employees.

Review of Literature 

Employee Turnover Issues:

Turnover means leaving a job for many reasons. It can be associated with the dissatisfaction of the employees by the managers.

Staff of any organization or enterprise leaves the business and is replaced by another one is called turnover. It is an intentional measurement to plan for leaving the organization by the employees or vice versa could be the plan of an organization to remove the employee from his position and replace him with somebody else (Mbah, Ekechukwu & Obi, 2018).

According to a survey of World Travel & Tourism Council (2015) member companies, average annual staff turnover was 18 percent, ranging from a high 36 percent to a low 3 percent. Job roles in elementary occupations, sales and customer services and those with skilled trades have the highest levels of turnover. Similarly, tourism and hospitality industry which is one of the fastest growing sectors globally also has a high turnover and absenteeism (Watson, 2008) has led to the impact of levels of service, consumer experience and value (Davidson, Timo & Wang, 2010)

If the organization fails to retain an employee it would lead to a costly proposition. Many of the firms have estimated that if a middle manager or an efficient employee is lost, it costs up to almost five times his salary (Giri & Gayatri, 2018)

Turnover has led to economic impact with significant consequences in terms of replacement and training costs, less profitability, loss of productivity and efficiency, and deterioration of service quality (Tracey & Hinkin,2008).

Turnover in tourism is typical in all sectors of tourism and is seen mostly at operational level where very low financial returns and seasonality were the most important causes of employee turnover (Chalkiti & Sigala, 2010). Moreover, one cannot ignore the external environment factors, which can lure their employees away by paying them better or giving them appropriate work conditions (Kim,2012).

Several researchers have cited numerous factors that lead to the turnover which are – delay in promotion, poor career advancement, less opportunities, non-creative reward and compensation systems, poor employee- management relationships, stress, issues related to salary & wages, more opportunities outside industry, dissatisfaction level of employees, long working hours, work-life imbalance, improper employment practices, organizational commitment, loyalty, dissatisfaction and intention to live among multigenerational groups, poor fringe benefits, less job security, etc. (Davidson, Timo &Wang, 2010;  Gupta, 2013; Mintah, Commey & Kuuder, 2015; Garg & Sangaran, 2012; Maier, 2011).

Another study (Musa, Ahmed & Bala, 2014) revealed that payment of leave benefits also impacts significantly on labor turnover.

According to Walsh and Taylor (2007), turnover is one of the major challenges faced by the tourism and hospitality firms as it causes a considerable loss in productivity due to the exit of experienced employees. Hence, it is very important that employers understand the reasons of why employees leave their current jobs and find measures to retain staff. Thus, to improve the performance of the HR personnel there is a need to conduct capacity building programs for HR relating to enhancement of satisfaction level of employees (Choi & Dickson, 2009).

Cetinel, Yolal and Emeksiz (2008) argue that turnover is caused by lack of human factors such as poor selection and supervision, especially in the small and medium sized travel agencies which hire non tourism qualified personnel. Studies have shown that the final decision for selecting an employee was with the owner or manager of the firm which made right selection difficult at times in the absence of professional HR manager. The HR functions at smaller firms were performed mostly by the Executive Director whereas in large companies by the HR managers (Bagri, Babu &Kukreti, 2010).

The other reasons are incorrect information about the job and working conditions. Various researchers opines that a successful strategy for the management to tackle turnover would be to give a realistic job description to the job seekers and accordingly hiring appropriate qualified staff in the selection process and giving importance to raising the living standard of the employee (Phillips & Connell, 2003;Self&Dewald, 2011; Jose, 2015).

A study by Pang, Kucukusta & Chan (2014) investigated the turnover intension of employees in travel agencies at Hong Kong with the help of controllable and uncontrollable turnover factors in which controllable factors were satisfaction of employees, opportunity for promotion, security of the job and various opportunities for training; while job hopping was an uncontrollable factor. Here, the researchers suggested that it is essential for the managers to show the employees a carrier path with appropriate training.

Mbah, Ekechukwu and Obi (2018) suggest that socialization will enhance the organizational commitment of the employees which will lead to the cost of losing an efficient employee and elaborate on how socialization programs must be designed and developed by the organizations to understand the expectations and satisfaction level of the employees. These programs will help in motivating them for an improved and efficient performance. Moreover, the organizational learning culture and job satisfaction leads to reducing the turnover problem on a large scale.
The World Travel & Tourism Council (2015) showed that there was a lack of research on travel and tourism talent issues. Most of the research is done on HR relating to hotel industry with miniscule literature on the human resources of travel agencies and tour operator companies. Madera, Dawson, Guchaitand Belarmino (2017) have outlined the gap in the literature where they argue that there is a need to examine human resources on the basis of financial performance and a conceptual model linking organizational-level strategic human resource management and firm performance. 

Tourism Business issues in India

According to Jain (2020), India is facing a lot of problems in tourism business. Chronologically, since 2001, there was an abolishment of IATA commissions by most of the airlines; 2006 onwards online travel agents (OTA) and other intermediaries predatory pricing, 2016 onwards demonetization; 2017 onwards GST- goods and services tax,2013-2020 fall of rupee against dollar; April 2019 shut down of Jet airways; 2017 onwards economic slowdown; 2019 outrage of Citizenship Amendment Act; January 2020 Corona virus, tax collection at source on outbound travel business from India lead to unemployment and forced business closure. Gupta (2016) brings into notice the challenges for inbound as well as out bound travel companies in India who are not equipped or trained in charging fees and dealing with customers who are extremely price sensitive.

Though India has a large number of traditional as well as niche products which are enough to increase the number of international tourists. Innovations in tourism services and

products in India are aspects which are neglected by the public tourism stakeholder (Sawant, 2019).

India also faces the problems like heavy competitions, the extreme internet revolution, Artificial Intelligence and Augmented Reality deployed in the business, heavy investments in marketing and thinning profits (Aravind,2019).

According to Ragde (2019), in India, the travel industry is unorganized. As there are only 1052 travel agencies and tour operating companies in India, nearly 90% of the travel trade business does not employ the trained manpower and is underpaid which tends for them to hop on to another job after a few months which pays them slightly higher wage. This trend of employee turnover affects the overall services.

Considering the above problems, it is obvious that the turnover rate of the employees working in the travel agent and tour operator companies in India is growing.

This research study thus focuses on the turnover issues of travel agents and tour operators of Pune city which is a major commercial city of Maharashtra in India after Mumbai. The city has witnessed a tremendous growth in the leisure and business tourist segment because of the rising disposable income and rise in the sectors of Information technology, BPO’s, Retail and Service. Biwal and Roday (2013) focused on the retention issues at large, medium and small size travel agencies at Pune in which they focused on the problems faced by the employers in hiring right employees, as they did not have any practical knowledge or hands on experience. The small sized travel agencies at Pune had a lot of difficulty in hiring human resources as the candidates prefer working for branded organizations. After doing extensive literature review it was found that very miniscule literature was found on the factors affecting turnover rate at travel agencies at

Pune. This research study will help in identifying the reasons of employees shifting jobs and finding remedial measures to curb the turnover and retain performing employees. 

Research Methodology

The aim of this paper is to identify the major factors affecting the employee turnover rate in travel agencies/tour operators of Pune city. For this the research question was Which are the major factors affecting the employee turnover rate in travel agencies/tour operators of Pune city?”. Primary data of 417 employees was selected randomly using structured questionnaires from the approved travel agencies by Ministry of Tourism (MOT), International Air Transport Association (IATA) and Travel Agents Association of India (TAAI). In order to establish the strength of the factor analysis the researcher tested its reliability and validity by using KMO and Bartlett’s test. Using SPSS, a factor analysis was carried out. For the factor analysis technique, initially communalities were found with their extraction values. Principal component analysis technique was used for extraction and rotated component matrix was used for reduction of variables. 

Data Analysis of Employees

Table no.1: KMO and Bartlett’s Test of Sphericity

KMO and Bartlett’s Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .864
Bartlett’s Test of Sphericity Approx. Chi-Square 6.454E3
Df 300
Sig. .000

Source: Author Compilation

The above table no. 1 describes the KMO measure for sampling adequacy that was analyzed to be 0.864 which is greater than 0.5 and the Bartlett Sphericity Test (χ2) was obtained to be 0.000 (p<.05) this indicates that the data is significant and appropriate for further analysis.

Table No.2: Total Variance Explained

Component Initial Eigen Values Extraction Sums of Squared Loadings
Total % Of Variance Cumulative % Total % Of Variance Cumulative %
1 8.920 35.680 35.680 8.920 35.680 35.680
2 2.940 11.761 47.441 2.940 11.761 47.441
3 1.570 6.280 53.721 1.570 6.280 53.721
4 1.248 4.990 58.711 1.248 4.990 58.711
5 1.200 4.800 63.512 1.200 4.800 63.512
6 .994 3.974 67.486
7 .887 3.549 71.035
8 .814 3.254 74.289
9 .746 2.985 77.274
10 .709 2.838 80.111
11 .619 2.477 82.589
12 .556 2.226 84.814
13 .526 2.106 86.920
14 .471 1.884 88.804
15 .460 1.839 90.643
16 .388 1.552 92.195
17 .384 1.535 93.731
18 .303 1.212 94.943
19 .286 1.145 96.088
20 .263 1.050 97.138
21 .224 .896 98.034
22 .186 .743 98.777
23 .125 .501 99.278
24 .105 .420 99.698
25 .075 .302 100.000

Extraction method: Principal component analysis.

Source: Author Compilation

The above table no.2 shows all the factors extractable from the analysis along with their Eigen values. It’s recommended that factors with Eigen values greater than 1.0 should be retained. The table also shows that the percent of variance attributable to each factor and the cumulative variance of the factor and previous factors. Here, five factors have been extracted which accounts for 63.512% of the variance. All the remaining factors are not significant.

Table no.3: Rotated Component Matrix

Rotated Component Matrixa
1 2 3 4 5
Pay does not meet financial needs of employees .105 .108 .763 -.069 -.003
Level of fringe benefits not satisfactory .077 .065 .842 .055 .005
Not giving adequate maternity / paternity leave .001 -.019 .689 -.079 .203
Opportunity to get promoted to a management position is limited .136 .295 .536 -.369 .125
Unclear career path .119 .501 .367 -.243 .103
Working in this organization is stressful .143 .648 .182 .025 .231
Do not feel appreciated at the work place .561 .574 .093 .166 -.093
Job does not command high status in the society .322 .549 .034 .321 -.062
Family life is greatly affected by unusual working hours .230 .640 -.006 -.079 .239
Spend too much time travelling to work .406 .600 -.005 .216 -.041
New employees do not receive adequate induction and orientation training .542 .385 .185 .316 .112
Training opportunities are not adequate in this organization .573 .214 .262 .237 .112
No opportunities to utilise abilities to the full in the job .734 .262 .196 .199 .059
No authority to take independent decisions .853 .140 .075 .068 -.056
Not allowed to participate in decision making process .843 .160 .098 .057 -.019
Do not feel loyal towards the organization .211 .168 .164 -.007 .887
Do not feel emotionally attached to this organization .245 .129 .129 -.010 .891
Managers delegate work / task in this organization .777 .109 .011 .038 .108
The relationship between staff and employers is not open .758 .135 .003 .149 .313
Managers do not put effort into ensuring that staff is satisfied .795 .202 .010 .110 .260
Lack of inter departmental coordination and team work .746 .203 .034 .183 .204
Lack of team work / spirit in this organization .704 .256 -.024 .224 .199
If I get another job offer that would give me the same pay I will leave this Organisation immediately .134 -.016 -.070 .761 .051
I have plans to start my own travel agency .188 .156 -.098 .622 -.038
I have ambitions in another career / industry .300 .016 -.059 .728 -.005
. Extraction Method: Principal Component Analysis
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 6 iterations.

Source: Author’s Compilation

Table no. 3 indicates the rotated component matrix the items and factor loadings for the rotated factors. The 5 extracted factors can be interpreted in terms of the variables that load high coefficients. These 5 factors are given below with their components which are found from the rotated component matrix table.

Factor 1 can be labeled as Training and team work as it has a high coefficient for no authority to take independent decisions(.853); not allowed to participate in decision making process (.843);managers do not put effort into ensuring that staff is satisfied (.795);managers delegate work / task in this organization (.777);no opportunities to utilize abilities to the full in the job (.734);lack of team work / spirit in this organization (.704);the relationship between staff and employers is not open (.758);lack of inter departmental coordination and team work (.746);training opportunities are not adequate in this organization (.573) and new employees do not receive adequate induction and orientation training(.542).

Factor 2 can be labeled as Demoralization because high coefficient for working in this organization is stress (.648); unclear career path (.501);do not feel appreciated at the work place (.574);job does not command high status in the society(.549); and family life is greatly affected by unusual working hours (.640); spend too much time travelling to work(.600).

Factor 3 can be tagged as Monetary issues and promotion limited opportunities for future growth since it has high coefficient for level of fringe benefits not satisfactory (.842); pay does not meet financial needs of employees (.763); not giving adequate maternity / paternity leave (.689) and opportunity to get promoted to a management position is limited (.536).

Factor 4 can be identified as Job hopping as it has high coefficient for the possibility of getting another job offer that would give me the same pay I will leave this organization immediately (.761); I have ambitions in another career / industry (.728) and I have plans to start my own travel agency (.622).

Factor 5 can be recognized as Lack of loyalty and emotional attachment as it has high coefficient for do not feel emotionally attached to this organization (.891) and do not feel loyal towards the organization (.887). 


Based on the findings of the study, researchers have suggested the following measures to reduce the employee turnover in the travel agencies and tour operations firms at Pune.

Teamwork and training:

Employees should be a part of the decision-making process. This practice makes them feel more involved and assures them that their thoughts are heard and considered appropriately. This, in turn, builds confidence in them as a stronger bond with the company is created in their minds. Management should work towards creating a better work environment that promotes team work which will help in achieving the desired output while satisfying employees. The same routine gets tedious. Work can be monotonous and boring for the employees which makes them search for exciting new avenues elsewhere. The management can work towards allocating assignments that are more in alignment with the work profiles of employees individually. This would help the employees with better opportunities to work on challenging assignments that they are interested in, thus building better work satisfaction for them. Roles and responsibilities of employees should be given out in detail as employees will be aware of what is expected of them every day, every month, every year.

Employees should be given effective orientation along with timely training and recurring training about customer service skills, team work, and the ability to make people happy through service excellence. This, in turn, will enhance the confidence and performance of the employees. HR managers should also offer self-development training programs for their employees instead of focusing solely on job-related training programs. This will help in increasing the employee’s loyalty towards their organization and reduce staff turnover.


Management must offer a flexible work schedule along with a calmer work environment that pays attention to mindfulness and mental wellbeing of the employees and shows recognition and appreciation to them in a timely fashion. This practice helps in reducing employee stress.  The management also needs to pay closer attention to assure a clear career path for their employees. With an unclear career path, the employees tend to move to other firms and industries. The management should improve the career paths for its desirable employees at all levels including managerial and operational staff (entry level and mid-level). Vacancies can be filled by promoting in-house staff. Implement flexible work schedules for a greater work/life balance proposition will lead to strongly motivated employees.

Monetary issues and Promotion:

As opportunity to get promoted to a management position is limited in travel agencies/tour operators, the management should work towards developing attractive retention strategies to retain the talented human resource by offering them a good job title, salary increment and additional perks. Pay reflects an employee’s position and standard of living and hence is directly or indirectly connected with employee turnover. Travel agencies/tour operators should give them a salary at par with their competitive firms and the right salary package for outstanding talents so as to avoid losing them. Fringe benefits like casual leave, sick leave, earned leave, maternity leave for female employees as per the government acts must be provided for the employees along with the pension to assure a sense of security.

Job Hopping:

After hiring the employee, the organization must work on maximizing their potential to minimize the employees’ carving of a new job. Monetary, non-monetary motivation and communication with them should be prioritized. Regular feedback along with listening to their concerns and ideas will help in reducing chances of job hopping.

Lack of loyalty and emotional attachment:

Respect for the organization, subordinates, management and good in-house communication should be promoted by the employers for high levels of loyalty towards the organization. Employees should be appreciated and involved in decision making so that they are empowered and feel more confident. This will create a feeling of stronger commitment among employees resulting in loyalty towards the organization. Implement flexible work schedules for a greater work/life balance for all employees. Flexible working hours are highly motivational. For e.g., work from home if needed. Employees who showcase a right attitude, sense of pride in doing their job and a passion for excellent customer service should be selected for the jobs.


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Cite this article

Sawant M., Kamlesh Biwal A., Ragde R. (2021) Major Factors Affecting Employee Turnover in the Tourism Industry: With Special Reference to Travel Agencies and Tour Operators of Pune City. EATSJ - Euro-Asia Tourism Studies Journal, Vol.2, ( November 2021 ). https://doi.org/10.58345/QKYM8323.

Received: | Accepted: | Published online: 28 November 2021
Volume: 2 | Issue: November 2021 |

DOI: https://doi.org/10.58345/QKYM8323

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Madhuri Sawant (Corresponding author)
Department of Tourism Administration Dr Babasaheb Ambedkar Marathwada University, India


Archana Kamlesh Biwal
Maharashtra State Institute of Hotel Management & Catering Technology, Pune, India


Rajesh Ragde
Department of Tourism Administration Dr Babasaheb Ambedkar Marathwada University, India

Major Factors Affecting Employee Turnover in the Tourism Industry: With Special Reference to Travel Agencies and Tour Operators of Pune City by Madhuri Sawant, Archana Kamlesh Biwal, Rajesh Ragde is licensed under Attribution-NonCommercial-NoDerivatives 4.0 International